Saudi Arabia, Iran to renew ties: What it means for the world

We take a look at the rivalry between the two nations, what the deal entails, and its global implications.

A history of the regional rivalry

The rivalry between Saudi Arabia and Iran is rooted in Islamic sectarianism. While Iran is the foremost Shia state in the world, Saudi Arabia is considered to be the religious home of Sunni Islam. In modern times, this sectarian rivalry has translated into a tussle for regional hegemony. This has played a role in both sides being involved in multiple proxy conflicts against each other in Iraq, Lebanon, Syria and most devastatingly, Yemen.

According to The New York Times, in Yemen, Saudi bombs aimed at reversing gains by Iranian-backed rebels have killed large numbers of civilians. Those rebels have responded by firing increasingly sophisticated missiles and armed drones at Saudi cities and oil facilities. All sides in the conflict have repeatedly violated human rights and international humanitarian law, a Council on Foreign Relations report said. A December 2020 UN report said that since 2015 the “war caused an estimated 233,000 deaths, including 131,000 from indirect causes such as lack of food, health services and infrastructure”.

The surprise new agreement is welcome in context of the human toll that the Saudi-Iran rivalry has taken. However, this does not mean that all problems will be immediately resolved.

Some challenges ahead

One of the major roadblocks to a true thaw in relationships is the underlying sectarian tension between Shias and Sunnis. A diplomatic deal does little to change this.

Furthermore, there are specific geopolitical questions which have not been directly addressed. For instance, in both the wars in Yemen and Syria, Iran and Saudi Arabia find themselves on opposite sides – these conflicts will continue to fuel antagonism between the two countries.

Also, Iran is highly critical of Saudi Arabia’s closeness with the United States.  The US has crippled Iranian economy with its sanctions regime for decades. On the other hand, Saudi Arabia is vary of the large network of armed militias across West Asia that Iran funds and backs, seeing them as a threat to its own sovereignty as well as the regional balance of power.

These tangible issues will continue to be roadblocks in building any sort of close ties between Iran and Saudi Arabia. However, the newly struck diplomatic deal can be a good starting point for more negotiations and agreements.

Why now?

Given the plethora of issues that divide Iran and Saudi Arabia, it is pertinent to ask why a deal has suddenly been struck now. What changed?

In Saudi Arabia, the ascension of Mohammad Bin Salman has brought with it a major overhaul in diplomacy and domestic politics. The New York Times reports that his “Vision 2030” plan calls for diversifying the oil-dependent economy by attracting tourism and foreign investment, drawing millions of expatriates to the kingdom and turning it into a global hub for business and culture. This vision is central to Saudi Arabia’s changing diplomatic stances.

Regional peace will be crucial to turning Saudi Arabia into the global hub that “Vision 2030” envisions. This has led to Saudi Arabia making concerted efforts to end long-standing conflicts/rivalries with powers across the region – with the Iran deal the latest such move.

Furthermore, it has also led to Saudi Arabia slowly moving away from the singular influence of the United States in its foreign policy. While the US continues to be Saudi Arabia’s biggest military supplier, in recent years, the desert kingdom has courted various powers including Russia, China and now, Iran.

For Iran, the agreement comes as it accelerates its nuclear program after two years of failed U.S. attempts to revive a 2015 deal that aimed to stop Tehran from producing a nuclear bomb, Reuters reported. However, a brutal sanctions regime and internal tensions have made it difficult for Iran to achieve its goals. Finding allies in the region is of utmost importance to Iran when the Khomeini regime is perhaps at its weakest since the revolution.

China’s desire to be a global diplomatic power

The United States has for a long time wielded great influence in West Asia. It has been the predominant global power that has had influence over geopolitics in the conflict-ridden region. However, China’s role as peace broker is yet another sign of changing currents in the region. China has historically maintained ties with both countries and the latest deal points to China’s growing political and economic clout in the region, The New York Times reported.

“China wants stability in the region, since they get more than 40 per cent of their energy from the Gulf, and tension between the two (Iran and Saudi Arabia) threatens their interests,” Jonathan Fulton, a nonresident senior fellow for Middle East programs at the Atlantic Council in Washington, told The New York Times.

Daniel Rusel, a top US diplomat during Barack Obama’s presidency, told Reuters that it was unusual for China to act independently to help broker a diplomatic deal in a dispute to which it was not a party. Thus, this move shows China’s desire to play a bigger diplomatic role on the world stage.

“The question is, whether this is the shape of things to come?” Russell said. “Could it be a precursor to a Chinese mediation effort between Russia and Ukraine when Xi visits Moscow?”

Concerns for the United States

Crucially, this deal and China brokering it, does not portend well for the United States.

“The drawback is that at a time when Washington and Western partners are increasing pressure against the Islamic Republic … Tehran will believe it can break its isolation and, given the Chinese role, draw on major-power cover,” Naysan Rafati, senior Iran analyst at International Crisis Group, told Reuters.

Mark Dubowitz, the chief executive of the Foundation for Defense of Democracies, a Washington-based think tank that supports tough policies toward Iran and China, told The New York Times that the deal could potentially be a “lose-lose” for the US. He said it showed that Saudi Arabia lacks trust in Washington, that Iran could peel away U.S. allies to ease its isolation and that China “is becoming the major-domo of Middle Eastern power politics,” The New York Times reported.

However, other observers are less pessimistic. Trita Parsi, an executive vice president of the Quincy Institute, a Washington group that supports U.S. restraint overseas, told The New York Times, “While many in Washington will view China’s emerging role as a mediator in the Middle East as a threat, the reality is that a more stable Middle East where the Iranians and Saudis aren’t at each other’s throats also benefits the United States.”

Thus far, the United States itself has been restrained in its response, dismissing any suggestions that China has overtaken it as West Asia’s predominant power while overtly “supporting any effort to de-escalate tensions in the region”.

Israel in a tricky spot

The move has ushered in a wave of anxiety in Israel which shares no formal diplomatic ties with either nation. But while Israeli leaders see Iran as an enemy and an existential threat, they consider Saudi Arabia a potential partner. And they had hoped that shared fears of Tehran might help Israel forge ties with Riyadh, The New York Times reported.

This new deal has potentially scuppered Israel’s diplomatic strategy in the region as domestic turmoil has engulfed the country.
While Iran and Saudi Arabia may still fall out, for the time being, this diplomatic agreement has ushered in major change in geopolitical dynamics in West Asia and can be the start of a greater global geopolitical realignment.