A New Order in the Middle East: What Are the Implications of the Iranian–Saudi Rapprochement?

The foreign ministers of Saudi Arabia and Iran met in the Chinese capital, Beijing, on April 6, 2023, in the first official meeting between the two countries’ highest diplomatic officials in more than 7 years.

In a joint statement, the two ministers announced the resumption of flights and governmental and private visits between their countries, with their emphasis on opening diplomatic representations during the stipulated two-month period, as part of a landmark agreement brokered by China last month to restore relations between the two countries and end their diplomatic row, after years of hostility that fueled conflicts across the Middle East.

“This Saudi–Iranian rapprochement has aroused great apprehension in U.S. and Israeli circles, despite Washington’s welcoming statements. In fact, the Chinese role in this agreement dealt a blow to the Biden administration, and undermined Israel’s efforts to establish a regional alliance against Iran,” the Carnegie Middle East Center reported on March 13, 2023.

“The most remarkable thing is China’s ability to achieve a major diplomatic achievement in the Middle East amid the stalemate that dominates the region, and it has succeeded in imposing itself as an influential force on the international arena,” the center added.

It is noteworthy that the course of Saudi Arabia’s relations with the United States has recently gone through an important phase of rearranging priorities, especially under the Biden administration, which along with some members of Congress, announced a reassessment of Washington’s relations with Riyadh, following the OPEC Plus decision to cut oil production by about 2 million barrels in October 2022.

Saudi Arabia cut ties with Iran in 2016 after protesters stormed its embassy in Tehran amid a dispute between the two countries over Riyadh’s execution of a Shiite cleric.

Tehran and Riyadh have held five rounds of direct talks since 2019, while informal talks continued after that.

 

Saudi–Iranian Deal

The announcement by Saudi Arabia and Iran, on March 10, 2023, that they had reached, through Chinese mediation, an agreement to soon resume diplomatic relations between them sparked an extensive discussion about the importance of the agreement and its implications in light of China’s increasing influence in the region.

After decades of U.S. failures in the region, China played its role as a powerful mediator in the Middle East and succeeded in achieving reconciliation between Iran and Saudi Arabia, putting the U.S. in an awkward position.

But the signing of the accord in Beijing, which the Biden administration considers its No. 1 geostrategic threat, represents the latest effort by Xi to stake out a larger political presence in the Middle East, where the United States has been the dominant outside power brokering agreements since the end of the Cold War, waging wars and exerting influence in an oil-rich region vital to the world’s energy security.

However, U.S. officials have tried to downplay China’s role in the region, saying that Beijing is still far from outperforming the Americans in a Middle East that remains largely under the protection of the U.S. security umbrella.

Two weeks after the signing of the agreement, collective oil production cuts were announced by OPEC+ members to ensure that prices do not fall below $80 as a preemptive step in the event of any potential reduction in demand.

The decision of the OPEC+ leadership and the member states raised the caution of the United States, which considered that cuts are not advisable at this moment, given the uncertainty in the markets.

OPEC+ went ahead with cuts that prompted President Joe Biden to promise consequences, further straining already strained relations between Riyadh and Washington.

The United States has shown its uneasiness with the influence gained by Saudi Arabia and the UAE as they assert unprecedented control over the oil markets.

As for the last step that disturbed deputies in the U.S. Congress and put pressure on the Biden administration, it was the announcement by a Saudi official of the possibility of opening the kingdom’s consulate in the Syrian capital, Damascus, after Eid al-Fitr.

In response to this news, CIA Director Bill Burns traveled to Saudi Arabia this week to tell the Saudis about Washington’s frustration with being excluded from regional developments, The Wall Street Journal reported on April 6, 2023.

Burns told Saudi Crown Prince Mohammed bin Salman that the United States was shocked by Riyadh’s moves to restore relations with Iran and Syria as part of the kingdom’s increasingly independent foreign policy.

The visit, first reported by the American newspaper, follows a series of surprising diplomatic breakthroughs by Riyadh that have left the United States on the sidelines, which fueled talk of diminishing U.S. influence in the Middle East.

This shift also comes at a time when relations between the United States and Saudi Arabia are still complex, and Washington faces many issues, such as the Russian–Ukrainian war, the Iranian nuclear program, and the Israeli–Palestinian recent developments.

Despite the huge $37 billion deal, according to the White House, between the Saudis and Boeing last month, relations between Washington and Riyadh remained tense after President Biden announced in October a review of its relationship with this historic ally.

In the same context, Simon Henderson, a researcher at The Washington Institute, indicated that the prevailing analysis is that Saudi Arabia decided to work with Iran due to the estrangement with the Biden administration and the lack of support that Saudi Arabia receives from it and from the Democrats in the U.S. Congress, as reported by The Hill on March 13, 2023.

The researcher suggested that Saudi Arabia was disturbed by Washington’s weak reaction to the news that Iran had reached a level of enrichment of uranium just below 84%, a level very close to the level of making a nuclear bomb. He asked, “So what happened to the White House’s promises not to allow Iran to build a nuclear bomb?”

He pointed out that the Saudi response, days before the return of relations with Iran, was to take similar steps if Tehran showed that it had a nuclear bomb or that it could manufacture one, but now Riyadh’s view appears to have reversed, as the kingdom has shown a willingness to withdraw from confrontation with Iran.

 

New Era

The Middle East region may witness major changes during the next stage, in light of the rapprochement between Saudi Arabia and Iran, as the latter seeks to build a new regional security framework under Chinese supervision, according to an analysis published by Foreign Affairs magazine on March 22, 2023.

