As the U.S.-Israeli conflict with Iran continues, global energy markets are feeling the strain. The effective closing of the Strait of Hormuz, which is the chokepoint for roughly 20% of the world’s petroleum and liquefied natural gas (LNG) trade, combined with attacks on energy infrastructure have driven sharp spikes in commodity prices. As just one example, the European benchmark for LNG is up over 50% since the conflict began. Policymakers and investors are once again confronting the fragility of fossil-fuel-dependent power systems in an unstable geopolitical landscape.
Far from a setback, this situation actually shines a bright light on nuclear energy as one of the most resilient and strategically advantageous power sources available. The conflict underscores why nations and utilities are likely to accelerate nuclear construction in the years ahead. It’s not simply for clean, reliable baseload power but for genuine energy security that fossil fuels cannot match.
Fossil Fuels’ Vulnerability Exposed
Natural gas-fired generation is inherently tied to volatile commodity markets. When prices swing as wildly as they are right now amid the Iran conflict, those fluctuations flow straight through to electricity rates. Fuel can represent 50–75% of the total cost of producing power at a combined-cycle natural gas plant. A sustained jump in natural gas prices can dramatically elevate wholesale electricity costs, squeezing consumers, businesses, and entire economies.
This is not theoretical. Markets have already reacted to Hormuz risks and supply disruptions, with analysts warning of further upside pressure on energy prices. For countries relying heavily on imported LNG for power, the Iran conflict is a painful reminder of external risks that can disrupt budgets and grid stability overnight.
Nuclear’s Commodity Insulation
Nuclear energy operates on an entirely different economic foundation. Uranium fuel accounts for only about 5–10% of the total cost of nuclear-generated electricity. Capital costs are higher upfront, but once a plant is operating, the fuel cost component is remarkably small.
Even if uranium prices were to double or triple, the impact on the delivered cost of nuclear power would be minimal. Industry analyses show that a 100% increase in uranium prices typically raises nuclear electricity costs by just 5–7% (often less than one cent per kilowatt-hour). Long-term supply contracts, strategic stockpiles, and the sheer energy density of uranium (a single pellet produces as much energy as a ton of coal) provide powerful buffers.
Contributing to the minimal effect fuel prices have on nuclear energy generation is the long refuel cycles. Nuclear reactors operate continuously for 18 to 24 months at a time without having to shut down to “refill” their uranium fuel supply. This provides significant insulation from temporary volatility in commodity prices. Research and development is currently underway between utilities and nuclear fuel fabricators to produce fuel that extends the cycle beyond 24 months.
Compare that to natural gas plants, where fuel-price volatility can swing generation costs by 50% or more in short order. Nuclear’s price predictability is a powerful advantage in today’s uncertain world, delivering steady, low-cost power regardless of what happens in distant oil fields or shipping lanes.
Why This Incentivizes New Nuclear Construction
The Iran conflict is actively strengthening the case for new nuclear builds. Energy-importing nations and regions already investing in data centers, AI infrastructure, and industrial growth are recognizing that true energy independence requires sources insulated from Middle East geopolitics.
Internationally, countries are accelerating plans for small modular reactors (SMRs) and large-scale plants precisely because they offer decades of reliable output without exposure to the commodity shocks now rippling through global markets. Dozens of countries across the world pledged in 2023 to triple nuclear energy generation capacity by 2050. Multiple countries and major companies have joined the pledge over time, including just last week with the addition of China, Italy, Brazil, and Belgium.
President of the European Commission, Ursula von der Leyen, made recent comments at the Nuclear Energy Summit in Paris that Europe’s retreat from nuclear energy was a “strategic mistake.” The president also announced that the EU will offer €200 million guarantees to support private investment in nuclear technologies.
Even the U.S., with abundant natural gas supplies and an insulated domestic market, is focused on greater nuclear deployment. Federal support for advanced reactors, streamlined licensing, and fuel-cycle innovation continues to build bipartisan momentum in the U.S.
A Clear Bull Case for the Nuclear Renaissance
In an era of heightened geopolitical risk, nuclear stands out as the power source that keeps electricity prices stable, grids secure, and economies resilient.
Countries will be looking to reactor developers, big and small, for adding new nuclear capacity within their borders. This will come with contracting opportunities across the nuclear fuel chain, reactor construction industry, and manufacturing companies. Multiple publicly-traded companies are involved in these different nuclear segments and are constituents of the VettaFi Nuclear Renaissance Index (NUKZX):
NUKZX is the underlying index for the Range Nuclear Renaissance Index ETF (NUKZ).
For more on nuclear’s comeback, please join our 30-minute webcast on March 19 at 12:30 p.m. ET. Register here.
Related Research
Doors Swing Open for Advanced Nuclear in the U.K.
The Geopolitical Bull Case for Nuclear
Not All Nuclear Exposure Is Created Equally
Energy and Midstream Implications from Attacks on Iran
Why Energy Security Still Matters Today
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