The US-Saudi Nuclear Deal: Supply Chain and Non-Proliferation Implications

On 18 November, the US and Saudi Arabia concluded a series of agreements on strategic, defence and economic cooperation. At least two of these agreements are directly relevant to US-Saudi cooperation in the civil nuclear sector, although the precise details of their contents are not yet clear. While any hopes that Saudi Arabia may become a meaningful player in US efforts to diversify its own nuclear supply chain are misplaced, the strategic implications of these agreements should not be underestimated. The details of the deal – critically, whatever non-proliferation provisions are agreed on as part of the deal – will have consequences for the broader region.

Not the Supplier You’re Looking For

Among the series of cooperation agreements concluded by the US and Saudi Arabia last week, at least two appear to directly touch on cooperation in the civil nuclear energy sphere. According to the White House, The Joint Declaration on the Completion of Negotiations on Civil Nuclear Energy Cooperation ‘builds the legal foundation for a decades-long, multi-billion-dollar nuclear energy partnership with the Kingdom; confirms that the United States and American companies will be the Kingdom’s civil nuclear cooperation partners of choice; and ensures that all cooperation will be conducted in a manner consistent with strong non-proliferation standards.’ Meanwhile, the Strategic Framework for Cooperation on Securing Uranium, Metals, Permanent Magnets, and Critical Minerals Supply Chains will presumably grant the US access in some form to Saudi Arabia’s natural uranium reserves. Though what either of these agreements will look like in practice remains unclear.

Global civil nuclear supply chains are notoriously oligopolistic, with only a small number of commercial and national players operating at each phase of the nuclear fuel cycle. This is in part due to the high threshold to entry into the civil nuclear space, as nuclear technology and materials are highly regulated and tightly controlled as a result of associated proliferation risks. The markets for uranium conversion and enrichment services, the production of nuclear fuel assemblies and the construction of nuclear power plants (NPPs) are today dominated to a large degree (though certainly not monopolised) by Russia. China – which has a thriving domestic nuclear energy – is still a relative new-comer and small player on the export market but is clearly angling to become a heavy-hitter in its own right in global nuclear energy markets. Following Russia’s full-scale invasion of Ukraine, this concentration of the market – first and foremost in Russian entities – caused concern over the resilience of Western nuclear supply chains and efforts by Western governments and industry to diversify away from Russian supplies.

In this context, the entry of new players into the civil nuclear market is a positive development. However, it is worth tempering expectations when it comes to the US-Saudi agreements. Hopes that Saudi Arabia can play any meaningful role in diversifying away from Russian supplies of mined or enriched uranium in US civil nuclear market are at best extremely premature and ultimately misguided. When it comes to mined uranium, Saudi Arabia’s natural uranium deposits are relatively limited. US utilities source most of their natural uranium from Canada, Kazakhstan and Australia. If the US is indeed concerned over future supplies of natural uranium, it would do better to focus on securing access to additional deposits in existing supplier states in Central Asia (namely, Kazakhstan) or on the African continent – regions where Russia has its own ambitions for securing greater access to uranium deposits.

Indeed, the US’ dependency on Russia – and where China looks ready to gain a greater foothold – is first and foremost in relation to the supply of enriched uranium. In 2024, 20% of the enrichment services purchased by US utilities were still Russian. Saudi Arabia does not have – and is not currently expected to receive as part of the agreement – uranium enrichment technology. The set up of new enrichment facilities takes years – that’s not accounting for the time it takes to sort out the necessary regulation before ground is even broken. There are much easier and near-term ways of diversifying away from Russian enriched uranium supply to US and other Western markets, which are already ongoing – namely, the expansion of existing enrichment capacity in Europe and in the US.

Long-Term Relationships

However, the strategic implications of the agreements – including on regional non-proliferation issues – could be significant. Nuclear energy projects – due to the highly concentrated supply chains and the very long project life-cycles and contract lengths – tie customers into decades-long relationships with their original equipment manufacturers (OEMs). This is particularly true when it comes to suppliers of nuclear reactors. Russia has been adept at leveraging its nuclear sector as a tool of political influence; Western suppliers – namely, the US, UK and France – have been less successful in this, in part due to the atrophying of domestic nuclear industries in the face of cheap and otherwise attractive Russian alternatives. With energy demands projected to grow exponentially in the Middle East and North Africa in the coming decade (by 50% from 2024 demand, according to the International Energy Agency) driven largely by cooling and desalination needs, nuclear power is expected to play an increasing role in the region’s energy mix. Globally, the IAEA estimates that nuclear energy capacity will increase anywhere from 50% to 160% by 2050 from 2024 levels. The interest expressed by tech companies in nuclear technology to power their artificial intelligence ambitions is also instructive.

Who controls the civil nuclear supply chains in the future therefore matters immensely. As such, any efforts to bolster the resilience and export capacity of existing nuclear sectors of countries friendly to the interests of the US, the UK and our partners should be encouraged. As others have noted elsewhere, should the US-Saudi agreements include the construction of nuclear power plants by US companies, this can help bolster the US nuclear reactor industry and help position it to play a greater role on nuclear reactor export markets in future. This would have more than just economic implications. The growing importance of the nuclear sector in the global energy mix and the long-term presence that reactor OEMs maintain in a country’s critical sector carry significant political implications – including with regard to non-proliferation matters.