The analysis also stated that this rapprochement would lead to the replacement of the current Arab–Iranian division with a complex network of relations, within China’s global ambitions.

It is noteworthy that the United States had encouraged Saudi Arabia and Iran in 2021 to start talks in an attempt to reduce tensions between the two regional rivals and advance negotiations to revive the nuclear agreement between Iran and international powers, in addition to ending the conflict in Yemen.

However, during his visit to Saudi Arabia in July 2022, the U.S. president urged the Gulf Cooperation Council to join Israel’s efforts to contain Iran, but Saudi Arabia turned to China instead, as Riyadh viewed President Xi Jinping as a better mediator with Tehran, the analysis said.

According to the same analysis, the Saudis believe that engaging China is the surest guarantee that the deal with Iran will continue, as Tehran is unlikely to risk jeopardizing its relations with Beijing by violating such a deal.

Xi had discussed the issue with bin Salman during his visit to Riyadh in December 2022, and then Xi met with Iranian President Ebrahim Raisi in Beijing in February 2023.

This was followed by intense discussions between Iran and Saudi Arabia, during which the two sides agreed to bury hatred and normalize relations, according to the magazine.

For both countries, Xi’s intervention was crucial, as both have long-standing political and economic ties with Beijing, and thus the Chinese president was able to act as a trusted mediator between them.

Beijing is Riyadh’s largest trading partner, with bilateral trade worth $87.3 billion in 2021, according to Reuters. China is also almost the only partner of Iran, and its main oil buyer, by a large margin from any other country due to U.S. sanctions.

The new agreement calls for the strengthening of economic and diplomatic relations between Iran and the GCC countries and the start of discussions on building a new regional security framework, while China will continue to supervise all these steps, which may indicate a new regime in the region, according to Foreign Affairs.

Tehran welcomes China’s growing role in the Middle East because it weakens U.S. influence in the region and undermines the Washington-led sanctions regime that has crippled the Iranian economy.

As for Saudi Arabia, the deal led by Beijing constitutes a bolder strategic shift, as relations between Riyadh and Washington are at their lowest levels.

Riyadh believes that the United States, which has been its staunch ally, is focusing on other priorities, and does not believe that Washington has a clear plan for regional security in the wake of the stalled nuclear talks with Iran.

The magazine’s analysis says that Saudi leaders are not satisfied with the current leadership in Washington, as they see that President Biden has been slow to repair relations with Riyadh after he pledged as a candidate to treat the Saudi regime as an outcast, after the killing of journalist Jamal Khashoggi in 2018.

 

Shanghai and BRICS

In a new step that brings it closer to the camp of China and Russia and distances it from its U.S. ally, Saudi Arabia agreed on March 28, 2023, to join the Shanghai Cooperation Organization (SCO) as a dialogue partner.

The kingdom had already signed a memorandum of understanding on September 16, 2022, granting it the status of SCO dialogue partner, as was reported by OilPrice.com at the time. However, Saudi Arabia did nothing to encourage the release of the news at that point, unlike now—just after it resumed relations with Iran in a deal brokered by China.

Washington is cautiously watching China’s strengthening of its influence and partnership with its largest ally in the Gulf region, although it has played down the importance of Saudi Arabia’s accession to the SCO, which is considered one of the bodies led by Beijing and Moscow to break Western hegemony politically, economically, security, and culturally.

The SCO, which was founded in 2001, includes, in addition to China and Russia, four countries from Central Asia (Kazakhstan, Tajikistan, Uzbekistan, and Kyrgyzstan), and India and Pakistan joined it in 2017, and finally Iran in September 2022; it also includes dialogue partners: Turkiye, Qatar, Egypt, Armenia, Azerbaijan, Cambodia, Nepal, and Sri Lanka.

According to analysts, Saudi Arabia and Iran are seeking to join the BRICS countries, which include Brazil, Russia, India, China, and South Africa, noting that the GDP of this group ($51.49 trillion) exceeds the GDP of the Group of Seven countries ($49.37 trillion), which includes Britain, the United States, Canada, France, Germany, Italy, and Japan.

The BRICS countries are much larger in terms of land area and population than the G7 countries. Three of the group’s countries have nuclear warheads, namely Russia, China, and India, while Moscow and Beijing are permanent members of the Security Council.

In turn, political analyst Tayseer al-Khatib explained in a statement to Al-Estiklal that “the Saudi–Iranian agreement is a qualitative shift at the level of regional and international alliances.”

He added, “The success of the agreement, despite the challenges it faces, will be reflected in one way or another on the regional equation and on the form of relations between the countries of the Middle East, and its extensions will extend to the international dimension, specifically, the United States, China, and Russia, especially with the resumption of relations at such a time.”

“Saudi Arabia is trying, through rapprochement with Iran, to put pressure on the Biden administration to review its relations and soften its positions towards Crown Prince Mohammed bin Salman, similar to previous positions refusing to raise oil production with the beginning of the Ukrainian–Russian war,” he said.

Mr. al-Khatib added, “Saudi Arabia has recently sought to diversify its strategic options in light of an international environment that seems to be moving towards multipolarity, especially after the Ukraine war and the deepening of the Sino–Russian partnership, and both countries do not hide their desire to change the rules of the existing international order.”

The political analyst concluded, “The Saudi–Iranian agreement strengthens the anti-American front, not only at the regional level but also internationally.”