Saudi Arabia has initiated efforts to reduce its domestic consumption of crude oil and fuel oil used in power generation, with a target of freeing up more than 1 million barrels per day by 2030. The kingdom’s power stations, desalination plants, industrial facilities and agricultural operations currently consume significant quantities of liquid fuel that officials seek to replace with alternative energy sources.
Natural gas and renewable energy are expected to provide the majority of replacement capacity. The Jafurah unconventional gas field, which began production in December 2025, is central to plans to substantially increase gas production capacity, while solar energy targets aim for as much as 130 GW of renewable generating capacity by 2030. Nuclear power could provide additional displacement beyond that timeframe as electricity demand continues to rise, with the International Energy Agency projecting average annual demand growth of 3.1% through 2030.
A 30-year civil nuclear cooperation agreement signed on July 22 between the United States and Saudi Arabia permits U.S. companies to potentially supply reactors, nuclear materials and technical expertise. Saudi Arabia’s proposed first commercial nuclear facility would be constructed at Duwaiheen on the Gulf coast and would consist of two pressurized-water reactors with individual capacity between 1.0 and 1.6 gigawatts. Operating at typical efficiency levels, such a plant could generate sufficient electricity to offset approximately 105,000 barrels per day of oil-fired generation.
A recent analysis from the King Abdullah Petroleum Studies and Research Center found nuclear power could produce reliable electricity at approximately $60 per megawatt-hour, roughly 30% less expensive than solar installations paired with battery storage systems. However, no reactor vendor has been selected and no construction timeline has been established, making nuclear power unlikely to significantly contribute to the 2030 displacement target. The White House submitted the nuclear agreement to Congress on August 24, subjecting it to review periods totaling 90 days.
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