A New Order in the Middle East?
Maria Fantappie and Vali Nasr Author:Brad W. Setser Author:Ebenezer Obadare Author:Elliott Abrams Maria Fantappie Vali Nasr
Iran and Saudi Arabia’s rapprochement could transform the region.
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Foreign Affairs
On March 6, 2023, representatives from Iran and Saudi Arabia met in Beijing for discussions brokered by China. Four days later, Riyadh and Tehran announced that they had decided to normalize relations. This landmark agreement has the potential to transform the Middle East by realigning its major powers, replacing the current Arab-Iranian divide with a complex web of relationships, and weaving the region into China’s global ambitions. For Beijing, the announcement was a great leap forward in its rivalry with Washington.

It was not supposed to be this way. It was the United States that had encouraged Iran and Saudi Arabia to start discussions, in 2021, in an effort to reduce tensions between the Gulf rivals, advance nuclear talks, and bring an end to the conflict in Yemen. Tehran and Riyadh held five rounds of direct talks, and informal conversations continued thereafter. Then, during his visit to Saudi Arabia in July 2022, U.S. President Joe Biden urged the Gulf Cooperation Council (GCC)—an intergovernmental union of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—to join with Israel to contain Iran. But the Saudi government turned to China instead, viewing President Xi Jinping as a better mediator with Tehran. Involving China, the Saudis believed, was the surest guarantee that a deal with Iran would last, since Tehran would be unlikely to risk jeopardizing its relations with Beijing by violating such a deal. Xi discussed the issue with Saudi Crown Prince Mohammed bin Salman during his visit to Riyadh in December 2022 and then met with Iranian President Ebrahim Raisi in Beijing in February 2023. Intense discussions between Iran and Saudi Arabia followed, during which the two sides agreed to bury the hatchet and normalize relations. For both countries, Xi’s personal intervention was critical. Both have long-standing political and economic ties with Beijing, and the Chinese president was, therefore, able to act as a trusted broker between them.

If the deal is fully implemented, Tehran and Riyadh will be closely aligned once more. It was only in 2016 that diplomatic ties between the countries were severed, after a mob torched the Saudi embassy in Tehran. Now, according to the new agreement, both sides will reopen embassies, and the Saudi government will end its support for the Iran International television channel that Tehran holds responsible for domestic dissent. Both sides will uphold the April 2022 cease-fire in Yemen and begin work on a formal peace agreement to end the civil war in that country. Iran will cease supplying Houthi rebels with arms and persuade them to halt their missile attacks on Saudi Arabia. In addition, the deal calls for enhanced economic and diplomatic ties between Iran and the GCC countries, and for Iran and its Arab partners to begin discussions on building a new regional security framework. Moreover, China will continue to oversee all of these steps.

The Iranian-Saudi deal has the potential to end one of the region’s most significant rivalries and extend economic ties across the Gulf. No longer will Iran stand alone to confront an alliance of Arabs and Israelis, which the United States hoped would do the difficult job of containing it. Instead, the deal has the potential to bring Iran closer to its Arab neighbors and gradually stabilize its relations in the region. Underscoring this promise, the Saudi finance minister, Mohammed al-Jadaan, has pledged that, if all goes to plan, Saudi Arabia is ready to invest in Iran’s economy. Raisi has already accepted an invitation to visit Riyadh at an unspecified date, in a further sign of both sides’ intention to strengthen ties. The consequences for the region of such a rapidly developing relationship may be profound.

TEHRAN LOOKS EAST

Both Tehran and Riyadh believe that they will benefit from working through China to restore regional ties. For both countries, working with Beijing is a new development. In 2015, Iran’s priority was improving relations with the United States and Europe. It viewed negotiations with its neighbors as secondary. The result was the Joint Comprehensive Plan of Action (JCPOA)—the nuclear deal with the United States and its fellow permanent members of the UN Security Council, plus Germany—which curtailed Iran’s nuclear program in exchange for sanctions relief. After U.S. President Donald Trump withdrew American support for the JCPOA in 2018, Saudi Arabia and the GCC drifted closer to Israel, a move that was accelerated by an Iranian attack on Saudi oil facilities in 2019. Iran in turn then changed its focus, giving new emphasis to improving relations with its neighbors and to regional trade. To that end, Tehran reestablished full diplomatic ties with Kuwait and the UAE in 2022. But the Beijing deal with the Saudis is the larger prize Iran has sought—a true opening to the Arab world, which could soon be extended to Bahrain and Egypt.

Tehran welcomes China’s deepening role in the Middle East because it weakens U.S. influence in the region and undermines the U.S.-led sanctions regime that has crippled Iran’s economy. To that end, better ties with GCC countries will lessen the threat posed by the Trump administration–brokered Abraham Accords, which initiated closer intelligence and military coordination between Israel, Saudi Arabia, and the UAE (and later extended to Morocco and Sudan), thereby extending the shadow war between Iran and Israel to the Gulf. Although Tehran might be willing to accept bilateral ties between the GCC and Israel, it could not tolerate a U.S.-backed Arab-Israeli military alliance against it. Such an alliance would be all the more threatening to Tehran in the aftermath of failed nuclear talks with the Biden administration, domestic political protests, a growing Israeli presence in Azerbaijan and Iraq, and an increasing willingness by Israel’s new right-wing government to contemplate war in order to stop Iran’s nuclear program.

