Explained: An Iran-Saudi shift amidst US-Iran nuclear talks

What changed between the two largest, historically hostile Gulf states? And what has not?

What has not changed?

First, Iran still seeks a regional order that is shaped without the United States. Tehran’s ‘Axis of Resistance’ has usually been a modular instrument that has turned towards US forces in the region, to inflict (usually limited) damage. This allows Tehran a strong bargaining chip to impose human and material costs on the US military, spread across bases in Arab states (with the largest in Qatar).

Saudi Arabia, on the other hand, has historically relied on the United States’ security presence in the Middle East, with the US Air Force using the Prince Sultan Air Base as a hub for regional operations. In his meeting with Prince Khalid, Khamenei emphasised that “it is far better for brothers in the region to cooperate with and assist each other than to depend on others” – a nod to Iran’s continued preference for reduced Saudi dependence on the United States.

Second, while Iran maintains that it is opposed to nuclear weaponisation, its uranium enrichment has proceeded at a faster pace in the period between 2023 (when Riyadh and Tehran normalised ties) and 2025, compared to 2013 and 2015 (when the Obama-era nuclear deal was negotiated and signed).

For instance, when Saudi Arabia was increasingly expressing its distrust of Iran in 2013, Iran’s stockpile of 60% enriched uranium was at 128.3 kgs according to IAEA estimates. By February 2025, two months after MBS expressed support for expanded ties with Iran and the protection of Iranian sovereignty, this estimate was 274.8 kgs.

Moreover, MBS’ position (expressed in 2018 and 2023) that Saudi Arabia will seek its own nuclear deterrent if Iran achieves nuclear weaponization, has not been recently reiterated, but it has not been rescinded either. Objectively then, the material threat of Iranian nuclear weapons is presently the highest ever for Saudi Arabia.

Essentially, while their regional priorities and outlook towards nuclear weapons remain the same, the change has been in their approach to each other.

What has changed for Iran?

Firstly, Iran’s approach to achieving a reduction in the US role in the Middle East has shifted. It now relies less on proxy attacks and more on an organic Trump-driven exit (the US has withdrawn hundreds of troops from Syria over the last week).

Indeed, there have been no confirmed reports of Iran-backed militia attacks on US forces in Iraq since August 2024. Even as the Houthis continue their Red Sea campaign and engage US forces, Iran maintains that its control over the group’s decision-making is limited. A US-Saudi deal for American security guarantees (presumably with more responsibility on regional allies) and a civilian nuclear programme for Riyadh would also not immediately harm Tehran’s interests, especially if it retains its own civil nuclear programme and engages with the American economy.

Secondly, there appears to be a rough consensus within Iran’s strategic community on the need for negotiations with the United States, especially due to Khamenei’s blessing and his unprecedented encouragement of US investment in Iran.

Saudi-Iran relations in the context of Iran-US negotiations have largely witnessed two schools of thought in Tehran. One that prefers intimidating/attacking Saudi Arabia through Iranian proxies, to substantiate the fears of US officials such as JD Vance, and strengthen Iran’s bargaining position. Another that seeks good relations with Riyadh to leverage its influence in Washington to prevent an attack on Iran, as Arab Gulf States Institute Senior Fellow, Ali Alfoneh, also highlights.

Presently, the latter school is dominant. What is clear, however, is that the need for sanctions relief is the main driver of Iranian policymaking – a high-level meeting between Khamenei and senior Iranian government officials on 15th April that sought to assess Iran’s approach to negotiations, was almost fully dedicated to taking stock of Iran’s economic woes and pathways to mitigate them.

What has changed for Saudi Arabia?

For Riyadh, there are technically only five years left for its ‘Vision 2030’ – an ambitious economic and social reform project launched in 2016 by Mohammed bin Salman, and on which he invested much of his political capital (before being elevated to Crown Prince in 2017).

For the Saudi heir apparent, the project is a litmus test of his ability to deliver – given the widescale socio-economic reform he has invested in, with some carried out by muscling out royal court opposition. However, several big-ticket projects under the Vision are set to miss even their extended deadlines, including the $8 trillion NEOM City project.

This categorically increases the need for a safe and sustainable investment environment, which can only be guaranteed by regional stability, a resolution of Riyadh’s conflict with the Iran-backed Houthis, and a manageable relationship with Tehran that is not hostage to the health of US-Iran ties.

Riyadh began articulating this approach in 2021 itself, when MBS called for “a good and special relationship with Iran”, while also hoping that “the Houthis will sit at the negotiating table” to end the Saudi war in Yemen. In that year, he also declared that foreign firms doing business with Saudi Arabia would need to have regional headquarters in the country (which naturally demands more security and stability).

In any case, as Vivian Nereim of The New York Times recently reported, the Houthi attacks in 2019 on Saudi Arabia’s Abqaiq–Khurais oil facilities made Saudi officials recognise the “limitations of their American alliance, pushing them toward talks with Iran rather than continued conflict.” Such Iran-backed militia attacks also showed the markedly asymmetrical costs incurred – about $200,000 for the Houthis (using one-way, kamikaze drones) and an estimated $200 million+ per day (with oil at $60 per barrel at the time) revenue loss for the Kingdom.

By October 2024 (when Iran and Israel exchanged a second round of strikes), it was also clear that any Iranian perception of Arab states supporting/enabling American or Israeli attacks would bring a credible threat of Iranian attacks on Arab critical infrastructure.

Moreover, the Middle East today is on the road to two nuclear deals – a US-Iran deal to prevent Iranian nuclear weaponization (potentially retaining Tehran’s civilian programme), and a US-Saudi deal (a 123 Agreement, according to US Energy Secretary Chris Wright) to kickstart Riyadh’s own long sought civilian nuclear programme. This makes it more imperative for both Gulf capitals to engage each other for stability, even as their regional outlooks remain inherently divergent.

(Bashir Ali Abbas is a Senior Research Associate at the Council for Strategic and Defense Research, New Delhi)