By Vivek Mishra and Surya Prakash Noutiyal
Key Takeaways:
- A 123 deal, not the UAE “gold standard.” Signed 22 July 2026, the 30-year U.S.–Saudi civil nuclear pact (Atomic Energy Act §123) can move civilian fuel, tech, and kit—and, the author says, leave enrichment on Saudi soil under U.S. monitoring. Riyadh is in the NPT (1988) and has IAEA comprehensive safeguards (2009) but not the Additional Protocol. The UAE’s 2009 deal barred domestic enrichment.
- Congress and a Trump aside. Energy Department: 90 session days for Congress to object. Trump said a day after signing that it hinged on Abraham Accords/Israel; the text does not. MBS in 2023: if Iran gets a bomb, Saudi Arabia would “have to get one.” Author: enrichment up to 20% is the civilian cap named—and the proliferation worry vs Iran’s JCPOA 3.67% cap (later 60% after the U.S. left).
- Rivals and spillover. A parallel bilateral safeguards deal is meant to beat China and Russia for the build. Author: Turkey, Egypt, the UAE may want the same rights; Saudi–Pakistan and Mecca (Saudi–Pakistan–Türkiye) defense pacts widen the worry. That last stretch is the writer’s brief, not the treaty text.
The United States (US) and Saudi Arabia have reached a landmark nuclear cooperation agreement (123 agreement) on civil nuclear energy that could provide the Kingdom with an enviable opportunity to enrich uranium on its soil, a prospect that has drawn criticism over the risk of regional nuclear proliferation.
The 123 agreement — a term drawn from Section 123 of the US Atomic Energy Act of 1954 — could allow the transfer of civilian nuclear material, technology, and equipment to Saudi Arabia. The move is critical for Riyadh as it undergoes economic diversification, becoming less reliant on the fossil-fuel-based economy and developing a non-fossil-fuel energy mix that includes nuclear energy. In return, the 30-year agreement gives American companies access to Saudi Arabia’s civil nuclear market, allowing them to work with local entities to build a multibillion-dollar industry.
Saudi Arabia acceded to the Non-Proliferation Treaty (NPT) in 1988 and, since 2009, has had a comprehensive safeguards agreement with the International Atomic Energy Agency (IAEA) covering all its nuclear facilities. However, the Kingdom has not signed the Additional Protocol, which gives the IAEA broader access to look for undeclared material and activities. Additionally, Crown Prince Mohammed bin Salman’s rupture with the Biden administration, Saudi Arabia’s tendency to act independently of the US, and its mutual defence pact with Pakistan all give Washington — and the South Asian region — reason to be cautious.
Along with the 123 agreement, Washington and Riyadh also signed a bilateral safeguards agreement that strengthens the US’s competitive edge in exporting civil nuclear technology to the Kingdom vis-à-vis other nuclear technology-trading countries such as China and Russia. This agreement offers the US significant economic and strategic advantages for long-term business opportunities in the Kingdom. The agreement lays the legal foundation for providing the Kingdom with uranium enrichment capability for its civilian nuclear programme, on the condition that the US monitors Saudi Arabia’s enrichment activities. Critics argue that the agreement lacks the “Gold Standard” that Washington has, for two decades, attached as a condition for nuclear cooperation — requiring countries to forgo domestic uranium enrichment and spent fuel reprocessing. The UAE is a prime example of this standard being applied.
The US-Saudi nuclear agreement had remained stalled for years. In July 2017, Saudi Arabia approved a National Project for Atomic Energy to diversify its energy mix and reduce domestic oil and gas consumption, with plans to build large and small nuclear reactors for electricity generation and water desalination. The US already has a civil nuclear agreement with the UAE, in force since 2009, under which the UAE does not enrich uranium domestically and instead relies on imports of enriched uranium for its nuclear energy programme.
Riyadh’s main sticking point was believed to be its insistence on enriching uranium domestically, something Washington had long been reluctant to allow. Successive US administrations worked toward nuclear cooperation with Saudi Arabia, and the Trump administration finally signed the civil nuclear deal on 22 July 2026 — only for President Trump to declare a day later that it was contingent on Saudi Arabia joining the Abraham Accords and normalising relations with Israel, a condition not mentioned when the deal was announced.
The formal text, however, does not make the deal conditional on Saudi-Israeli normalisation, so it could take effect without it. Israel’s own domestic politics — an approaching election and its refusal to withdraw from Gaza — may have forced Trump’s hand on this point. The deal still carries a built-in buffer: according to the US Department of Energy, it now goes to Congress for review and will enter into force unless Congress votes to object within 90 session days, giving Trump time to test Riyadh’s promise.
