US-Saudi Nuclear Deal Faces Collapse Over Uranium Enrichment Conditions

In the last week of July, the United States and Saudi Arabia signed what was meant to be a landmark nuclear cooperation agreement. Within days, the deal had collapsed into contradiction. Reports suggested the accord would permit Saudi Arabia to enrich uranium on its own soil—a capability the kingdom has pursued for years. Then President Trump posted on social media: there would be no enrichment. The question of what was actually signed, and why it matters, now threatens to unravel the entire arrangement.

The legal instrument at stake is called a 123 Agreement, named after a section of the 1954 Atomic Energy Act. After World War II, the United States had reneged on nuclear commitments to Britain and Canada, so Congress built this framework to govern how America shares civilian nuclear technology with other nations. The irony is sharp: Iran, now America's regional adversary, was one of the first countries to benefit from this arrangement, signing its own 123 Agreement in 1957. In 1974, Iran's Shah invested roughly $1.18 billion in Eurodif, a European uranium enrichment consortium, convinced that his nation's oil reserves were finite and that nuclear power represented both economic necessity and national prestige. He ordered reactors from Germany and France. Only one was completed—at Bushehr, eventually built by Russia's Rosatom after nearly four decades and sustained American opposition. Today it generates barely one percent of Iran's electricity and has been targeted repeatedly in the latest regional conflict. After the 1979 revolution, Iran's enrichment dreams were frozen. The country was eventually compensated for its Eurodif investment, but the episode left a scar. Iran now refuses to enrich uranium abroad, viewing that history as proof that it cannot trust foreign partners. To many Western observers, Iran's push to enrich far beyond civilian power needs looks like a march toward nuclear weapons capability.

Saudi Arabia has watched this history closely. The kingdom has harbored nuclear ambitions since the 1960s. In 2010, it established the King Abdullah City for Atomic and Renewable Energy and planned to generate about 17 gigawatts of nuclear capacity by 2032. At that time, solar and wind were expensive and small-scale. Saudi Arabia was burning more and more of its own oil for electricity and water, a wasteful use of a precious export commodity. Nuclear power seemed essential. But unlike the United Arab Emirates, which accepted strict limits on enrichment in its 123 Agreement signed in 2009, Saudi Arabia wanted something different. In 2023, the kingdom's Energy Minister Prince Abdulaziz bin Salman declared that the nation intended to develop the complete nuclear fuel cycle—including uranium enrichment and fuel manufacturing, both for domestic use and export. The country has substantial uranium deposits, though their commercial viability remains uncertain. This ambition has repeatedly reshaped Saudi Arabia's reactor plans, changing their size and location multiple times. Meanwhile, the kingdom's solar and wind sectors have exploded in capacity and plummeted in cost, easing the perceived urgency of nuclear expansion.

Saudi Arabia has five potential nuclear partners: the United States, South Korea, France, China, and Russia. Only with America does it need a 123 Agreement. South Korea would be ideal—politically palatable and proven in the UAE, where it built the Barakah plant using a design that incorporates American technology. But that American entanglement means Saudi Arabia would still need a 123 Agreement to proceed. France's nuclear industry has withered; recent projects have run years behind schedule and billions over budget. Russia is constructing reactors in Egypt and Turkey, but involvement in Saudi Arabia would be politically toxic while the war in Ukraine continues, and the Gulf has not forgotten Russian support for Iranian drones in regional conflicts. China has an excellent record building reactors at home but has succeeded abroad only in Pakistan. American opposition would be fierce if Beijing led a Saudi nuclear program. The United States, meanwhile, is trying to revive its domestic nuclear sector, particularly small modular reactors. The capital-rich Gulf is an ideal market. The UAE and Bahrain have both expressed interest. But if Washington continues to block a deal with Riyadh, the kingdom could turn elsewhere.

This is why the current confusion is so dangerous. After his initial post denying enrichment, Trump added a new condition: the deal would be approved only if Saudi Arabia joined the Abraham Accords, the normalization agreements between Israel and several Arab states. Saudi Arabia has shown no interest in doing so. Indeed, on the same day Trump made this statement, Riyadh signed a mutual defense agreement with Turkey and Pakistan—a move in the opposite direction. The White House has painted itself into a corner. Allowing Saudi enrichment would face fierce opposition in Washington and Tel Aviv and could be portrayed as abandoning non-proliferation principles. Iran would seize on it as leverage in regional negotiations. Other countries with 123 Agreements might demand the right to renegotiate their own terms. But insisting on no enrichment, or demanding that Saudi Arabia normalize with Israel, would likely kill the deal entirely. That would make the United States look unreliable to future partners and would cede the Saudi market—and potentially others—to China and Russia. The United States is already short on enrichment capacity. Losing this deal could damage American nuclear competitiveness for years. Washington faces a genuine trilemma: it cannot simultaneously satisfy its non-proliferation goals, its geopolitical ambitions, and its economic interests. One of them will have to give.