After more than two years of negotiations at the intelligence and security levels hosted by Iraq, Oman, and China, Saudi Arabia and Iran announced on 10 March that they had reached an agreement to resume diplomatic relations and reopen embassies and diplomatic missions within a maximum of two months. This was part of a deal struck following five days of secret negotiations that took place in Beijing between 6-10 March between the Secretary of the Supreme National Security Council of Iran, Ali Shamkhani, and Saudi Arabia’s Minister of State, Member of the Cabinet, and National Security Adviser, Musaad Al-Aiban.
The settlement also involves the implementation of the Security Cooperation Agreement signed on 17 April 2001, and the General Agreement for Cooperation in the Fields of Economy, Trade, Investment, Technology, Science, Culture, Sports, and Youth signed on 27 May 1998.
Growing Chinese Influence
The Saudi-Iranian agreement exemplifies a trend that has emerged in the international system since the conflict in Ukraine: the United States no longer maintains control over the composition of the global power structure. Essentially, the agreement can be seen as a departure from China’s traditional economic roles in international politics and an attempt to enter the arena of international conflicts, and more specifically, the Middle East, which serves as a stage for reshaping international balances.
According to some assessments, Beijing’s announcement of the Saudi Arabia-Iran settlement violates the Carter Doctrine of 1980, which viewed the Gulf region as the United States’ sole sphere of influence. The basis of this new role is an approach to foreign policy that prioritizes practical economic interests over strategic considerations. It’s also an effort on China’s part to present itself as a rising global power capable of establishing global stability while steering clear of Western interventions that are losing favor in the region.
This is in line with Beijing’s efforts to position itself as a “nation of peace” (in contrast to portraying the United States as a “warmonger”) on the international stage, a concept central to President Xi Jinping’s Global Security Initiative (GSI) unveiled last year. The GSI emphasizes the primacy of countries’ sovereignty, calls for non-interference in the internal affairs of states, puts an end to confrontation between blocs, and promotes joint international efforts to achieve more stability and certainty in a volatile world.
Last February, the Chinese Foreign Ministry released a report titled “US Hegemony and Its Perils”, which discussed the dangers of US practices to global peace and stability and the well-being of all peoples. Notably, the Saudi-Iranian tripartite statement advanced the central ideas of Chinese diplomacy, such as affirming respect for the sovereignty of countries, non-interference in the internal affairs of countries, and urging countries to make all efforts to enhance regional and international peace and security. Speaking about the agreement, a senior Chinese official claimed that the negotiations showed China’s GSI in action.
Due to the United States’ focus on competing economically and strategically with China in the Indo-Pacific, a power vacuum has developed in the Middle East region, leaving countries like Saudi Arabia and Iran looking for new partners. This gave China the chance to step in and fill the gap in the region with its expanding economic and diplomatic influence. This influence was reflected in the adoption of diplomatic initiatives to resolve conflicts between the two major regional powers, based on the idea that maintaining Beijing’s economic and geopolitical interests in the Middle East depends on the consolidation of stability among its key states.
This move sends signals to Washington that China is capable of establishing close ties with countries that are traditionally viewed as allies to the United States, such as Saudi Arabia. However, China does not seek and is not yet capable of taking over the United States’ traditional security role in the Middle East. Beijing does not want the Middle East to be under its sole sphere of influence and does not try to impose its development model or ideology on the region’s people. Instead, it is making efforts to foster conditions favorable to the pursuit of its strategic economic, commercial, and diplomatic objectives.
Despite the Iranians’ and Saudis’ efforts over the past two years to advance their reconciliation with the help of regional mediators, particularly Iraq and Oman, it was necessary to find international support for the Iranian-Saudi reconciliation in order to guarantee both sides’ adherence to the terms. Since US sponsorship was out of the question due to animosity between the United States and Iran, China’s position as the largest buyer of Iranian crude oil and the largest foreign trading partner for Saudi Arabia made it an attractive alternative. Beijing appears to have used its economic interests to push the two countries into negotiations while taking advantage of the favorable political climate. Both President Xi Jinping’s visit to Saudi Arabia in December 2022 and President Ibrahim Raisi of Iran’s visit to China in February 2023 likely included discussions of Chinese mediation.
China sponsored the reconciliation in an effort to break free from the awkward situation of balancing its relations with the Saudi Arabian and Iranian sides while treading a thin line. Despite signing a 25-year strategic cooperation agreement between Iran and China, the Chinese were hesitant to go too far in their alliance with Iran in order to keep the peace with their Gulf partners and avoid angering them. China was also cautious in bolstering ties with the Saudis so as not to upset Tehran. For China, the significance of the Saudi-Iranian reconciliation derives from the necessity of securing the Belt and Road Initiative’s sea-lanes, including the Strait of Hormuz, Bab El-Mandeb, and the Gulf of Aden.