Eight months after signing a joint declaration in November 2025, the 123 agreement between the US and Saudi Arabia arrives at a moment when Washington is at war with Iran and in urgent need of regional realignment. US allies in the region, Saudi Arabia included, have been struck by hundreds of Iranian missiles and drones, an onslaught that has threatened Saudi sovereignty, disrupted oil exports through the Strait of Hormuz, and reopened the debate about the US’s utility as the Gulf’s security guarantor.
The Crown Prince has long adopted a realistic view about the threat from Iran. In September 2023, Mohammed bin Salman acknowledged that if Iran obtained a nuclear weapon, Saudi Arabia would “have to get one, for security reasons, for balancing power.” The unpredictability of the ongoing war has since sent Riyadh scrambling for firmer security guarantees. Its early assurance that Saudi soil would not be used to strike Iran gave way as Iranian attacks intensified, eventually forcing Saudi Arabia to launch retaliatory strikes on Iran of its own. A purely defensive posture is proving unsustainable through a prolonged conflict, and with the prospect of Iranian nuclearisation now an open bet, Saudi Arabia wants a clearer path forward.
Nuclear Proliferation in the Middle East
The Saudi nuclear agreement would allow the Kingdom to enrich uranium up to 20 percent. Such a level could be needed to power a small modular civilian reactor, but it also raises the risk of nuclear material being diverted for military purposes in the absence of stringent controls. Washington is applying a markedly different enrichment benchmark to Saudi Arabia than the one it once set for Iran. Under the 2015 Iran nuclear deal, Iran’s uranium enrichment was capped at 3.67 percent for 15 years, after which the restriction would lapse. Trump’s withdrawal from the deal during his first term set in motion a chain of events that saw Iran enrich uranium to as much as 60 percent — for context, 90 percent is considered weapons-grade. The biggest concern around Saudi Arabia’s entry into the nuclear fold is that it could intensify a broader nuclear arms race in the Middle East.
As the US-Iran nuclear deal remains in a quagmire and Iran still possesses its stockpile of enriched uranium, Saudi Arabia’s rush to acquire nuclear technology as a deterrent against Iran is unsurprising. Iran has already demonstrated its ability to control the Strait of Hormuz and disrupt other trade routes in the region. For reliable deterrence, the Kingdom is seeking a sovereign nuclear capability that offers lasting security in the Middle East. Another factor that may have nudged Washington toward a deal with Riyadh was the lurking possibility of Saudi Arabia turning to Russia or China instead.
Through the nuclear agreement, Washington has ensured that Riyadh stays within the ambit of a strategic partnership spanning energy, technology, and regional security. The US-Saudi civil nuclear pact is being billed as the “deal of the century” for the Kingdom: it meets Saudi Arabia’s nuclear energy needs while giving Washington leverage to steer Riyadh away from Beijing and Moscow. Perhaps the most consequential spillover from the agreement will be how it shapes Washington’s approach to the nuclear ambitions of other regional powers — Turkey, Egypt, and the UAE among them — especially if Saudi Arabia succeeds in securing enrichment rights on its soil.
The issue of nuclear proliferation has never been more acute for the volatile Middle East. An uncontrolled nuclear expansion in the region could open a Pandora’s box, sharply compounding proliferation concerns. It also raises questions about regional stability at a time when the US is unable to offer its regional allies concrete security guarantees. There is a glaring contradiction at the heart of US policy in the Middle East: on the one hand, Washington is pressuring Iran to halt its nuclear programme and submit to stringent IAEA inspections; on the other, it is helping its long-standing ally, Saudi Arabia, acquire critical nuclear technology whose ultimate designs remain, at best, an open question. This contradiction is likely to heighten tensions among rival Middle Eastern states and fuel a new kind of nuclear arms race. Pakistan’s institutionalised defence cooperation with Saudi Arabia — both the bilateral Strategic Mutual Defence Agreement and the trilateral Mecca Joint Defence Agreement, which brought Turkey into the fold — only widens the avenues for nuclear proliferation rather than narrowing them. Ultimately, a civil nuclear deal between the US and Saudi Arabia, a longstanding regional rival of Iran, is set to further stoke tensions across the region.
About the authors:
- Vivek Mishra is Deputy Director – Strategic Studies Programme at the Observer Research Foundation.
- Surya Prakash Noutiyal was a Research Intern at the Observer Research Foundation.
Source: This article was published by the Observer Research Foundation.
