Concerns Over Domino Nuclear Proliferation Rise After U.S.-Saudi Nuclear Agreement; International Oil Prices Surge

All Nonproliferation Safeguards Omitted
International Oil Prices Surge for Four Consecutive Days

Reuters Yonhap News

The United States has signed a civilian nuclear agreement with Saudi Arabia, paving the way for Saudi Arabia to undertake nuclear development activities such as uranium enrichment over the next 30 years. With both Israel and Saudi Arabia gaining the ability to develop nuclear capabilities, concerns over nuclear proliferation in the Middle East are mounting. Escalating geopolitical uncertainty, amid continued military clashes between the United States and Iran, has caused international oil prices to surge for four consecutive trading days.

The U.S. Department of Energy announced that on July 22 (local time), U.S. Secretary of Energy Chris Wright and Saudi Minister of Energy Abdulaziz bin Salman signed a bilateral peaceful nuclear agreement. This agreement is based on Section 123 of the U.S. Atomic Energy Act, which forms the foundation for the U.S. government to export nuclear technology and other related elements, and is therefore referred to as the "123 Agreement."

According to the Associated Press, American companies will now be able to provide the technology and materials needed to develop Saudi Arabia's nuclear power infrastructure for the next 30 years under this agreement. Notably, U.S. nuclear power company Westinghouse will have exclusive rights to supply nuclear power facilities to Saudi Arabia.

Importantly, the agreement stipulates that uranium enrichment will be permitted in Saudi Arabia. According to the Wall Street Journal, over the next two years, Saudi Arabia and the United States will jointly study whether it is economically feasible for Saudi Arabia to domestically enrich low-enriched uranium for use in nuclear power. If feasibility is confirmed, U.S. companies will build enrichment facilities in Saudi Arabia and conduct uranium enrichment. This marks the first time that a U.S. civilian nuclear cooperation agreement with another country has included a clause permitting domestic enrichment.

The agreement notably omits the so-called "Gold Standard" clause that limits uranium enrichment levels and reprocessing as established by the International Atomic Energy Agency (IAEA). It also does not include an additional protocol granting the IAEA authority to conduct unannounced inspections of undeclared nuclear facilities.

With the removal of many safeguards intended to prevent nuclear proliferation, some have raised concerns that Saudi Arabia could secretly pursue the development of nuclear weapons. Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman, declared in press conferences in 2018 and 2023 that "if Iran develops nuclear weapons, Saudi Arabia will have to obtain them as well."

Experts have predicted that if Saudi Arabia embarks on nuclear development, other Middle Eastern countries will follow in succession. Henry Sokolski, executive director of the U.S. nonproliferation think tank Nonproliferation Policy Education Center (NPEC), told the Wall Street Journal, "The nuclear path Saudi Arabia is pursuing is one that the United Arab Emirates, Turkey, and Egypt may also wish to follow," adding, "The idea that this will end well is nothing but a delusion."

Meanwhile, the United States carried out another airstrike on Iran that day. Iran, through its Houthi-allied forces in Yemen, has moved to fully blockade the Red Sea in addition to the Strait of Hormuz. According to The Guardian, the Houthi forces announced they attacked two oil tankers in the Red Sea on the day. The UK Maritime Trade Operations (UKMTO) also reported that an oil tanker in the Red Sea was struck by a projectile and caught fire.

Mohammad Bagher Ghalibaf, Speaker of the Iranian Parliament, wrote on the social network X (formerly Twitter), "If we are prevented from selling oil in certain regions, then no one else will be able to sell oil there either," and warned, "If our security is not guaranteed, then no infrastructure will be safe."

The previous day, international oil prices soared on heightened fears that the United States would strike "Pickaxe Mountain," a site suspected to be an underground Iranian nuclear facility. On July 22, the price of West Texas Intermediate (WTI) crude for September delivery surged 2.95% to $86.83 per barrel compared to the previous day, while Brent crude for September delivery jumped 3.36%, closing at $94.07 per barrel.

This content was produced with the assistance of AI translation services.