Saudi-Iranian Normalization: What’s behind the Surprising Deal?

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he Islamic Republic of Iran and the Kingdom of Saudi Arabia have decided to resume their diplomatic relations after a seven-year hiatus. The negotiations were initiated by Chinese President Xi Jinping and took place in Beijing on March 6-10, with State Minister Musaid bin Mohammed al-Aiban and Secretary of the Supreme National Security Council Ali Shamkhani representing Saudi Arabia and Iran, respectively.

As a result of the talks, both nations have agreed to reopen their embassies within two months and revive their Security Cooperation Agreement (2001) and the Comprehensive Cooperation Agreement (1998). These agreements were originally signed with Saudi Arabia during Mohammad Khatami’s reformist presidency in Iran.

The diplomatic rupture between the two nations stemmed from Saudi Arabia’s execution of Shiite religious leader Ayatollah Sheikh Nimr Baqir al-Nimr in early 2016, which provoked a mixed reaction on the streets of Iran and led to the arson of the Saudi Embassy in Tehran.

Consequently, diplomatic relations between the two countries were severed, and their strained relations were further aggravated by proxy wars in the region for five years. However, negotiations between the two have been underway for the past two years with Iraq and Oman as intermediary countries – the role of which was acknowledged by both Iran and Saudi Arabia, which thanked them in the agreement text.

Reasons behind normalization

The agreement signed on March 10 has distinct motivations for all three parties involved. Iran’s objective is to expand its network of partners in response to the international isolation caused by the U.S. sanctions. Since assuming office, President Ebrahim Raisi has emphasized his country’s commitment to cultivating positive relationships with neighboring countries and looking towards the East rather than the West. Therefore, the decision to reestablish diplomatic ties with Saudi Arabia is significant in mitigating Iran’s losses resulting from sanctions and diplomatic isolation.

Saudi Arabia opted for normalization as a means of avoiding potential risks such as the loss of U.S. support and pressure from Iran, particularly after the election of President Joe Biden. This agreement also carries significant implications for Saudi Arabia. The government in Riyadh, which has frequently operated under the security umbrella of the United States, is signaling to the Biden administration that it has other options. This message could also be interpreted by the U.S. as a warning that it risks losing its partners in the region to Iran and China if it fails to provide adequate support.

China’s global vision prioritizes the stability of the Middle East due to the region’s abundant oil and natural gas resources and investment potential. The presence of conflicts and instability in the Middle East poses a significant obstacle to China’s economic opening policy. Therefore, it seeks to establish favorable relations with both Tehran and Riyadh, recognizing that the tension between the two countries indirectly affects it. The recent visit by Xi Jinping to Saudi Arabia highlighted the challenges China faces in this regard. The bilateral talks between Beijing and Riyadh, and the statements following the China-Gulf Cooperation Council (GCC) summit, had an adverse impact on China’s relations with Iran.

Despite diplomatic efforts and Iranian President Raisi’s visit to Beijing, had the situation at the time persisted without any substantial improvement in Tehran-Riyadh relations it would have posed challenges for China. What is more, the ongoing tension restricted China’s opportunities for cooperation with both countries.

The decision by Iran and Saudi Arabia to hold negotiations in China was a significant political message aimed at the United States. Iran has long opposed the U.S. and has urged other countries to create an alternative system to the one in which the U.S. is the dominant power. Saudi Arabia, a long-time ally of the U.S. that has relied on its security protection, has partially heeded Iran’s call. Although it may not be seeking to build an anti-U.S. system, Saudi Arabia’s decision to negotiate with Iran in China sends a clear message to the U.S. that it cannot take its alliances for granted.

Consequences for regional and global politics

The agreement reached between Saudi Arabia and Iran is likely to have a positive impact on the region’s conflicts and instability. The revival of the security agreement of 2001 is particularly significant, as it signals a commitment by both parties to avoid interventions that could undermine each other’s security. This, in turn, suggests that the era of “proxy wars” between Saudi Arabia and Iran, particularly in competitive regions, such as Yemen, may be coming to a close.

The strained relations between Iran and Saudi Arabia had contributed to Iran’s diplomatic isolation, as Saudi Arabia had been actively funding influential media outlets, such as the Washington, D.C.-based news television channel “Iran International” to portray Iran negatively to the international community. Thus, the recent détente between Iran and Saudi Arabia is expected to alleviate some of the international pressure on Iran. This development is particularly significant for the country given the challenges it has been facing due to the recent internal protests and subsequent crackdowns.

China’s mediation in the Iran-Saudi Arabia agreement is a significant source of diplomatic success and prestige for the country. It indicates that China’s desire to fill the gap left by the U.S. in the region is becoming more concrete. The agreement is a manifestation of China’s aspiration to exert influence not only in the economic sphere but in the realm of politics and diplomacy. Undoubtedly, the successful diplomatic efforts of both Muslim countries will have a practical impact on reducing the pressure felt by China regarding the Uyghur issue, thereby serving as another advantage for China in this process.

It is expected that the Washington administration will react to this process soon, as despite the U.S. initial positive diplomatic and discursive stance, the recent development has produced three distinct undesirable outcomes for it.

First, its claim to be the global hegemon and its political authority has been seriously undermined in the Middle East. Second, China, its biggest rival, is expanding its influence in the Middle East as an economic power, and now as a political and diplomatic one as well. Finally, there is a high likelihood that Israel will be adversely affected by this process. It is known that Israel, which is the most important partner of the U.S. in the Middle East, has benefited for years from the opportunities created by the internal conflicts and weaknesses in the region.

Although the process is fragile and prone to disintegration, China has declared its aspiration to become the hegemon in the Middle East, a title the U.S. has long claimed for itself. We will see how the U.S. will respond to this challenge in the coming days. No doubt, this answer will serve as an effective dynamic in the global superpower struggle.