Who are the winners and losers in Iran-Saudi ties? - analysis

New relations between Saudi Arabia and Iran have the potential to reshape the region. They also have the potential to maintain processes that have existed for a decade.

A shift in the US role in the region from countering terrorism after 9/11 to countering peer rivals, such as China and Russia, has meant the region is also rewriting its ties with Washington and Beijing.

The looming crisis of an Iranian nuclear weapon plays into the relevance of these new ties. In addition, new Saudi-Iran ties could reduce conflict in Lebanon, Yemen, Iraq and Syria. Are there clear winners and losers out of the deal, or is it more nuanced? Here are three questions to ask.

Loss of US influence?

Much of the discussion of the new Iran-Saudi ties has been focused on the perceived loss of US influence. This argument posits that China was able to swoop into the Middle East and broker Iran-Saudi ties – at the expense of US interests and influence.

The reality is more complex. US-Saudi ties go back a whole century; for much of the Cold War, Saudi Arabia was a key pillar of US relations in the region, and a stable one at that. Whereas other countries like Iran shifted ruling regimes, and Iraq turned against the US and invaded Kuwait in 1990, Saudi Arabia was a mainstay.

The US also worked with Riyadh during the conflict in Afghanistan, when the US was close to Pakistan and arming the Mujahideen. Ties with Saudi Arabia shifted a bit over the years, especially with concerns that Riyadh was continuing to enable extremist ideology.

However, Saudi Arabia shifted its policies slowly after 9/11 and the rise of Mohammed bin Salman has reshaped perceptions of Riyadh and set it on a more independent course in foreign policy. This is typical of other countries that have historic ties to the US – other examples are Turkey and Qatar.

Every country makes its own policies, and it’s hard to read the Saudi outreach to Iran as a blow to the US when many have seen Riyadh’s other policies as drifting away from the US orbit over the last years. For instance, after the Iranian attack on Abqaiq in 2019, the US didn’t support a Saudi response. There have been calls in the West to stop arming Saudi Arabia during the war in Yemen. As well, Riyadh’s decision to break ties with Qatar in 2017 was seen as controversial.

This means that the latest decision by Saudi Arabia to renew ties with Iran may not be related to US policy. The US didn’t demand Saudi Arabia break ties with Iran in the first place. The US has a strategic alliance with Qatar, which in turn has close ties with Iran, as does Turkey, which is a NATO member. Saudi Arabia is merely doing what other US partners have done.

A win for China?

LAST YEAR, Iran and China implemented a 25-year deal to improve ties. China has not only expanded ties with Iran. In December 2022, China also committed to a five-year plan with six Gulf countries; China’s Xi Jinping met with Gulf leaders in 2022 as well in a meeting hosted by Saudi Arabia.

China’s outreach in the Gulf and with Iran goes back years. This comes amid the US viewing China and Russia as near-peer rivals that Washington wants to confront. The more China has partnerships in the Gulf, the more the US has warned countries that those partners could impact some level of ties with the US over sensitive issues, such as countries that want to acquire F-35s.

China has clearly sought to expand its relationships in the region, and the decision by Iran and Saudi Arabia to work with China on normalization with each other is part of China becoming a diplomatic broker in the region.

Though this is a win for China, it was also a natural country to host this final step. Iran and Saudi Arabia already held talks in Baghdad about reconciliation, talks that began in 2021 and continued off-and-on with some stalls in 2022. Overall, the trajectory was clear.

Saudi Arabia had also reconciled with Qatar early in 2021, and it was rumored to be considering closer ties with Israel, a slow process that began back in 2015. The train was on the tracks for Saudi-Iran ties, all it needed was a bit of a push – which China gave

Does Israel lose out?

The potential for better Israel-Saudi ties have been a constant issue of speculation. Days before the Saudi-Iran deal was announced, there were reports in the Wall Street Journal and New York Times about Riyadh seeking security pledges from Washington as part of some kind of upgrade of ties with Israel.

Clearly, Saudi Arabia has been working on multiple policy tracks: China, Russia, the US and potentially Israel, all part of Riyadh’s new positioning of a more complex independent policy.

It’s unlikely that Iran ties will necessarily impact Israel negatively. Saudi Arabia has interests in Yemen and Lebanon, as well as in Syria and Iraq. In many ways, Saudi Arabia’s interests dovetail with Israel’s in terms of stability and not wanting Iran’s militias or proxies running these countries.

The Gulf in general is moving to reconcile with Syria, which can reduce chaos in the region. The era of war that defined the period after the Arab Spring, and the era of conflict that began decades ago with the rise of extremists, appears to be coming to some kind of a close.

The shifts in the Gulf are important for this to happen. Extremist groups have, one-by-one, been ejected by most Gulf states, except in Qatar. There is less funding for these groups; al-Qaeda and ISIS have been mostly defeated.

Stability and state-to-state relations are part of the new era. This is underpinned by big country politics and also deals that Israel has played a role in such as the Negev Summit, I2U2 and the Abraham Accords. Iran-Saudi ties can be viewed as part of that larger process of diplomacy.

As such, Israel might not lose out. Saudi Arabia can now articulate its concerns to Iran through diplomacy, rather than being at loggerheads. Countries tend to listen more than they have a way to speak and engage with one another, rather than portraying each other as enemies. New ties could reduce the Iranian threats.