RIYADH’S BALANCING ACT

For Saudi Arabia, the Beijing-led agreement constitutes a more audacious strategic shift. Relations between Riyadh and Washington are at a historic low. Saudi Arabian satisfaction with U.S. policy in the region has been declining since the 2003 invasion of Iraq. Riyadh was unhappy with the dismantling of Iraq’s government, troubled by the nuclear deal, angry with U.S. unwillingness to support Saudi Arabian interests against Iran in Syria and Yemen, and concerned by its failure to defend the kingdom when its oil facilities were attacked by Iran in 2019. Riyadh believes that the United States—once its stalwart ally—is focused on other priorities, and it does not believe that Washington has a clear plan for regional security in the wake of the stalled nuclear talks with Iran. Saudi leaders are also dissatisfied with the current leadership in Washington. Biden was slow to repair relations after pledging as a candidate to treat the regime as a “pariah,” following the murder of the journalist Jamal Khashoggi in 2018.

Lacking the advanced military capabilities of its larger and more aggressive neighbors, Saudi Arabia has always been obsessed with its own defense. Reducing tensions with Tehran will not end these concerns, but it buys Riyadh more time to shore up its security and diversify its strategic options. The desire for security led Saudi Arabia to seek ties with Israel over the past decade, and the same desire is now motivating its cultivation of China. Saudi Arabia’s strategy is intended to guarantee its security. By assembling a broad network of partners, including China, Israel, and the United States and by improving relations with adversaries such as Iran, Syria, and Turkey, the Saudi regime hopes to shore up its long-term stability.

Riyadh is showing that if U.S. policy does not serve Saudi interests, then the Saudis will not be beholden to the alliance.

Saudi Arabia has set the ambitious goal of becoming an advanced industrial economy, as well as a cultural and tourism hub, by 2030. Achieving this will require U.S. military support, Israeli security and technology, trade with Europe and China, and domestic stability. The Saudi strategy is at odds with Washington’s conception of regional security, which favors isolating Iran and does not rule out war, though there is no clear U.S. plan to manage it. The United States has also struggled to recognize that it cannot claim that nothing has changed in its commitments to its Middle Eastern partners while also making clear that it is pivoting away from the region. In effect, Riyadh is showing that if U.S. policy does not serve Saudi interests, then the Saudis will not be beholden to the alliance.

Washington has also been slow to realize that Saudi Arabia sees itself not as a security vassal of the United States but as a regional power capable of playing an independent role in world politics. Riyadh believes that the old paradigm of “U.S. security in exchange for low oil prices”—as one Saudi official put it—is dead. Saudi Arabia’s vision of strategic autonomy is not simply a reaction to diminishing U.S. engagement in the Middle East but a statement of the kingdom’s ambitions. Riyadh wants close and independent ties with the United States, as well as with Russia and China. It also sees itself as playing a crucial role in the region, balancing Egypt, Iran, Israel, and Turkey to protect its own security and wield regional influence. To hold that coveted position, Saudi Arabia must nurture relations with all its neighbors. In 2022, Riyadh restored ties with Turkey; now it is doing the same with Iran. Next it will be Israel’s turn. Relations with Iran will give the Saudis much-needed political cover with their allies, meaning that a deal with Israel can be presented as a bilateral agreement, rather than a military axis against another Muslim country. The Beijing deal both affirms Riyadh’s view of its status in the Middle East and demonstrates its strategic autonomy.

SILK ROAD SECURITY

China’s involvement is perhaps the most troubling dimension of the Iranian-Saudi rapprochement. Beijing had previously been careful to avoid entanglement in the Middle East. But its burgeoning economic interests there have necessitated taking on a diplomatic role, as well. The region is important to China’s Belt and Road Initiative; the Chinese government has needed to ensure, for example, that its investments in the Saudi energy sector are not threatened by Houthi missiles. Moreover, China has been steadily expanding its economic footprint in Iran, and it is interested in supporting Moscow’s plan to develop a transit corridor through Iran that would allow Russian trade to reach global markets without using the Suez Canal. The development of this corridor would also allow China to circumvent the Strait of Malacca in the face of the formidable armada that the United States and its allies are building. To advance these strategic priorities, Beijing is now preparing to challenge Washington for influence in the Middle East.

The convergence of the broader strategic interests of China, Iran, and Saudi Arabia suggests that Beijing’s breakthrough with Iran and Saudi Arabia is likely to serve as the foundation of a new geopolitical reality in the Middle East. This transformation presents a historic challenge for the United States. No longer can Washington simply demand that its Arab allies decouple from China and unite behind its leadership to combat Iran. That approach is out of date and out of step with its allies’ current needs. As one Saudi official put it, “The United States fails to understand that we cannot be allies at the expenses of our interests.” Saudis do not see their interests served by either war with Iran or confrontation with China.

What happened in Beijing by no means lessens the threat posed by Iran’s nuclear and regional policies. In the short run, however, Washington should welcome the lowering of tensions in the Middle East, which enables the United States to focus on other global priorities without the pretense of a steadfast commitment to the region. The United States should also encourage Saudi Arabia and the GCC to explore a broader regional security architecture that will reduce the risk of war in the region, provide for maritime security, and cooperate to end long-running regional conflicts. Washington must also formulate policies that are in tune with how the region now sees its own interests. Otherwise, it will continue to lose influence to China and Russia, and the region will drift into nonalignment. Any U.S. reappraisal of its regional strategy must start with understanding the pressures and opportunities that brought Riyadh’s leadership to Beijing’s doorstep.