The Geopolitics of the U.S.–Saudi Nuclear Deal

In late July, the Trump administration announced a landmark civil nuclear cooperation agreement with Saudi Arabia. Signed in accordance with Section 123 of the Atomic Energy Act of 1954, the agreement will now be submitted to Congress for review. Although the deal has not yet been released publicly, it could have significant economic and strategic implications for both Riyadh and Washington.

The agreement comes amid the continued development of civilian nuclear power programs across the Middle East. Iran’s Bushehr nuclear power plant and the UAE’s Barakah nuclear energy plant are currently the only active nuclear reactors in the Middle East, having come online in 2011 and 2020, respectively. Turkey’s Akkuyu nuclear power plant is scheduled to connect to the grid and start generating electricity at the end of 2026, while Egypt’s El Dabaa is expected to follow in 2028. If approved, the U.S.–Saudi nuclear deal would mark a significant step toward the expansion of civilian nuclear energy across the Gulf.

The Case for Nuclear Power

Saudi Arabia and the other Gulf Cooperation Council (GCC) states have several overlapping reasons to develop civilian nuclear power. First, electricity demand is rising due to population growth, economic development, and expanding water desalination needs. Nuclear power has the potential to meet some of this growing demand.

Reducing reliance on fossil fuels could also help address the environmental pressures facing the Gulf. Burning oil and gas is a major source of greenhouse gas emissions,  and the GCC states have already experienced severe effects of climate change, including extreme heat, flooding, and drought. Expanding nuclear and renewable energy could reduce carbon dioxide emissions while simultaneously helping the region diversify its energy mix.

Nuclear energy could also strengthen long-term energy security. Unlike fossil fuels, which are finite resources, nuclear power offers a durable source of energy. Saudi Arabia is believed to possess substantial uranium deposits, and Energy Minister Prince Abdulaziz has vowed to develop these reserves “in the most transparent way to support domestic nuclear industry and to export to global markets.”

The economic rationale is equally important. Despite serious efforts to diversify their economies, oil and gas revenues remain a major source of foreign earnings and government revenues for the GCC states. By diversifying their energy mix and reducing domestic consumption of oil and gas, Gulf states will be able to export more crude and petroleum products, helping to meet global demand and stabilize energy markets while simultaneously generating additional revenue to finance their ambitious social and economic development programs.

These considerations have driven Saudi Arabia and other Gulf states to develop indigenous civil nuclear power for more than two decades. In late 2006, the GCC states commissioned a study on the peaceful use of nuclear power and started working with the International Atomic Energy Agency on a feasibility study for a regional nuclear power and desalination program. In the years that followed, Riyadh worked with Russian, Chinese, Japanese, South Korean, and other governments and companies to further develop its plan for nuclear power. The U.S.–Saudi nuclear arrangement represents the latest development in this broader effort to develop nuclear programs in the Gulf.

The Stakes of Nuclear Cooperation

The nuclear agreement offers significant economic and strategic benefits to both Saudi Arabia and the United States. Access to advanced American nuclear technology would help Riyadh establish and develop a strong civilian nuclear industry. The agreement would also generate thousands of jobs in both countries and create new investment opportunities for American companies. More broadly, the agreement would deepen the partnership between the United States and Saudi Arabia.

For Saudi Arabia, the agreement would advance a nuclear ambition that Riyadh has pursued for more than a decade, while supporting the kingdom’s broader Vision 2030 diversification agenda. The addition of reliable nuclear power will help meet growing electricity demand as Saudi Arabia expands data centers, advanced manufacturing, and other energy-intensive industries while investing heavily in artificial intelligence. At the same time, it could strengthen the kingdom’s technical capabilities and create opportunities for new industries.

For Washington, the agreement will allow American companies to secure contracts to design, build, and service reactors in Saudi Arabia, creating long-term commercial opportunities at a time when U.S. President Donald Trump has sought to strengthen the country’s nuclear energy industry. A major project in Saudi Arabia could also strengthen the U.S. nuclear industry’s ability to compete with Chinese and Russian suppliers in international markets.

The Proliferation Debate

The Trump administration has presented the nuclear arrangement with Saudi Arabia as a strictly commercial partnership that would advance the economic and strategic interests of both countries while maintaining U.S. nonproliferation standards. U.S. Secretary of Energy Chris Wright said the agreements “reflect our two nations’ shared commitment to strengthening U.S.–Saudi commercial relations, delivering prosperity at home and security to our allies.” Wright also emphasized that the agreements uphold the highest standards of nuclear safety and nonproliferation.

Despite these assurances, experts have raised concerns that the agreement could encourage nuclear proliferation in the Middle East and beyond. Republican Senator John Kennedy pointed out that the deal could create a double standard in U.S. policy: “We are bombing a country to keep them from getting a nuclear weapon, but we are signing a deal with another country.” The Council on Foreign Relations similarly warned that the deal could “deepen the cracks in the foundation of the U.S.-led global nuclear order.”

These concerns, however, do not necessarily mean that Saudi Arabia would use the agreement to develop nuclear weapons. On the contrary, Saudi Arabia and the other GCC states have never taken steps toward acquiring nuclear weapons.

U.S. involvement also gives Washington the opportunity to closely monitor the development of Saudi Arabia’s nuclear program. This situation is advantageous for Washington when the alternative is for Riyadh to develop its nuclear program in cooperation with U.S. adversaries such as China or Russia. While American nuclear technology is among the best in the world, Saudi Arabia has other capable international suppliers to choose from.

An Unrealistic Concession

One day after the agreement was signed, Trump wrote on Truth Social that the deal does not allow uranium enrichment and that it is conditioned on Saudi Arabia normalizing relations with Israel. Trump’s surprise announcement is likely an attempt to soften the criticism of the deal by members of Congress and his own Republican Party.

This public arms twisting will not work. Since October 2023, the entire Middle East has experienced one of the most uncertain times in modern history due to the Israeli wars in Gaza and Lebanon and the ongoing war with Iran. The GCC states have been prioritizing de-escalation and mediation. Saudi Arabia, in particular, has strengthened coordination with Egypt, Turkey, and Pakistan to help restore the regional balance of power.

Given the kingdom’s Islamic credentials and economic power, Saudi leaders do not take the issue of normalization lightly. Such a development would have significant strategic ramifications for the Middle East and the wider Islamic world. Additionally, Saudi leaders have long maintained that normalization with Israel requires concrete and irreversible steps toward implementing a two-state solution. Trump, however, has not elaborated on how the new condition applies to the agreement that has already been signed. With normalization remaining a Saudi red line, the new condition leaves the future of the nuclear agreement uncertain and places a significant development for U.S.–Saudi relations in limbo.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.