On March 10th, 2023, Iran and Saudi Arabia agreed to re-establish their diplomatic relations, in a deal sponsored by China, ending seven years of estrangement and changing the regional balance of power in the Middle East. Saudi Arabia cut ties with Iran in 2016 after its embassy in Tehran was stormed during a dispute between the two countries over Riyadh's execution of a leading Shiite cleric for terrorism, which escalated tensions between the two countries. In the last decade, the two countries have fought proxy wars in Syria, Iraq, Lebanon, and Yemen and maintained a fierce enmity towards one another, while competing for influence in the region. This surprising new agreement between the two regional rivals, includes the restoration of diplomatic relations, within a maximum period of two months.