The US-Saudi Nuclear Deal: Abandoning the Gold Standard

Foreign Policy Research Institute

The United States and Saudi Arabia signed a historic 123 Agreement on July 22, 2026, establishing a bilateral nuclear cooperation framework that deviates from traditional nonproliferation standards. By potentially allowing Saudi uranium enrichment without requiring the International Atomic Energy Agency's Additional Protocol, the deal undermines the decade-old 'Gold Standard' designed to prevent nuclear weapons development.

Historically, Washington insisted that partner nations forgo domestic enrichment and spent-fuel reprocessing, a restriction formalized in the 2009 US-UAE 123 Agreement. However, Riyadh resisted these constraints, leveraging its strategic position to secure concessions. US industrial capacity remains severely limited. Domestic firms like Westinghouse design reactors but rely on South Korea and Italy for critical components like reactor vessels and pressurizers. Furthermore, domestic enrichment capabilities are dominated by European-owned Urenco, while American firms like Centrus lack commercial scale. Consequently, these diplomatic concessions may yield minimal economic benefits, potentially driving Riyadh toward nuclear cooperation with Russia or China.

Comment

The erosion of the nonproliferation "Gold Standard" in the US-Saudi 123 Agreement exposes the deep structural decay of the American civil nuclear industrial base. While Washington attempts to leverage reactor exports for geopolitical alignment, domestic entities like Westinghouse no longer possess the heavy manufacturing infrastructure required to produce critical large-scale components. This supply chain hollowing is demonstrated at Plant Vogtle, where the newest American reactors had to import reactor vessels from South Korea and pressurisers from Italy. Consequently, the United States is attempting to export a commercial capability it cannot domestically manufacture.

This American industrial deficit is even more acute in the front end of the fuel cycle, where domestic enrichment capacity is virtually non-existent. The primary operational enrichment facility in the United States is owned by the European consortium Urenco, while domestic alternatives like Centrus remain limited to demonstration-scale cascades. Without a rapid expansion of the DEUCE centrifuge programme at Oak Ridge, Washington cannot supply the low-enriched uranium required to fuel any future Saudi reactors.

Strategic Question for Discussion

If the DEUCE centrifuge programme at Oak Ridge fails to achieve commercial scale, what are the long-term consequences for Washington's ability to enforce nonproliferation standards through future bilateral 123 Agreements?

The available evidence suggests that a failure to scale domestic enrichment technologies like the DEUCE centrifuge would permanently compromise Washington's nonproliferation leverage. Without a viable domestic fuel supply chain, future partners seeking nuclear energy will increasingly view American 123 Agreements as economically hollow, driving them toward state-backed suppliers in Russia or China. Consequently, the United States would lose both its commercial market share and its ability to dictate global nuclear safeguards.

Share your assessment in the comments below.

To read in details click here