Understanding the Saudi-Iran detente

 Source: The post is based on an article “Understanding the Saudi-Iran detente” published in The Hindu on 14^thMarch 2023.

Syllabus: GS 2 –International Relations

Relevance: Agreement betweenSaudi Arabia and Iran

News:Saudi Arabia and Iran, two of West Asia’s major powers, have agreed to restore diplomatic relations in an agreement brokered by China.

What were the reasons behind the breakdown in relation between Saudi Arabia and Iran?

The reasons were – regional dominance, Iran turning into Shia theocratic republic, ideological differences, etc.

Further, their relations collapsed in 2016 after the Saudi embassy in Tehran was overrun by protesters following Riyadh’s execution of a revered Shia cleric.

However, under China’s mediation, they have agreed to start a new beginning.

What are the terms of the agreement?

Read – The China hand in Saudi-Iran diplomacy

According to reports, Iran has agreed to prevent further attacks against Saudi Arabia, especially those from the Houthi-controlled parts of Yemen.

Saudi Arabia has agreed to regulate Iran International, a Farsi news channel that is critical of the Iranian regime.

China is also planning to host a cross-Gulf conference of Iran and the six Gulf monarchies (Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait and Oman), who make up the Gulf Cooperation Council (GCC), this year to further strengthen peace in the region.

Why did Saudi Arabia reach out to Iran?

U.S.’s deprioritisation policy for West Asia.

The US now faces greater foreign policy challenges such as the Russian war in Ukraine and China’s rise in the Indo-Pacific. Hence, this has created a power vacuum in the West Asian region to counter Iran.

Therefore, to address the vacuum created, the US and its allies wanted to bring Israel and the Arab world together against Iran.

Further, relations between Saudi Arabia and the U.S. have not been good in the recent years. The U.S. is now one of the top oil producers in the world and is not as dependent on the Gulf as during the Cold War.

Hence, Saudis decided to look for alternative solutions for the Iran problem. i.e., they came up with a way to reach out to the Iranians.

What led Iran to accept the deal?

Iran is facing one of the toughest phases of economic isolation and domestic pressure. Its economy is deteriorating, and its currency (the rial) is struggling.

Looking at the condition of Iran, China allowed Iran to withdraw parts of the $20 billion funds that were frozen with Chinese banks after the U.S. sanctions.

Hence, Iran thought in such a struggling economic scenario, it would be better to have a deal with Saudi Arabia, under China’s mediation.

Strategically, Iran also knows that such a deal could complicate American efforts to unite Arab countries and Israel against it.

What does China gain from the deal?

China has economic, regional and strategic interests in playing the role of a peace broker in West Asia. China is the world’s largest oil buyer and stability in the energy market is essential for its continued rise.

Further, China’s ties with Saudi Arabia and Iran are good unlike the US. China is a leading buyer of Saudi oil and the largest trading partner of Iran. 

Therefore, this agreement marks China’s arrival as a major power in West Asia.

Therefore, presence of China and absence of US in the Saudi-Iran reconciliationpoints to larger changes in the global order.

However, there are also risks associated with the deal because West Asian region is prone to conflicts. If the agreement between the Saudi-Iran doesn’t work, it could lead to a bad impression of China globally.

How does the U.S. look at the deal?

U.S. officials have welcomed the reconciliation because peace it would help to stabilise the region and benefit the global energy market.

However, there are also strategic concerns with because the US sees an ally (Saudi Arabia) making friends with its rival (Iran) and its global challenger (China) deepening its influence in a region which the U.S. had dominated since the Suez War of 1956.

There has been a presence of the US in major peace initiatives in the region in the post-War world. For example, Middle East Quartet (2002) or the Abraham Accords (2020).