Calculations of Iran and Saudi Arabia
The resumption of ties between Saudi Arabia and Iran at this time is motivated by numerous political and economic factors based on current domestic and international conditions. The motivations of the two parties can be examined as follows:
• Saudi Arabia: Saudi Arabia’s decision to end the diplomatic boycott with Iran was motivated by a number of factors, including a desire to abandon its commitment to a unipolar world, a desire to increase the independence of its foreign policy, a desire to diversify its strategic alliances with other world powers like China, India, and Russia without displacing the United States as its primary source of weapons, and a desire to signal to Washington that it is capable of taking advantage of global shifts to explore to explore its options away from it in order to further its strategic interests. This is especially true given the growing mistrust caused by Washington’s disregard for Saudi security concerns and Riyadh’s desire to find political solutions to some of the regional conflicts involving its interests in Yemen, Syria, Iraq, and Lebanon. The agreement has the potential to end Houthi drone attacks on Saudi Arabian infrastructure across the border.
In addition to these factors, Riyadh’s internal reform of its foreign policy behavior was a driving force for change in Saudi Arabia’s position. Saudi Arabia’s current interests are tied to the political, economic, financial, and cultural objectives of Vision 2030, which are based on diversifying regional and international alliances to adapt to global systemic changes and consolidating security and political stability to enable Saudi Arabia to carry out its ambitious development plans related to becoming a regional hub for business, media, and entertainment. This requires the establishment of a state of regional security and stability, which cannot be done as long as Iran continues to face military threats from the US, Europe, and Israel, and vice versa, and as long as one of the countries in the region faces the threat of dissolution and chaos.
• Iran: Iran’s decision to resume ties with Saudi Arabia was motivated by a number of factors, including a desire to lessen regional and international isolation in the wake of stalled nuclear agreement negotiations following the discovery of uranium enriched to 84.7 percent in its nuclear facilities, its provision of drones and ballistic missiles to Russia in its conflict with Ukraine, the continuation and suppression of popular protests, and its expulsion from the UN Economic and Social Council (ECOSOC), which made it vulnerable to international criticism. Tehran, which is suffering as a result of US sanctions, is also hoping to gain from the resumption of business ties with Saudi Arabia. The restoration of relations between Iran and Saudi Arabia is consistent with the “neighborhood diplomacy” that President Ebrahim Raisi has employed since assuming office in August 2021, when the Iranian government declared that one of its top priorities in the region is to launch a new peaceful diplomatic process.
Tehran also hopes that Riyadh will stop supporting the opposition Mojahedin-e-Khalq Organization (MKO), which Tehran regards as a terrorist organization, and withdraw its support for the opposition Iran International TV channel, which is run by a Saudi citizen from London and is widely watched inside Iran and supports the protests. By signing this agreement, Tehran guarantees that the Arabs will not join any future military effort against it, and the Iranian regime will appear as capable of achieving external achievements despite international and local pressures. This agreement also undermines the idea of forming an anti-Iranian Middle Eastern security alliance, which the United States and Israel seek to establish. This reconciliation with Saudi Arabia might influence other countries to follow suit.
Many people are hopeful that the restoration of diplomatic ties between Saudi Arabia and Iran, the two major regional powers, will be the first step toward defusing tensions and finding diplomatic solutions to conflicts.
One cannot, however, take the change in diplomatic representation as proof that the Saudi-Iranian détente has been successful. Disputes between the two countries have broken out in the past, despite the presence of ambassadors. The success of the agreement between Saudi Arabia and Iran depends on Iran making adjustments to its regional policies. If Iran doesn’t change its behavior, the agreement will fail to achieve security and stability in the region as a whole and will instead just address isolated problems like reopening embassies, resuming trade relations, and stopping attacks. The anticipated regional repercussions of the agreement are as follows:
• The US’ Level of Involvement in the Middle East: The United States initially responded to the agreement with a clear sense of confusion, as it appeared unaware of Chinese mediation or had not anticipated it. This response demonstrates China’s growing political and economic influence in a region that has been a major focus of US foreign policy for decades and that Washington viewed as its exclusive sphere of influence. The agreement, however, cannot be interpreted as a fatal blow to US influence in the region or as evidence that the US is taking over from China as the region’s dominant power. With about 34,000 US soldiers still stationed in the region, the US still has a sizable military presence there and strong arms deals with the region’s major nations. Riyadh’s move towards a more independent path with regard to its regional interests is not so much directed at Washington as it comes in the context of regional reconciliations that included Qatar and Turkey. It does not also imply breaking off from the US partnership, as Turkey classified Qatar as a strategic non-NATO ally, despite its close relationship with Iran.
