The Iran-Saudi Arabia Agreement: Background, Considerations, and Significances

By: Roy Cahanovitz

The background of the agreement

In recent weeks, headlines have focused on Iran and Saudi Arabia reconciling their differences and striking an agreement thanks to unexpected mediation from China (this, as well as China’s interests in the area, will be unfolded in a separate sub-chapter). After Saudi Arabia executed Shiite cleric Nimr al-Nimr, a vocal critic of the Saudi royal family, relations between the two countries deteriorated and ran aground in 2016. The death of al-Nimr provoked enormous public outcry in Iran in the days that followed, triggering attacks on Saudi diplomatic posts and the collapse of relations between the two countries. Furthermore, the conflict between the two countries reached a climax in 2019 when Iran used UVAs (unmanned aerial vehicles) and missiles to attack Saudi Arabia’s Aramco oil refineries. This attack appears to have accelerated the Saudi royal family’s realization that it must consolidate, expand, and strengthen its global bases of support rather than rely solely on the American administration, which demonstrated in this case that it had abandoned the Saudis to deal alone with and against Iran.

Furthermore, the rivalry between Iran and Saudi Arabia is based on two primary factors: religious and political. Iran and Saudi Arabia represent two distinct sides of the broad Islamic spectrum in terms of religion (and nationality – Persians against Arabs): one Shiite (Iran) and the other Sunni – Wahhabi (Saudi Arabia). This is the point at which it is worth noting that Wahhabi ideology and identity have long claimed that Shi’ites are infidels since their belief in the 12 imams seriously and considerably undermines God’s (Allah’s) uniqueness. On the other hand, Shiites in Iran have acquired fear and hatred towards Saudi Wahhabis, even assigning Jewish origin to them.[1]

Iran had the greatest revolution in its history in 1979, which completely transformed its face, following Khomeini, the revolution called for the spread of Islamic ideology throughout the Arab and Islamic world. Khomeini also urged the citizens of Saudi Arabia and Iraq to fight to depose their corrupt governments and install “real” Islamic regimes, such as the one established in Iran. In response to this and to cement his position within the Islamic world, Saudi Arabia’s King named himself “the protector of the two holy places” (Mecca and Medina). During the Hajj, the Iranian dictatorship continued to act, strive, and notably annoy the Saudi king by working to disseminate Shi’ite religious messages among the pilgrims who were in Saudi Arabia at the time. Furthermore, in June 2009, Iran witnessed massive protests in response to the presidential election fraud (Ahmadinejad’s election over Mir-Hossein Mousavi).[2] Some consider these events, dubbed “Iran’s green summer,” to be the catalyst for the outbreak of the “Arab Spring” six months later, in January 2010. During the Arab Spring, Iran stood at the forefront of the Shi’ite world, holding Saudi Arabia accountable for the massacre of Shi’ites in Iraq and other Middle Eastern nations, which, in addition to the previously mentioned events, resulted in the severing of relations in 2016.

On a political level, Iran and Saudi Arabia are the two largest countries in the region and are positioned on the Gulf’s shores; as such, they naturally view themselves as region leaders. Iran, which cannot supply Arabism to the peoples of the region (because it is Persian), seeks to present them with a robust and bold embrace of Islam. Saudi Arabia has labored relentlessly, particularly after 1967, to establish itself as a major regional player. It is vital to remember that the American invasion of Iraq in 2003 aided the Islamic Republic of Iran on the one hand by helping to bring down its most significant rival at the time, Saddam Hussein (leader of the secular Arab Baath Party), and on the other, it allowed it to extend its patronage and religious power to the Shiite community living in Iraq. As a result, Iran attempted to turn Iraq into a client state and even boycotted the new Iraqi regime. Since 2005, Iran has worked to establish an axis of resistance (strategic-economic alignment) that includes Iran, Syria (Assad’s), Hezbollah in Lebanon, and Palestinian Hamas and Islamic Jihad organizations in the Gaza Strip and the West Bank, all aimed against the US and Israel.

