The mayor of Almaty’s office seen ablaze in Almaty, Kazakhstan, on January 5, 2022.
Valery SharifulinTASS via Getty Images
- Kazakhstan’s government resigned after a week of social unrest, but turmoil in the country has intensified.
- Uranium and crude oil prices have spiked in the wake of the country’s political upheaval.
- Oil-rich Kazakhstan produces 40% of the world’s uranium supply.
Prices of uranium and crude oil have spiked as social unrest in Kazakhstan has created fears about reduced production and supply chain disruptions.
The central Asian country is the world’s largest supplier of uranium, accounting for about 40% of global output. Prices of the nuclear fuel jumped about 8% on Wednesday, according to commodity pricing agency S&P Platts.
Kazakhstan’s government resigned on Wednesday after nearly a week of social unrest after a fuel market reform led to a price surge for liquefied petroleum gas. But the unrest has continued to intensify, with fresh gunfire heard in Almaty, Kazakhstan’s largest city, on Friday, the BBC reported. Kazakhstan’s interior ministry said 26 “armed criminals” and 18 security officers have been killed in the turmoil, the news outlet added. Another 3,000 people have been arrested.
Kazatomprom, the world’s largest uranium miner, told Reuters there have been no stoppages and that it’s still fulfilling deliveries to customers.
But uranium market participants are monitoring the situation closely, Sprott CEO John Ciampaglia told Platts on Wednesday. The Toronto-based hedge fund is the investment manager to the Sprott Physical Uranium Trust Fund and a big buyer of the nuclear fuel.
“It seems to us that the social unrest is happening in the cities and the uranium deposits are obviously far away from those cities. But everything has to move around by truck and boat, and if those supply routes got impacted it could create delays,” Ciampaglia told Platts.
The turmoil in Kazakhstan has also pushed up crude oil prices, with Brent futures up about 6% this week.
Production at Tengiz, Kazakhstan’s top field, was reduced on Thursday due to disrupted train lines, Reuters reported, citing oil giant Chevron. The joint venture produces around 700,000 barrels of oil a day, and it wasn’t clear how much output has been hit, Reuters added.
The country is a major oil producer with an output of 1.6 million barrels of oil a day, according to Reuters. That’s just shy of 2% of the world’s oil demand at about 97 million barrels a day, according to the International Energy Agency.