With China Mediating Between Saudi Arabia and Iran: Is U.S. Influence in the Gulf Waning?

Saudi Arabia and Iran have announced the restoration of diplomatic ties that were cut off since 2016, with China playing a significant role in bringing the two rivals together

According to a statement released by the Saudi Press Agency (SPA) and the official Iranian news agency IRNA, both countries have agreed to resume diplomatic relations and reopen their embassies and representations within two months.

The move to restore diplomatic ties comes at a time when both countries are seeking to assert their dominance in the region.

The warming of relations could lead to greater cooperation on issues such as oil production and may also have implications for regional conflicts such as the war in Yemen.

However, it remains to be seen whether this agreement will lead to lasting peace between the two nations or whether tensions will continue to simmer beneath the surface.

 

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The mediation by China, which played a key role in bringing the two sides together, has also elevated the country’s status in the region, potentially even rivaling the U.S. as a major player in the Gulf region.

As part of the agreement, both countries have agreed to activate a security cooperation agreement signed in 2001, which includes commitments to mutual respect and non-interference in each other’s internal affairs.

Announced on March 10 in a joint statement, the agreement also includes the resumption of diplomatic relations and the reopening of embassies, which have been closed since 2016.

The recent agreement between Saudi Arabia and Iran goes beyond just restoring diplomatic ties, as it also includes economic cooperation.

Specifically, the General Agreement on Cooperation in the field of economy, trade, investment, technology and science, as well as culture, sports and youth, signed in 1998, will be activated.

This move aims not only to restore diplomatic relations but also to establish a broader partnership between the two countries in various fields, including diplomatic, security, and economic spheres.

Such cooperation could contribute to reducing international polarization between Saudi and Iranian supporters in the Arab region and help resolve crises in Yemen, Lebanon, and Syria to some extent.

However, it is too early to speak of a strategic partnership between the two countries given the complex and contentious issues between them. Building trust will require additional steps to be taken.

 

U.S. & ‘Israel’

Following the announcement of the Saudi–Iranian agreement, the Israeli opposition has criticized the Netanyahu government, labeling the deal a “complete failure and danger to the Israeli government’s foreign policy.”

The Israeli government’s inability to bring Saudi Arabia into the 2020 Abraham Accords, which normalized relations with the UAE and Bahrain, is seen as a missed opportunity to establish a regional coalition against Iran’s nuclear program, which “Israel” views as a direct threat.

“Israel” has long sought to create a coalition with its neighbors against Iran, and the inclusion of Saudi Arabia in the Abraham Accords was seen as a significant step towards achieving this goal.

However, the failure to secure Riyadh’s participation has been viewed as a setback for Israeli foreign policy objectives in the region.

While the U.S. administration has cautiously welcomed the Saudi–Iranian deal, it has also expressed skepticism regarding Iran’s commitment to de-escalation.

The U.S. has previously been critical of Iran’s actions in the region, particularly with regard to its nuclear program.

Political researcher Eslam Abdelhamid said to Al-Estiklal that the recent Saudi–Iranian agreement is expected to have significant consequences for the United States, as it weakens their ability to protect Saudi Arabia from the perceived threat posed by Iran.

“Additionally, The agreement may lead to other Arab countries, such as the UAE, Bahrain, Sudan, Morocco, Somalia, and Djibouti, resuming diplomatic relations with Tehran, further undermining the American cordon around Iran,” he added.

“This deal also potentially freezes any potential plans to normalize relations between Saudi Arabia and Israel, which could have further implications for regional stability,” he noted.

“These developments come at a time when Iran’s nuclear program is said to be approaching a critical threshold, and therefore, this agreement is not in the interest of any U.S. efforts to tighten sanctions on Tehran or for Israel’s threats to strike the Iranian nuclear project,” he said.

On considering this deal a win for Ira, Abdelhamid said that although the agreement appears to be as such, there are still significant challenges to overcome, and it remains to be seen whether it will endure.

“But regardless, this shift in regional dynamics also marks a moment of great change, with the United States finding itself on the sidelines and China emerging as a new powerful player in the region.”

“While Americans have long been the central actors in the Middle East, Israel, which had been courting Saudi Arabia as an ally against their mutual adversary in Tehran, now feels they have lost Riyadh to the Iranians,” he concluded.

 

Biggest Loser

Saudi Arabia has a strong interest in avoiding being caught in the middle of any potential conflict between the U.S. and “Israel” against Iran, as it would suffer the most.

The country has reduced its military spending for 2022 despite high oil revenues, indicating a shift towards focusing on its Vision 2030 plan and strengthening its economic position globally.

If China can convince both Saudi Arabia and Iran to trade with its currency, the yuan, it could deal a significant blow to the U.S. dollar as a global reserve currency.

This could lead to a decline in the dollar’s trading volume against other currencies, paving the way for a multipolar world.

The U.S. may seek to thwart the Saudi–Iranian agreement and exploit their many points of contention, potentially by pressuring Riyadh to withdraw from the deal or offering inducements to strengthen alliances.

Only a few days before the announcement of the Saudi–Iranian deal, Riyadh criticized the nuclear deal with Iran, calling for neighboring countries’ concerns to be addressed.

Resuming diplomatic relations does not mean that Saudi Arabia is no longer concerned about Iran’s nuclear weapons. However, the deal sends a significant message to the United States.

The resumption of diplomatic ties between Saudi Arabia and Iran, mediated by China, could be a game-changer in the Middle East.

While this appears to be a victory for Iran, the agreement will need to stand the test of time as the two sides navigate many challenges and deep differences.

It also sidelines the United States, which has been a central player in the region for three-quarters of a century, giving China an opportunity to become a powerful new player.