What happened
The Trump administration is reportedly close to finalizing a civilian nuclear cooperation agreement with Saudi Arabia that could allow the kingdom to enrich its own uranium, according to multiple reports. The deal, known as a '123 Agreement,' is expected to be announced as early as Wednesday and would span 30 years, providing a framework for U.S. companies to help develop Saudi Arabia's civilian nuclear program. The agreement is designed to strengthen ties between Washington and Riyadh amid the ongoing conflict with Iran, while also generating billions of dollars for the U.S. nuclear industry.
Why it matters for the market
Under the terms, Saudi Arabia could potentially be permitted to enrich uranium or process plutonium following a joint U.S.-Saudi study on the economics of domestic fuel production, officials told The New York Times. The accord reportedly includes limits on international inspection requirements compared to previous U.S. nuclear cooperation agreements, marking a departure from the 'gold standard' set in the 2009 U.S.-United Arab Emirates nuclear accord, under which Abu Dhabi agreed not to enrich uranium and allowed enhanced IAEA inspections.
The agreement also contains two classified side letters that the Trump administration intends to keep private, citing national security and proprietary business concerns, according to the Times. Energy Secretary Chris Wright is expected to sign the deal alongside Saudi Energy Minister Prince Abdulaziz bin Salman, with whom he discussed the agreement during a trip to the region last year.
What traders should watch
Congress will have 90 days to review the deal after it is submitted under the Atomic Energy Act. The agreement is likely to pass unless lawmakers secure enough votes to override President Trump's measure. The White House has not yet commented on the reports.
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