• The Expansion of the Arab-Israeli Normalization Scope: The United States wants to change the regional system in the Middle East so that Israel is a crucial component of the security framework. The Saudi-Iranian reconciliation is a setback to Washington’s efforts to use Iranian threats to forge an Arab-Israeli alliance against it because it creates a front against Israeli interests in the region and lessens US pressure on Saudi Arabia to ratify the Abraham Accords. Saudi Arabia may insist that Washington provide it with more incentives to accept normalization with Israel, such as US security guarantees, support for a civilian nuclear program, and loosening restrictions on arms sales to Saudi Arabia. If this happens, it would be a setback for one of Netanyahu’s greatest foreign policy achievements, namely the Israeli normalization accords.
On a parallel note, the reconciliation between Saudi Arabia and Iran may have an impact on the Netanyahu administration’s efforts to further isolate Iran and launch successful military operations against its nuclear facilities and Revolutionary Guards commanders. The agreement served as a warning from Iran to the Israeli government that Tel Aviv cannot count on Riyadh to back Israeli military action against Iran, which has a negative impact on Israel’s regional strategy and exacerbates its internal political crisis. Politicians in Israel were divided when the agreement was announced, and some of them accused the Netanyahu administration of failing and claimed that the internal commotion distracted it from more important regional issues like Iran. However, it is not ruled out that Saudi Arabia will pursue multiple, concurrent political paths that include both Iran and Israel at the same time, following the example of a country that was able to strike a balance by maintaining cordial relations with both Iran and Israel. Perhaps as part of a strategy of strategic hedging and an effort to balance its interests in light of concerns regarding a long-term settlement with Iran, Riyadh permitted its officials to leak its conditions for normalization with Israel to the Wall Street Journal.
• Calming Regional Tensions: The rivalry between Saudi Arabia and Iran contributed to the rise in regional hostility and tension; however, by coming to an amicable agreement, one of the most long-standing sources of instability in the region’s security can be eliminated. The agreement may help to defuse tensions, set the stage for breakthroughs in regional crises like Lebanon and Iraq, and advance efforts to reach political agreements in hotspots of active conflict like Yemen and Syria, where the two countries support opposing parties through diplomatic channels. The agreement, however, may not immediately put an end to the disputes and will not entirely deal with their root causes.
Reconciliation can prevent Saudi territories and installations from being targeted by the Houthis, which is thought to be the most crucial to Saudi Arabia, and can also improve the maritime security environment in the Gulf and Red Sea. Additionally, it can strengthen a cease-fire between the warring parties and make finding political solutions to the conflict a top priority. However, it does not mean that all of the conflict’s complexities will be resolved because there are still other considerations. First, there is no guarantee that the Islamic Revolutionary Guard Corps (IRGC), which adopts policies and agendas independently of the government, and the Houthis won’t cooperate in ways that threaten Saudi Arabia. The Houthis have their own agenda, which may include maintaining their relationships with the IRGC. Second, it is impossible to decide Yemen’s political future without considering the Houthis. Third, there are other players in Yemen besides the Houthis and the Presidential Leadership Council, such as the separatists in the south who are fighting for their own state and are politically represented by the Southern Transitional Council (STC). These groups may oppose any agreement that would give the Houthis any kind of influence over southern Yemen. In a similar vein, STC members responded to the statement on reconciliation by stating that they would not accept any agreement between the Saudis and the Houthis on any issues pertaining to southern Yemen. Thus, even if the crisis’ regional component is resolved, local motivations still exist and must be addressed in order to advance Yemen’s political process and bring about a genuine and long-lasting Yemeni-Yemeni peace.
Observers are hopeful that the regional détente will help improve the political climate in Lebanon and end the political impasse by speeding up the presidential election process, which will then improve the country’s deteriorating economic situation. But in exchange, it won’t be enough to bring about the profound structural changes necessary to address the ongoing social, economic, and political collapse. Additionally, the competition between currents, groups, and factions trying to impose their visions of the regime on an unstable political, social, and economic scene accounts for a portion of the Lebanese crisis rather than regional factors. These domestic actors each have their own goals, pressures, and agendas. Concerning the Syrian crisis, the reconciliation between Saudi Arabia and Iran may increase Saudi Arabia’s willingness to hasten Syria’s reintegration into the Arab world and, in the future, set the country up to establish diplomatic ties with Damascus.