Not all nuclear technology suppliers are created equal when it comes to their non-proliferation expectations of customers. The US concludes so-called ‘123 Agreements’ (named after Section 123 of the U.S. Atomic Energy Act), which require recipients of US nuclear technology to comply with a range of strict non-proliferation requirements. As of July 2025, the US has 26 123 Agreements in place, including with the United Arab Emirates (allowing US companies to supply services and components related to the UAE’s Barakah Nuclear Power Plant). Any nuclear cooperation with Saudi Arabia will presumably have to be preceded by the conclusion of a 123 Agreement, which will spell out the non-proliferation expectations the US has for Saudi Arabia. In a region where nuclear proliferation concerns are far from theoretical issues, the details matter. So do the players that lead the development of nuclear technology in the region and the precedents they set.

Russia – the leading exporter of civil nuclear technology – also incorporates proliferation-relevant provisions into its nuclear projects abroad. However, its relationship with Iran has rightly raised concerns over just how seriously Moscow takes into account non-proliferation considerations when deciding to conclude civil nuclear agreements abroad. To be sure, the Russian construction of Iran’s Bushehr Nuclear Power Plant (NPP) is perfectly within the parameters of Iran’s right to receive and use nuclear technology for peaceful purposes and does not in itself pose a direct proliferation risk. However, it does beg the question of whether Moscow should continue exporting nuclear technology to a state of acute proliferation concern, which has for years been refusing to fully cooperate with the IAEA and whose leadership has repeatedly alluded to a willingness to pursue weaponisation. As the author has noted previously, the Bushehr project grants Russia political and economic leverage over Tehran which it could choose to use in order to pressure Iran to comply with its non-proliferation obligations, at the risk of losing access to Russian civil nuclear technology and expertise. So far, Moscow has chosen not to do so. Instead, in early November, Russia concluded an agreement to build eight more reactors in Iran, while recent reporting has suggested that Moscow has – at the very least – turned a blind eye to weaponisation-relevant exchanges between Russian and Iranian scientists.

Russia and China have also previously expressed an interest in supplying Saudi Arabia with nuclear reactor technology. While the country does not present nearly as acute of a proliferation risk as Iran and is currently in good standing with the International Atomic Energy Agency, Saudi Crown Prince Mohammed bin Salman has previously stated that, if Iran were to get a nuclear weapon, the Kingdom would follow suit. Such threats cannot be taken lightly and the non-proliferation expectations that any supplier of civil nuclear technology to Saudi Arabia puts in place as a condition of cooperation will be critical.

Setting the Bar High

By securing a preferential position for itself in Saudi Arabia’s future civil nuclear sector, the US will help mitigate the risk of greater Russian or Chinese influence in a critical sector of a strategically important regional power. Of course, interest from Moscow and Beijing to enter the Saudi nuclear market will no doubt persist, with Rosatom in particular being able to offer highly-competitive financing and project arrangements. US government will have to work closely with industry, as well as with governments and businesses in other friendly civil nuclear supplier states (namely, France, Japan, South Korea and the UK), to find a way of matching and exceeding Russian and Chinese offers – potentially through cross-sector proposals.

Critically, in its nuclear cooperation with Saudi Arabia, the US has the opportunity to present a direct contrast to Russian nuclear cooperation with Iran by setting the highest standards on non-proliferation in its agreement with Riyadh and holding the Kingdom accountable to those standards going forward. Saudi Arabia is already implementing its Comprehensive Safeguards Agreement with the IAEA (having rescinded its Small Quantities Protocol in 2024); it should also be expected to implement the Additional Protocol, as the UAE had done prior to the conclusion of its ‘123 Agreement’ with the US.

Following the announcement of the US-Saudi agreements, US Energy Secretary Chris Wright indicated that uranium enrichment is not included in the deal; this is a sensible course of action and should be adhered to. There is currently no technical need for Saudi Arabia – or the region – to possess an enrichment capability; namely, because there are currently no facilities in the Middle East to produce nuclear fuel. As such, any enriched uranium enriched in Saudi Arabia would have to get shipped abroad anyway for the manufacturing of nuclear fuel assemblies. Meanwhile – as the Iranian case has demonstrated – enrichment technology poses a real proliferation risk. The UAE has foregone domestic enrichment and instead imports manufactured fuel assemblies from South Korea (with other services across the fuel cycle being provided by US, Canadian, British, French and Russian companies). A similar import-based model for a Saudi nuclear programme would help further reinforce the precedent of import-based fuel cycles in the region and would help highlight the ability of other regional states – namely, Iran – to operate civil nuclear programmes without access to domestic enrichment.

As the US and E3 grapple with how to deal with the persistent threat posed by the Iranian nuclear programme, the central role that regional actors must play in helping address the threat has become clear. Setting clear norms on what responsible development of civil nuclear technology in the region looks like must be part of that effort. The UAE is often referenced – including by those in the region – as an example of what a non-threatening nuclear energy programme in the Gulf could look like. That example must be amplified. The Barakah NPP has set a precedent; the Saudi case must reinforce it.

© RUSI, 2025.

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