A Deal for Detente? Assessing the China Brokered Iran-Saudi Agreement
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.
This deal is an important diplomatic victory for Beijing as a mediator in the region at a time when Saudi Arabia's relations with Washington have undergone strain since US President Joe Biden assumed power in January of 2021. The Biden administration’s Middle East policies and a strong movement amongst Democrats to hold the Saudi crown prince Mohammed Bin Salman (MBS) responsible for the murder of Jamal Khashoggi, have likely played a role in alienating Riyadh. The Yemen war and OPEC's decision to cut oil output by 2 million barrels a day have also affected US-Saudi defense deals. On June 2nd 2021, the US informed Saudi Arabia that it had decided to withdraw some of its air defense capabilities, including fighter aircraft. This policy change was a result of Saudi atrocities, which included imposing a naval blockade against Yemen and indiscriminately targeting civilian infrastructure there. Many believe that the drone attacks claimed by Yemen’s Houthi rebels (a proxy group financed by Iran), which struck two key oil installations inside Saudi Arabia, led to Saudi Arabia's political leadership becoming disillusioned and disappointed with the unenthusiastic American response to its defense.
Additionally, China needs stability in the Gulf to maintain the flow of 40 percent of its crude oil imports. Iran and Saudi Arabia are pivotal transit points in China’s ambitious new Silk Road initiative, also known as the Belt and Road Initiative (BRI). This agreement reduces tensions and the possibility of a conflict between the two nations, simultaneously stabilizing 2 key partners for China and safeguarding the economic conditions necessary for cooperation.
In April of 2016, the Saudi prince Mohammed Bin Salaman (MBS) announced an ambitious economic development plan called Vision 2030, which is designed to prepare the Kingdom’s economy for the future, by weaning it off its economic dependence on oil revenue, diversifying its investments and attracting international companies to the Kingdom through extensive building projects and spending. The Saudis will need to wind-down their military intervention in Yemen, and reduce the risk of armed conflict with Iran, if they want to further improve their climate for international investment. MBS has staked his political reputation on his image as a man of reform, as a transformer of Saudi society and developer of its economy. This agreement will help him to secure the required conditions to achieve these lofty goals.
One of the benefits that Iran receives in this deal, is potential economic cooperation with a key player in the region, at a time when it is increasingly important for it to be able to break its diplomatic and economic isolation. Rapprochement with Saudi Arabia, formally breaks the anti-Iranian maximum pressure coalition providing it an opportunity to increase its economic engagement in the region. The resumption of flights between the countries also means a revival of religious bridges between the two nations, now that Saudi Arabia has authorized the restoration of the policy allowing Iranians to make Hajj (a sacred pilgrimage that is required of every Muslim). Iran has also welcomed China’s deepening role in the Middle East because it weakens U.S. influence in the region and undermines the U.S.-led sanctions regime that has crippled Iran’s economy.
The agreement might be a turning point for the security and stability of the region. The Iranian-Saudi rapprochement may lessen Gulf Arab states’ security and stability concerns about an imminent conflict with Iran. However, by not including the resolution of the war in Yemen in their normalization agreement, or any of their proxy disputes across the middle east, their commitment towards their recently restored relationship will likely be further put to the test, so long as their proxy wars continue.