Another significant development in this context is the onset of civil war in Syria. Iran, too, played a significant role in vehemently protecting Assad Jr.’s dictatorship. The Saudis, for their part, aided Sunni groups operating in Syria, but not with the same zeal and sophistication as the Iranians.

The considerations for signing the agreement

The deal recently signed (March 10, 2023) is the culmination of multiple earlier rounds of talks between the two countries over the past two years, and through Omani and Iraqi mediation. Needless to say, both Iran and Saudi Arabia signed this pact for a number of reasons and motivations. From Iran’s perspective, the choice to reestablish relations with Saudi Arabia was self-evident. It is no secret that Iran has suffered and continues to suffer from a deterioration in its economic condition, high inflation rates, a fall in the value of the local currency, and other factors since Donald Trump’s withdrawal from the nuclear agreement (in May 2018). All of these and other issues, too numerous to enumerate, have contributed to widespread protests in the country since 2019. In any case, Iran came to this agreement from a position of strength and accomplishment because its economy did not collapse completely (as the West had hoped), and, more importantly, it was able to leverage its nuclear program significantly and beyond recognition, to the point where intelligence organizations around the world are unanimous about Iran’s ability to reach a uranium enrichment level of 90% in a very short period of time.

From the Saudi point of view, the range of considerations is also wide. Saudi Arabia recognized that their confrontational strategy with Iran had failed. First and foremost, Saudi Arabia needed to halt its war in Yemen against the Houthis,[3] who are backed by Iran, as well as the direct strikes against it, such as the September 2019 UAV and missile attack on Aramco installations in Abqaiq Khurais. This strike lowered Saudi Arabia’s oil production capacity by around 50% for several weeks, significantly decreasing the country’s oil profits. Furthermore, Iran’s attack demonstrated, more than anything else, its military and intelligence capabilities, and if it wishes to harm Saudi Arabia, it can easily do so.

“A superpower rises, and another superpower falls”: the involvement of China and the United States

China, “the rising superpower”

Undoubtedly, China is the surprise actor regarding this agreement, having worked hard to mediate between the two countries through meetings of high officials in the Chinese capital. To begin, the deterioration of relations between Saudi Arabia and the United States has caused the former to recognize the importance of improving diplomatic relations with China, which is currently regarded as a “rising superpower,” thereby expanding its global maneuvering capabilities. Furthermore, China, under President Xi Jinping, relies on oil from both Saudi Arabia and Iran, and has recently become their largest consumer. Furthermore, in light of China’s desire to strengthen its strategy in the Gulf region, it is working to bring regional stability, which will also strengthen its position on the world’s hegemonic chessboard. Above all, China has a large and significant advantage over the United States. That advantage is that it enjoys sympathy even among Iranians, who, in light of recent events, naturally despise the US and its leaders.

According to the Saudis, China’s participation in the agreement will help restrict Iran at the regional level, given that Iran will fear losing its little credibility, which might lead to the dissolution of relations with China as a whole. For Iran, Chinese involvement will undermine the dominant position of the United States, its number one adversary, and hence may signal the end of the American era in the entire Gulf.

The United States – “the Descending Superpower”

Perhaps more than anything else, the agreement represents the United States’ declining status in the Gulf region and the Middle East. It should be mentioned that with the demise of the Soviet Union in the early 1990s, the United States dominated the region for many years. Changes in the strategic environment and the oil economy, as well as global processes, have prompted Americans to turn a blind eye to other parts of the world. Furthermore, China’s technological rise over the last two decades, particularly in the latter, has posed a challenge to the US’s capabilities. This is in addition to the Russia-Ukraine war (which has been ongoing since February 2022), which has prompted the US administration to diminish its presence in the Middle East and shift its focus to other, no less hazardous theaters.

