Saudi Nuclear Deal Confusion Threatens Billions in Potential US Manufacturing Sales

A deal permitting Saudi Arabia to use American technology to launch a civil nuclear program is looking suddenly unstable, jeopardizing billions of dollars that might otherwise flow to US industrial giants.

Cool Heads, Cooler Isotopes

At issue is a late-breaking demand from the US that Saudi Arabia join the Abraham Accords as a step to normalize relations with Israel, though questions remain over safeguards and guarantees to prevent the country from reprocessing nuclear material into weapons. 

If the 30-year agreement, the product of years of negotiating and multiple US presidential administrations, holds, it could give US nuclear giants a shot at decades of high-margin sales:

• Most likely to benefit is Westinghouse, whose AP1000 nuclear reactor, capable of powering small cities and/or massive data centers, is at the center of the deal.
• Also likely to benefit are Bechtel, Centrus and BWX Technologies, which would each be approved to sell nuclear equipment to the Middle Eastern country. The VanEck Uranium and Nuclear ETF has risen roughly 6% in the past five trading sessions as news trickled out that a deal might be imminent, despite losing momentum on Thursday after the White House imposed a new condition on the agreement.

If negotiators from both sides ultimately reach consensus, Congress will still have a chance to review the pact, though blocking it would require an unlikely veto-proof majority.

Both Foreign and Domestic: The potential deal is far from the US government’s only move to bolster the country’s domestic nuclear industry. Last month, the Department of Energy announced it would offer $17.5 billion of low-interest loans to utilities looking to finance orders of the Westinghouse AP1000. That’s enough money to help build 10 reactors.