US reverses support for Saudi nuclear deal amid shifting Middle East policy

The U.S. President has reportedly reversed support for a nuclear deal with Saudi Arabia, according to Al Jazeera. This development highlights shifting U.S. foreign policy priorities in the Middle East, particularly regarding nuclear diplomacy. The Abraham Accords, signed in 2020, facilitated normalization between Israel and several Arab states, including the United Arab Emirates and Bahrain, and have been a focal point in regional diplomacy. Recent geopolitical tensions have brought Saudi Arabia into discussions related to the accords, potentially affecting broader diplomatic negotiations in the region. Key Takeaways The reported reversal of U.S. support for a Saudi nuclear deal appears to impact market perceptions negatively around Iranian reconstruction funding being part of a U.S.-Iran deal in 2026. Market pricing suggests a moderate decrease in the likelihood of a U.S.-Iran deal including Iranian reconstruction funding, with current odds at approximately 29% YES. The geopolitical context, including the Abraham Accords and U.S.-Saudi relations, appears to influence market sentiment regarding Middle East diplomacy and nuclear agreements. What to Watch Observers should monitor any...