What happened
President Trump has thrown the recently signed Saudi nuclear deal into uncertainty by making it conditional on Saudi Arabia normalizing relations with Israel. The condition, announced Thursday, appears to contradict statements from the Energy Department, which said the deal was signed Wednesday without any such contingency. White House press secretary Karoline Leavitt confirmed that Trump said if the Saudis do not join the Abraham Accords, 'the deal is off.'
Why it matters for the market
The Saudi government has long insisted that normalization with Israel requires a pathway to a Palestinian state, a condition Israel has rejected. Experts say the new demand likely caught the Saudis off guard. Bryan Clark of the Hudson Institute suggested Trump may be trying to address criticism from Israel supporters and hawks who felt the U.S. got nothing in return for the deal.
The deal, signed by Energy Secretary Chris Wright and Saudi counterpart Prince Abdulaziz bin Salman, includes a 123 agreement and a bilateral safeguards agreement. It provides for a two-year study on whether uranium enrichment is necessary. Lawmakers and nonproliferation experts have raised concerns about safeguards to prevent enrichment beyond civilian levels.
Sen. Tim Kaine noted that unlike the UAE civilian nuclear deal, the Saudi agreement does not appear to require the additional protocol for IAEA inspections. Rep. Brad Sherman expressed uncertainty about Trump's seriousness, saying 'you never know whether Trump's serious about anything.'
What traders should watch
Congress has a 90-day review window but cannot block the deal. Experts are divided on whether the new conditions will persist. Robert Einhorn of the Brookings Institute said Trump may be using the announcement to increase leverage with the Saudis, but added he wouldn't be confident the conditions will last long. The Saudi Embassy in Washington has not commented.
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