The Iran and Saudi Arabia proxy conflict, usually referred to as a Middle Eastern Cold War, was a struggle for influence in the Middle East. Iran and Saudi Arabia have had a long history of rivalry and have remained regional rivals for three decades. Tensions between the two Muslim countries date back to the 1979 Iranian revolution. After that, Saudi Arabia supported Iraq in the Iran-Iraq war, which gave rise to rivalry between the neighbors. Both countries have engaged in dialogues multiple times in order to restore bilateral relations, but they have failed in the past. There are many causes of conflict, with sectarianism being one of the main reasons for the tensions between both countries. Additionally, both countries have huge oil reserves and are major oil exporters, which has led to clashes over exporting policies. Saudi Arabia, with larger oil reserves and a smaller population, focuses on the long-term view of the global oil market with low and moderate prices, whereas Iran focuses on the short-term view with high prices due to its lower standard of living, partly caused by US-imposed sanctions.
Recently, there has been a development in bilateral relations between Iran and Saudi Arabia, indicating a crack in the wall between the two old Muslim rivals. Both countries have announced the restoration of bilateral ties, facilitated by China, which has brokered a deal to resolve their conflicts. This agreement holds great importance for Iran’s government, as it faced several challenges in early 2023, including increasing isolation for its human rights records, sanctions imposed on its controversial nuclear program, and support of Russia in the Ukraine war. Thus, the deal can be seen as a diplomatic victory for Tehran.
The agreement also demonstrates Iran’s intention to reduce tensions across the Middle East with Saudi Arabia and opens the path for economic growth for both nations. Following the announcement of the agreement, the Iranian currency gained value against the US dollar, recovering almost half of its value lost after nationwide protests over the extrajudicial killing of Mahsa Amini.
The restoration of ties between Saudi Arabia and Iran, mediated by China, is a win for both countries and the Middle East as a whole. However, it is crucial for Saudi Arabia to adopt a new approach in dealing with Tehran, putting an end to its military intervention in Yemen and stopping attacks from groups backed by Iran. A more positive approach, like its “vision 2030,” should be taken to engage Iran in dialogues for regional development.
China’s role as a mediator between Saudi Arabia and Iran is also a welcoming step, providing assistance to both countries in terms of technology and other resources they may need. The United States has also welcomed the agreement between Riyadh and Tehran, considering it an important development in the Middle East. However, the US has some reservations over Iran’s commitment due to the US-Iran rivalry.
This deal has the potential to bring together major regional powers, including China, Pakistan, Saudi Arabia, and Iran, forming a new quad alliance. This forum can be utilized to cooperate on geopolitical and geo-economic fronts. Pakistan has the opportunity to gain support and security cover from India through this platform, while Iran can find similar support for the threat it faces from Israel.
Regardless of the interests and intentions behind this agreement, it is heartening to see both countries at the table working towards stability in the region and restoring bilateral ties. Now, the focus must shift to the outcomes of this deal, with the aim of reducing tensions between the two Muslim countries and establishing an acceptable security order for the region.