With a tenure mired in massive protests, internal power struggles, poor economic performance, and worsening regional and international relations, Iranian President Ebrahim Raisi can only celebrate the move to restore diplomatic relations between Iran and Saudi Arabia. The two countries will reopen their embassies and diplomatic missions within the next two months, seven years after their relations were severed, in a diplomatic breakthrough that could have an enormous ripple effect on the region, especially since they also vowed to implement a security cooperation agreement signed in 2001 and a deal to boost economic, technical, scientific, cultural signed in 1998. This must be the Raisi administration’s greatest achievement to date.

It is too early to declare the Chinese mediation a success since Beijing cannot solve the many complex and overlapping issues upsetting relations between the two countries. But resuming diplomatic relations is likely to facilitate cooperation on Yemen, the Syrian Civil War, and the Lebanese crisis – all of which Iran controls to some extent. It is not surprising that the Iranian leadership and the official media celebrated the agreement with Saudi Arabia as “the beginning of the end of American hegemony” in the Middle East.

“Regarding the recent agreement, it… was a tectonic shift in the political field and an end to the American hegemony in the region. The post-US era in the Gulf region has just started,” declared Major General Yahya Rahim Safavi, a top military adviser to Iran’s supreme leader Ayatollah Seyyed Ali Khamenei, as quoted in Iran’s Press TV. “The Chinese have decided to become the world’s first economy by 2030. The deal between Iran and Saudi Arabia, mediated by China, dealt the second biggest blow to the US by China. This is because Saudi Arabia is China’s largest supplier of oil, and on the other hand, China’s strategic partnership agreement with Iran to invest in the development of our infrastructure was great.”

Safavi also expressed the hope that the region will move towards sustainable security and peace through the Iran-Saudi détente. “In my opinion, the agreement is in the interests of the two countries and the Western Asia region. It is not against any regional countries. Of course, it is natural for the arrogant powers to be upset about this issue and [try to] sabotage it,” he said. If things go smoothly in the next few months, it is likely that the fruits of this Iranian-Saudi rapprochement will be reaped in the crises of Yemen, Syria, Lebanon, Iraq, and regional security.

Speaking at a press briefing in Tehran on Monday, Iran’s Foreign Ministry Spokesman Nasser Kanani viewed it as a watershed moment: “By expanding their cooperation, Tehran and Riyadh can help secure the interests of their nations. They can also have a positive effect on strengthening cooperation and convergence in the region to consolidate regional peace and stability, especially in the strategic Gulf region.”

Kanani praised China’s leading role in brokering the deal, noting that Beijing has shown how much it wants to contribute to the stability and security of the region with goodwill. He also welcomed the constructive role played by Iraq and Oman regarding the Iran-Saudi pact, saying the two countries hosted almost eight rounds of talks between Tehran and Riyadh.

Asked about the recent visit by an Iranian parliamentary delegation to Bahrain, he said that the positive reactions to the Iran-Saudi deal show that the diplomatic breakthrough can have positive effects on regional relations: “Fortunately, with the atmosphere that we are witnessing in the region, this positive development can happen in connection with other regional countries as well, including Bahrain. We should further trust the path of diplomacy and take steps in this direction. It is expected that the new positive atmosphere, which has been formed in Iran-Saudi relations, will have good results in the issue of Yemen.”

Kanani also announced that the Iranian and Saudi foreign ministries are planning a meeting between the two foreign ministers shortly, without giving additional details about the venue, timing, or agenda of that meeting. “Given the goodwill that exists, we hope that the implementation of the agreement will be expedited,” he added.

There is no doubt that there are great benefits both Iran and Saudi Arabia can reap from their rapprochement. Iran hopes to ease regional and international pressure on it, and to improve economic conditions to calm the anger of Iranians suffering from unprecedented inflation and a decline in the value of the national riyal. As for Saudi Arabia, it hopes that  the rapprochement with Tehran will lead to an end to the Yemen War and bring the focus back to economic growth, creating a regional climate attractive to investment, and building strategic relations with Beijing that include security, defence, space, scientific research, and artificial intelligence.

It may be too early to talk about a “tectonic shift in the political field and an end to the American hegemony in the region” or the start of “the post-US era in the Gulf region” as the Iranian Foreign Ministry has put it, but the deal has left the US fighting for its role in the region. For one thing, it reduces the urge in the region for an alliance with Israel to confront Tehran. It also undermines Washington’s efforts to build an international axis against alleged Chinese aggression.

The rapprochement between Iran and Saudi Arabia is a big blow to Washington’s plans for the Middle East. The Biden administration was hoping, after the faltering of the nuclear agreement with Iran and Tehran’s military support for Russia, to build a regional axis against Iran in which the Gulf states would cooperate with Israel. But the resumption of diplomatic relations between Riyadh and Tehran undermines this plan. The deepening of Saudi-China relations also increases Saudi leverage vis-a-vis the US. Few in the West expected Chinese mediation to succeed so smoothly.

“It is an achievement that cannot be underestimated. China speaks the language of the leaders in the Gulf and the Middle East. This is a region whose leaders want political and security stability for growth and economic prosperity. China also says it wants to grow in peace, arguing that America is trying to destabilise security in Asia to prevent China’s economic growth and its ascent to the top of the international order,” one London-based European diplomat who had served in the Middle East told Al-Ahram Weekly.

“I have heard officials in the Middle East say that oil and gas are not forever and that they want to diversify and strengthen their economy because the world is moving fast towards green energy and dependence on fossil fuels will decrease. These officials also say that they do not want a war with Iran because there would be no winners and any confrontation would eat up the current, huge oil and gas surpluses, and they say that stability in the Middle East is a necessary condition for attracting foreign investment to the region. This view coincides with the Chinese position which leaves America largely isolated in the Middle East.”

The lukewarm American welcome to the Tehran-Riyadh deal reflects Washington’s fear of losing the initiative in the Middle East as it focuses all of its resources and energy on containing China, leaving the Middle East in chaos and mired in endless crises.

“US policy in the Middle East is based on rival competing axes, especially the Iranian-Saudi axis. Cynically, the US benefits from instability in the Middle East. It is not hard to see the appeal of the Chinese model in the region. China wants a system based on interests and political realism, and America wants an international system based on values set by the West.”

* A version of this article appears in print in the 16 March, 2023 edition of Al-Ahram Weekly