Central idea: Saudi Arabia and Iran, two of West Asia’s major powers that have been at odds with each other for decades, agreed to restore diplomatic relations last week in an agreement brokered by China.

Saudi-Iran Ties: A timeline

• Pre-1979: Saudi Arabia and Iran compete for regional dominance.
• 1979: Iranian Revolution brings down the monarchy and turns Iran into a Shia theocratic republic.
• 1980-1988: Iran-Iraq war sees Saudi Arabia support Iraq.
• 1990-1991: Saudi Arabia supports Iraq against Iran in the Gulf War.
• 1996: Iranian-backed Hezbollah bombs Saudi military housing complex in Khobar, killing 19 US soldiers.
• 2011-2015: Saudi Arabia and Iran support opposing sides in the Syrian civil war.
• 2015: Saudi Arabia launches military intervention in Yemen against Iranian-backed Houthi rebels.
• January 2016: Saudi Arabia executes prominent Shia cleric Sheikh Nimr al-Nimr, leading to protests in Iran and the burning of the Saudi embassy in Tehran.
• 2016: Saudi and several Arab allies cut diplomatic ties with Iran.
• 2019: Saudi oil facilities are attacked, leading to increased tensions between Saudi Arabia and Iran.
• 2021: Both begin direct talks, brokered by China.
• March 2023: Both nations announce an agreement to restore diplomatic ties, brokered by China.

Reasons for hostile relations

The hostility between Saudi Arabia and Iran has its roots in a complex mix of historical, geopolitical, religious, and ideological factors.

• Religious contradictions: Historically, the rivalry between the two countries dates back to the seventh century when the Prophet Muhammad died without a clear successor, leading to a dispute over the leadership of the Muslim community. This dispute ultimately resulted in the split between Sunni Islam (which dominates in Saudi Arabia) and Shia Islam (which dominates in Iran).
• Geopolitical tensions: The two countries are located in a strategically important region, with both seeking to exert influence and maintain dominance in the Middle East. Iran’s Islamic revolution in 1979 posed a challenge to Saudi Arabia’s status as the leading Islamic power in the region, and the two countries have been competing for regional influence ever since.
• Sectarian tensions: Saudi Arabia and Iran have long had competing visions for the role of Islam in society. Saudi Arabia promotes a strict interpretation of Sunni Islam known as Wahhabism, while Iran supports Shia Islam and the principle of the “Guardianship of the Jurist,” which asserts that a senior Shia cleric should have political power and authority over all Muslims.
• Ties with west: The two countries have fundamentally different views on a range of issues, including democracy, human rights, and regional security. Saudi Arabia is a conservative monarchy with close ties to the United States, while Iran is an Islamic republic that has been at odds with the West since the 1979 revolution.

All these factors have contributed to the ongoing hostility between Saudi Arabia and Iran, and the tensions between the two countries continue to have a destabilizing effect on the region.Top of Form

What are the terms of the agreement?

• The details of the agreement are yet to be unveiled.
• Iran has reportedly agreed to prevent further attacks against Saudi Arabia from Houthi-controlled parts of Yemen while Saudi Arabia has agreed to rein in Iran International, a Farsi news channel critical of the Iranian regime.
• Foreign Ministers of both countries will meet soon to thrash out the terms of the reconciliation before reopening embassies in each other’s capitals in two months.
• China is planning to host a cross-Gulf conference of Iran and the six Gulf monarchies to further strengthen peace in the region.

Why did Saudi Arabia reach out to Iran (defying the US)?

Ans. Iran’s Rise, and Changing Alliances

• Internal Security: When Saudi oil facilities were attacked in 2019, the US looked away, prompting the Saudis to look for alternative solutions for the Iran problem, such as reaching out to the Iranians.
• Differences over Palestine: The US was trying to broker a normalization agreement between Saudi Arabia and Israel to bring the two pillars of its West Asia policy together against Iran.
• US negligence of West Asia: The US deprioritized West Asia due to bigger foreign policy challenges, such as the Russian war in Ukraine and China’s rise in the Indo-Pacific.
• Obsolesce of ties with US: Relations between Saudi Arabia and the US have been rocky in recent years, as the US is not as dependent on Gulf Arabs as it used to be during the Cold War.
• Shared opinions over Israel: Saudi Arabia has been hesitant to reconcile with Israel, and its relations with the US have been rocky in recent years.

What led Iran to accept the deal?

• Isolation and Domestic pressure: Tehran is aware that getting relief from Western sanctions is not a near-term possibility. Despite crackdown, protests in Iran refuse to die down.
• Crumbling economy: Iran’s economy is deteriorating and its currency, the rial, is struggling. A deal with Saudi Arabia, under China’s mediation, could open economic lifelines for Iran
• China factor: Iran wanted Chinese investments and support for the rial. China allowed Iran to withdraw parts of the $20 billion funds frozen with Chinese banks due to US sanctions.
• Fouling American efforts: Iran knows that such a deal could complicate American efforts to rally Arab countries and Israel against it. A reconciliation with Saudi is beneficial for Iran, at least in a tactical sense.

Why is China brokering the deal?

• Securing its oil supplies: China has an interest in promoting stability in the Middle East region, which is a major source of oil and natural gas for China.
• Side-lining the US: By brokering a deal between Saudi Arabia and Iran, China can position itself as a mediator and gain goodwill from both sides.
• Create alternative axis: China has longstanding relationships with both countries. The US since Trumps departure is distancing itself from the US, whereas China is also getting closer to Russia amid the war.
• Image building as a leader: While the US is busy rallying the Western world to arm Ukraine to push back Russia and weaken Moscow through sanctions, China is quietly brokering peace in the Global South.

US reception of this deal

• Welcomed the move: The public narrative is that the peace deal would help stabilize the region and benefit the global energy market.

Key implications for the US

• Hegemony decline: The US would not like to lose its influence in West Asia even when it is deprioritizing the region.
• Saudi drifts away: US sees an ally (Saudi Arabia) drifting further away, a rival it wanted to contain (Iran) making new friends, and China spreading and deepening its influence in a region the US has dominated historically.
• Iran Sanctions going loose: The Iran nuclear deal is practically dead and the US wants Saudi Arabia to normalize ties with Israel and put up a joint front against Iran.

What inferences can be drawn from all these?

• Strategic realignments in West Asia: It can be inferred that West Asia is currently undergoing significant strategic realignments, with the UAE normalizing relations with Israel and other Arab countries deepening their partnerships.
• Shifted US focus on Ukraine and Indo-Pacific: The US, which traditionally held significant power in the region, has deprioritized West Asia due to bigger foreign policy challenges such as Russia’s war in Ukraine and China’s rise in the Indo-Pacific.
• China occupying power vacuum: This deprioritization has created a power vacuum that has allowed Iran to rise as a challenge, prompting the US to try to bring Israel and the Arab world together against Iran.

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