• Securing Shipping Lanes: The rapprochement between Iran and Saudi Arabia can reassure the oil-producing and -consuming countries regarding the reliability of energy supplies and keep international energy corridors, particularly those in the Persian Gulf and the Strait of Hormuz, away from being targeted. Attacks by terrorists, robberies, interceptions of tankers and the seizure of their cargo have raised the cost of insurance, thereby driving up the cost of supply chains. In addition to Saudi Arabia and its neighbors, the protection of supply routes and the prevention of armed militias from attacking oil refineries on the Arab coast of the Gulf are concerns for global markets.
• Promoting Regional Reconciliation: If the two main rivals in the Middle East can be brought together through mediation, it may open up more opportunities for other nations, particularly Bahrain, to achieve a similar rapprochement. After the exchange of ambassadors and the conclusion of the Saudi-Iranian reconciliation, Manama will be the only member of the Gulf Cooperation Council without formal ties to Tehran. Bahrain appears to be heading in the same direction. On 18 March, on the sidelines of the 146th session of the Inter-Parliamentary Union, the Bahraini Parliament Speaker, Ahmed Al-Musallam, met with an Iranian Shura Council delegation led by Mojtaba Rezakhah, who called for the expansion of government and parliamentary relations between the two countries. Manama may be motivated to thwart any Iranian efforts to undermine Bahrain, but it is not anticipated that this will result in a significant change in Bahrain’s stance toward Israel.
Reestablishing ties between Saudi Arabia and Iran will not immediately resolve regional issues or put an end to the competition for regional hegemony that has marked bilateral relations between the two countries since 1979. There is no sign that the Iranian regime will abandon its strategic goals of regional hegemony, proxy-based influence expansion, and nuclear program advancement. However, the agreement provides a starting point for discussing ways to defuse regional tensions and for pressuring Iran to consider Gulf interests and not target them, lessening the likelihood of a wider conflict.
This is what it means to work around the “security dilemma” and try to improve relations. The term “security dilemma”, which Herz coined in his 1950 book Idealist Internationalism and the Security Dilemma, governs relations between Iran and the Gulf. Essentially, it refers to a state’s propensity to strengthen its military, political, economic, and ideological capabilities for defensive reasons related to fending off risks, while surrounding parties anticipate aggressive intentions, which heightens the state of hostility.
Using this logic, the Iranian leadership sees Israel and the US as inherently hostile to Iran while also viewing US security relations with Saudi Arabia and other Gulf states as existential threats to the Islamic regime. As a result, it works to build up its military capabilities, including nuclear weapons, as a preventative measure to thwart US-Israeli aggression. Additionally, it uses its militias (e.g. Hezbollah, the Houthis, the Popular Mobilization Forces, and others) in Arab countries as a first line of defense against potential Israeli and American threats. The Gulf states, on the other hand, have strengthened their security ties with the United States and possibly Israel as a result of their perceptions that Iran is willing to use its power against them, which has increased Iranian perceptions of regional threats. This is what causes each party’s hostile perceptions of the other to persist, and efforts to manage and calm them remain confined, and this is what leads us to expect the state of regional competition to persist, which leads us to expect the current state of regional competition to persist.
It is important not to overlook the pragmatic nature of Iranian foreign policy. Given that those who draw Iranian foreign policy are not diplomats, but rather people with ties to the IRGC who believe that spreading its ideology is the only way to ensure Iran’s security, Iran’s acceptance of rapprochement with Saudi Arabia would not have occurred unless under duress, and it did not result from a conviction of the need to change the behavior of its foreign policy.
Thus, Iran’s foreign policy is still largely based on the dominant expansionist ideological viewpoint, which is based on the ideas of exporting the revolution, extending beyond national boundaries, and using foreign weapons. The Supreme Leader of Iran, the Ministry of Foreign Affairs, the Quds Force, and the Supreme National Security Council all have a hand in shaping Iran’s foreign policy, making the process fraught with potential for disruption. Add to this the erratic nature of Saudi-Iranian relations that have experienced ups and downs since 1930, including during the Shah’s rule and following the Islamic Revolution. Additionally, the agreement did not outline specific procedures, implementation procedures, or a precise timeline for resolving significant disagreements. By continuing to advance its nuclear and missile programs, which Saudi Arabia views as posing a threat to regional security, Iran did not also give up on its aspirations for regional hegemony.
Despite the significance of this agreement in terms of China’s growing international role and its transformation into an active international pole in a region that has traditionally been completely subject to US influence, it also represents a test for China’s ability to present effective diplomatic initiatives, as any setback to reconciliation as a result of the Saudi-Iranian geopolitical competition will cast doubt on Beijing’s ability to play effective global roles. In this regard, it should be noted that one of the drawbacks of Chinese mediation is the lack of Chinese guarantees in the event that one of the parties breaches the contract. For instance, the United States’ provision of security guarantees to the parties engaged in negotiations is one of the factors contributing to the success of Arab arms deals with Israel.