Another example of the United States’ weakness can be found in its failures in Afghanistan and Iraq during the last two decades. These failures resonated intensely in the ears of the American people, let alone the American political system as a whole. The financial impact of the United States’ belligerent involvement in Asia and the Middle East was approximately $ 3 trillion, with thousands of people killed and tens of thousands injured. The September 11 attacks also strained relations between the United States and Saudi Arabia. As soon as it came to light that 11 of the 17 terrorists were Saudi citizens, the US took action to accuse the Saudi royal family, particularly emphasizing that the Saudi education system was encouraging deliberate assaults on the US. Add to it the assassination of Jamal Khashoggi, a Saudi journalist with American citizenship, by Saudi officials in October 2018, inflaming the already strained relations.

In any case, Saudi Arabia’s apparent conclusion is that it cannot rely solely on the United States for safe and loyal support for its existence and empowerment, and that it must act for the sake of its national well-being. Simultaneously, Saudi Arabia has signaled to the US that it has no intention of completely abandoning relations with it by purchasing 78 Boeing airplanes for the purpose of establishing a new airline, which it intends to launch soon.

Finally, Washington officially welcomed the resumption of relations between Saudi Arabia and Iran, and it was even claimed that Riyadh had kept the administration up to date on the situation. It should be highlighted that the very revival of relations between the two Gulf nations supports American interests, which call for lowering tensions in the Gulf and possibly even renewing the nuclear agreement in the future. Only time will tell.

In the photo: a cartoon by Fahed Al-Khamisi, the in-house cartoonist of the Saudi economic newspaper, Al-Iqtsadiah. In the cartoon you can see that “Uncle Sam” (symbolizing the USA) has run out of fabric for the small American flag compared to the amount of fabric for the large Chinese flag (from Noam Bannett’s Twitter)

Epilogue: the implications for Israel and the region.

Israel is a significant player in the Middle East, with military superiority, nonetheless, this does not say anything about its hegemonic position. As a result, even if Saudi Arabia and the Gulf states attempted to use Israel to establish a deterrent front against Iran, the level of support in Israel in the event of an Iranian conflict would always be limited. The Arab Gulf countries’ knowledge of Israel’s power restrictions, as well as Israel’s own priorities when it comes to providing them with a defense umbrella against Iran in the event of an actual military battle, has undoubtedly dimmed Israel’s attraction. At the same time, Iran’s accelerated nuclear program, worries about America’s commitment to supporting the Gulf states, and other reasons may have seriously undermined Israeli interests in the Gulf states, diminishing the Gulf states’ desire to serve as a platform against Iran. Furthermore, it can be assumed that warming relations with the various Gulf states will enable the Iranian regime to concentrate its power on expanding the confrontation with Israel and its representatives around the world. Quiet in one arena may generate prosperity, but not always in a beneficial way to another arena, no less essential to Iran.

In terms of Israel, the Abraham Accords are not void since Israel will continue to support the Gulf states as a balancing force and a lever of power restraining Iran. Furthermore, the thawing of relations between Saudi Arabia and Iran will not eliminate historical tensions between them in one fell swoop, and history shows that suspicion between them will likely persist indefinitely. It is true to claim that restoring relations between Saudi Arabia and Iran does not prevent Saudi Arabia from normalizing relations with Israel.

The Middle East is a vibrant and surprising arena, teeming with geopolitical and economic interests, and as such, it shifts from day to day and from minute to minute. It is important to note that Iran is on the cusp of a profound transformation in the final years of Supreme Leader Ali Khamenei’s presidency. His death could foreshadow future moves and developments.

[1] Read more about the religious rivalry between Iran and Saudi Arabia: Meir Litvak, Know Thy Enemy: Evolving Attitudes towards “Others” in Modern Shiʻi Thought and Practice. Brill, 2021.

[2] The protesters’ slogan was: “Where is my vote?” in recognition of the fact that the votes cast in favor of Mousavi, the reform candidate, were not counted.

[3] The Houthis belong to the fifth branch of Shi’ite Islam (Zaydis) and account for roughly 30% of Yemen’s population; thus, Iran supports them economically, militarily, and intelligence-wise, using them as an instrument to attack the Saudi dictatorship indirectly.

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