US-Saudi Nuclear Deal Hangs in Balance as Israel Normalization Condition Remains Unmet

The US and Saudi Arabia have signed a civilian nuclear cooperation agreement, known as a 123 agreement, which allows for decades-long, multi-billion-dollar partnership on nuclear nonproliferation. The agreement has a 30-year term and provides the legal framework for long-term civilian nuclear cooperation between the two countries.

The deal is conditional upon Saudi Arabia normalizing relations with Israel, a requirement that seems difficult to satisfy given the Kingdom's hardline stance against Israel until a Palestinian state is established with East Jerusalem as its capital. The agreement was signed on July 22 by US Secretary of Energy Chris Wright and Saudi Minister of Energy HRH Prince Abdulaziz bin Salman bin Abdulaziz.

The nuclear cooperation agreement has significant implications for Saudi Arabia's energy sector, as it could free up oil exports by reducing domestic consumption. According to the International Energy Agency (IEA), transport accounts for roughly 30 percent of Saudi Arabia's final energy consumption, and industry accounts for 19.9 percent. A reactor can take about five or more years to be built after licensing and regulatory approvals are already completed.

Saudi Arabia's first nuclear plant is expected to consist of two reactors, each producing around 1.4 GW, bringing the plant to a total capacity of 2.8 GW (2,800 MW). Assuming a 90 percent capacity factor, annual energy generation will be 22.1 TWh per year, nearly five percent of Saudi Arabia's 431.9 TWh electricity generation.