Monday, July 27, 2026
News and Views from the Global South
U.S.-Saudi Nuclear Agreement Opens Door to Civilian Nuclear Cooperation, with One Major Caveat
A view of Riyadh, the capital of Saudi Arabia. Credit: Unsplash/Ekrem Osmanoglu
- On Wednesday, July 22, the U.S. Secretary of Energy, Chris Wright, and Saudi Arabia’s Minister of Energy, HRH Prince Abdulaziz bin Salman bin Abdulaziz signed a civilian nuclear cooperation agreement, best known as a 123 agreement, as well as an accompanying bilateral safeguards agreement, according to the U.S. Department of Energy and the Saudi Ministry of Energy.
While the agreement was expected to be submitted to Congress for review, President Donald Trump has conditioned U.S. nuclear cooperation on Riyadh, normalizing relations with Israel in order to receive U.S. nuclear technology. A condition that appears difficult to satisfy given the Kingdom’s hardline stance that it will not normalize relations with Israel until a Palestinian state is established with East Jerusalem as its capital, according to Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto leader.
Washington mentions that these two agreements “lay the legal foundation for a decades-long, multi-billion-dollar partnership that advances several priority economic and strategic objectives, including nuclear nonproliferation.” The agreement has a 30-year term.
The 123 agreement, named after Section 123 of the Atomic Energy Act of 1954 – a U.S. federal law – provides the legal framework for long-term civilian nuclear cooperation between the United States and partner countries. The 123 agreement is mandatory before any significant exports of U.S.-origin nuclear material, such as nuclear reactors, nuclear fuel, and other major components can go to any partner.
Saudi Arabia’s nuclear agreement with the U.S. is more than an energy deal. It has the potential to reshape the Kingdom’s relationship with oil, and its geopolitical role in building the Middle East’s next-generation clean-energy infrastructure.
The advent of nuclear energy could also free up the amount of hydrocarbons Saudi Arabia can export. The Kingdom produced 22,744,529.0 TJ of oil and oil products in 2023, having consumed 6.4 million TJ domestically, equivalent to approximately 28 percent of its production. The Kingdom also produced 3,640,348.0 TJ of natural gas, having consumed all of its domestically produced natural gas that year. For reference, 3,600 TJ is equal to 1 TWh.
Expressed in barrels of oil equivalent (boe), Saudi Arabia produced the energy equivalent to 3.72 billion barrels of oil, in oil and oil products in 2023, consuming 1.05 billion barrels of that oil. This indicates that roughly 72 percent of the Kingdom’s oil and oil products, measured in energy terms, are not domestically consumed, leaving a substantial share available for exports and other uses. Saudi Arabia is the world’s second to third largest exporter of oil, producing 11 percent of global demand.
According to the International Energy Agency (IEA), transport accounts for roughly 30 percent of Saudi Arabia’s final energy consumption, followed by non-energy uses (29.7 percent), industry (19.9 percent), and commercial and public services (11 percent).
Although the pace at which Saudi Arabia can transition away from fossil fuels remains uncertain, nuclear power could gradually reduce domestic oil consumption, freeing up oil for export. According to the U.S. Energy Information Administration (EIA), a reactor can take about five or more years to be built after licensing and regulatory approvals are already completed.
Saudi Arabia’s first nuclear plant is expected to consist of two reactors, each producing around 1.4 GW, bringing the plant to a total capacity of 2.8 GW (2,800 MW). Assuming a 90 percent capacity factor, annual energy generation will be 22.1 TWh per year, nearly five percent of Saudi Arabia’s 431.9 TWh electricity generation.
Although Saudi Arabia’s first nuclear plant would account for only about 5 percent of the Kingdom’s current electricity generation, it would represent an important step toward reducing domestic hydrocarbon consumption in support of the country’s national strategy, Vision 2030.
IPS UN Bureau Report
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