Energy · Saudi Arabia

Saudi Arabia Aims to Cut Domestic Oil Use, Explore Nuclear Power

Saudi Arabia is planning to significantly reduce its domestic consumption of liquid fuels by 2030, with natural gas and renewables leading the charge, while also exploring nuclear power as a future energy source.

News AutomationCompiled 05:05 UTC · 1 min read

Saudi Arabia aims to reduce its domestic oil consumption and explore nuclear power as part of its energy transition.

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Saudi Arabia Plans To Free 1 Mb/d As it Invests in Nuclear Power

By Charles Kennedy - Sep 01, 2026, 7:00 PM CDT

Saudi Arabia wants to displace more than 1 million bpd of domestic liquid-fuel consumption, primarily through natural gas and renewables by 2030.
Nuclear could play a larger role after 2030, with a proposed 2.8-GW plant potentially displacing the equivalent of around 105,000 bpd of crude.
A new U.S.-Saudi nuclear cooperation agreement opens the door to U.S. suppliers, but political, regulatory and geopolitical hurdles could significantly delay development.

Riyal

Saudi Arabia’s power stations, desalination plants, factories and farms consume more than 1 million barrels per day of liquid fuel that the kingdom aims to displace by 2030. Natural gas and renewables will provide most of the replacement energy. Nuclear power could reduce domestic oil consumption further after 2030 as electricity demand continues to grow.On July 22, the United States and Saudi Arabia signed a 30-year civil nuclear cooperation agreement, clearing the way for U.S. companies to potentially supply the kingdom with reactors, nuclear materials and technical services. Similar agreements with Turkey and the UAE entered into force in June 2008 and December 2009, respectively.

The commercial opportunity is in Saudi Arabia’s search for additional generating capacity. The IEA estimates that the kingdom’s electricity demand grew by 3.8% in 2025 and forecasts average annual growth of 3.1% through 2030.

Saudi consumption of crude oil and fuel oil for power generation rises sharply during the summer, when air-conditioning demand peaks. Combined burn reached 1.42 million b/d in June 2024, according to the EIA. It fell to an average of 678,000 b/d in January and February 2025(the lowest level for that period since 2016) with February alone registering an 11-year monthly low of 589,000 b/d. Reducing domestic oil-fired generation can leave more petroleum available for export or other uses.

The Jafurah unconventional gas field, which began production in December 2025, is a central part of Aramco’s plan to increase its sales-gas production capacity by approximately 80% by 2030 from 2021 levels. Saudi Arabia is also targeting as much as 130 GW of renewable capacity by 2030. Gas and renewables are intended to replace liquid fuels in power generation, while the broader Liquid Fuel Displacement Program seeks to displace more than 1 million b/d across utilities, industry and agriculture. With no reactor vendor selected or construction timetable established, nuclear power is unlikely to contribute materially to that target by 2030.

Saudi Arabia’s proposed first commercial nuclear plant would be built at Duwaiheen, on the Gulf coast. The Saudi regulator has granted a site-preparation licence for two pressurized-water reactors, each with capacity of between 1.0 GWe and 1.6 GWe, but no vendor has been selected. The project offered to prospective suppliers has been described as two reactors of approximately 1.4 GWe each, giving the plant 2.8 GW of nameplate capacity.

Operating at a 90% capacity factor, a 2.8-GW plant would generate about 22 TWh annually. If all of that output replaced oil-fired generation with an assumed thermal efficiency of one-third, it would be equivalent to approximately 105,000 b/d of crude oil, based on the EIA’s crude-oil energy conversion factor. Actual oil displacement would be lower to the extent that nuclear generation met additional demand or displaced natural gas or renewable power.

And there have been questions, too, about why the Saudis would want nuclear power when they have vast solar capabilities. But the case for nuclear power rests partly on what it can provide when solar generation is unavailable.

A study published in August by the King Abdullah Petroleum Studies and Research Center estimates that nuclear power could produce firm electricity for about $60/MWh–roughly 30% less than solar paired with batteries, depending on the level of reliability required. Hal Turton, the study’s author and a principal fellow at the center, describes nuclear as “a competitive source of firm, low-carbon electricity.”

So, there appears to be a case for Saudi Arabia to pursue nuclear power, despite the regional proliferation implications, but it’s a long and winding road littered with geopolitical hurdles.

The White House submitted the agreement to Congress on Aug. 24, and it is subject to 30 days of consultation and a further 60 days of review. And important political and technical questions remain, not the least of which is Trump’s current insistence that it all depends on Saudi Arabia establishing diplomatic relations with Israel. That condition was conveniently missing from the Energy Department’s public announcement and it remains unclear whether it forms part of the submitted agreement or associated documents.

By Charles Kennedy for Oilprice.com

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