State Department Greenlights Massive APKWS Sale to Saudi Arabia

The State Department clears a $1.96 billion package of laser-guided rockets for Saudi Arabia, arming Riyadh with up to 20,000 precision-guidance kits to counter Iran’s drone threat.

The State Department has cleared a possible $1.96 billion sale of Advanced Precision Kill Weapon System (APKWS) guidance sections and related equipment to Saudi Arabia, the department’s Bureau of Political-Military Affairs said July 15.

The proposed Foreign Military Sale, detailed in State Department Transmittal #26-85, published July 15, covers up to 20,000 APKWS-II guidance sections — split evenly between air-to-air and air-to-ground variants — along with LAU-131 launchers that let the laser-guided rockets be fitted to Saudi Arabia’s fixed-wing combat aircraft. BAE Systems, based in Nashua, New Hampshire, is the principal contractor.

“The proposed sale will improve Saudi Arabia’s capability to deter current and future threats by strengthening its homeland defense, and improving interoperability with U.S. forces, and other regional and NATO forces,” the State Department said in a statement accompanying the transmittal.

“The proposed sale will also augment Saudi Arabia’s operational aircraft and enhance its air-to-air, and air-to-ground self-defense capability. The Kingdom of Saudi Arabia will have no difficulty absorbing this equipment and services into its armed forces,” the department added.

“There will be no adverse impact on U.S. defense readiness as a result of this proposed sale,” the department said, using language it applied to both this transmittal and a separate one approved the same week.

The scope of the package reflects Saudi Arabia’s need to counter a rising wave of one-way attack drones. Iran’s Hesa Shahed 136 has been among Tehran’s principal weapons for striking U.S. partners across the Persian Gulf, including Saudi Arabia.

Iran and Iranian-backed forces have waged a sustained campaign of missile and drone strikes against Gulf Cooperation Council states since Feb. 28, 2026, when U.S. and Israeli strikes on Iran triggered what is now widely referred to as the 2026 Iran war.

According to reports at the time, a Shahed-136 drone struck Saudi Aramco’s Ras Tanura oil refinery in the kingdom’s Eastern Province on March 19, 2026, briefly shutting down the facility. The Saudi Defense Ministry said it intercepted additional drones targeting the site.

Amnesty International has documented Iranian strikes, most likely carried out with Shahed drones, that killed civilians in Bahrain and Saudi Arabia in March 2026. Three men were killed and at least 10 people were injured in an attack on a labor camp in Al Kharj, Saudi Arabia, on March 8, the human rights group said.

BAE Systems had not issued a public statement addressing the Saudi approval as of July 17. Saudi Arabia’s government also had not confirmed acceptance of the offer; under the Foreign Military Sale process, State Department approval opens a congressional notification period before a formal Letter of Offer and Acceptance is signed. Iran had not responded directly to the sale, and no member of Congress had raised a formal objection.

The APKWS-II guidance kit converts an unguided 2.75-inch Hydra 70 rocket into a laser-guided precision munition. It has been used to arm AH-64D/E Apache attack helicopters operated by Saudi forces.

BAE Systems said in February that it had delivered its 100,000th APKWS laser-guidance kit, describing the program as providing U.S. forces and allies with low-cost, reliable precision munitions.

The July request is roughly 10 times the volume of a March 2025 Saudi APKWS purchase of 2,000 rounds valued at $100 million.

A complete APKWS round has typically cost between $20,000 and $40,000, compared with roughly $450,000 for an AIM-9X air-to-air missile and more than $1 million for an AIM-120 AMRAAM — a cost gap that underpins the case for using APKWS against inexpensive drone threats. Estimates vary: Army Recognition puts the guidance kit alone at $15,000 to $22,000, while The Defense Post cited a per-unit cost near $22,000 in the 2025 sale.

Separately, and in the same week, the State Department approved a possible $484 million sustainment package for Kuwait’s fleet of Boeing C-17 Globemaster III strategic transports under Transmittal #26-61, with Boeing as the principal contractor. Kuwait’s air force operates two C-17s, according to FlightGlobal’s 2026 World Air Forces directory.

“This proposed sale will support the foreign policy and national security objectives of the United States by improving the security of a major non-NATO ally that has been an important force for political stability and economic progress in the Middle East,” the State Department said of the Kuwait package. As with the Saudi notification, the department’s statement did not indicate the sale would alter the basic military balance in the region — standard language used across both cases.

The Saudi APKWS approval extends a run of major U.S. arms sales to the kingdom this year, including a $3 billion F-15 sustainment package cleared Feb. 3 and a $9 billion Patriot Advanced Capability-3 Missile Segment Enhancement package cleared Jan. 30.

Saudi Arabia is also developing its own long-range strike drone, called SKYWASP, through the SR2Vector joint venture between Utah-based Vector and Saudi-based SR2 Defense Systems, with a reported range of up to 1,500 kilometers (932 miles), according to The Defense Post — a sign the kingdom is pursuing offensive as well as defensive drone capabilities.

Under the Foreign Military Sale process, State Department approval and congressional notification through the Defense Security Cooperation Agency mark a determination that a sale may proceed. They do not constitute a finalized contract, which requires a signed Letter of Offer and Acceptance and remains subject to congressional review. No signature date or delivery schedule had been announced as of July 17.

The APKWS-II program has been in U.S. service since 2012 and has been supplied to multiple American allies as a lower-cost alternative to larger guided missiles for use against drones and lightly armored targets.