The news of an agreement between Iran and Saudi Arabia to start normalising relations may have been expected in several regional and world capitals; however, it still raised eyebrows, especially in view of the fact that it was signed in Beijing on the sidelines of a key political Chinese event.

Saudi Minister for Security Affairs Mussaad Al-Aiban, Head of Iran’s National Security Council Ali Shamkhani, in the presence of Wang Yi, China’s top diplomat, signed an agreement to resume diplomatic relations that had been severed in 2016 following the Saudi execution of a death sentence against a leading Saudi Shia clergyman and the subsequent attacks against Saudi diplomatic facilities in Tehran. The agreement stipulates a mutual respect for the sovereignty of both countries and allows for the resumption of security, trade and cultural ties.

Diplomatic sources in Cairo, the Gulf and Washington say that while it was expected that some sort of deal was being cooked between Iran and Saudi Arabia, given the talks that the two sides have been having with regard to the management of their proxy war in Yemen, the fact is that this agreement on the resumption of diplomatic relations is quite big news. It is more eye-catching, they say, that the signing took place in Beijing, a capital with no previous significant political role in the affairs of the Middle East – despite its large and expanding economic presence and its close and growing bilateral relations with Iran.

“The Saudis and Iranians have been talking for over a year now, mostly in Oman and Iran; this much is clear,” said an Egyptian government source who asked for his name to be withheld. However, he added, it is “quite big” to see the two countries, which had been actively denouncing one another repeatedly over the past few years, decide to move towards normalisation. “We will see how things unfold because this is a layered relationship,” he said.

The Yemen question

According to the announcement on Friday, the foreign ministers of Iran and Saudi Arabia are expected to meet within the coming weeks – eight weeks maximum – to decide on the next move for normalisation. Gulf-based sources say that much of what could come out of this meeting depends on how both sides will manage the situation in Yemen, where Riyadh and Tehran have been supporting conflicting sides in a civil war that broke out right after the ouster of Yemen’s former president Ali Abdullah Saleh in 2011.

Yemen is almost the ultimate test for the path of this recent diplomatic shift that the Iranians and Saudis decided to take, argued Khaled Okasha, head of the Egyptian Center for Strategic Studies. And according to a Gulf-based diplomatic source, “the Saudis are keen to end the war in Yemen, as it has proved to be quite taxing and has not achieved its key objectives.”

“If Iran plays clean in Yemen and decides to encourage its Shia allies, the Houthis, to move towards an agreement with the Saudi-supported Yemen Presidential Council, then things could move on the right track,” he added.

It was in March 2015 that the Saudis led a coalition to deter the Houthis’ control of significant parts of Yemen. The Saudis received intelligence and logistical support from several countries in and out of the region. 

Political researcher Karim Ahmed argued that at this point in time, it is in the interest of both the Saudis and Iranians to work on reaching a deal on Yemen because neither country is interested in continuing this open-ended war that has come at a great cost to the Yemeni people. He added that it is possible to see some good signs in the recent UN announcement of its plan to remove oil from a stricken Yemen tanker. A détente between Tehran and Riyadh could certainly give a boost to this scheme, he argued.

Less than 24 hours before the announcement of the Beijing deal, the UN said that it reached a deal on the purchase of a vessel that will allow for the removal of more than a million barrels of oil from a decaying super tanker that has threatened a major oil spill in the Red Sea, with shocking environmental, health and trade consequences.

A Washington-based diplomat, however, argued that one should not jump to conclusions about how far the recent announcement would impact the developments in Yemen because Iran would not necessarily be so cooperative about striking a comprehensive deal on Yemen – although it might eventually do so. “A reduction of hostilities is certainly possible, but a total end to the war is another story,” he argued.

A complex situation

Meanwhile, the same Washington-based diplomat said that there are more consequential questions to be asked in relation to the recent diplomatic announcement. Those, he said, certainly include the kind of tacit agreements that the two countries would reach on other areas of contested influence between Iran and Saudi Arabia, particularly with regard to Iraq and Lebanon.

“It is really hard to think that Iran would forgo its influence in any of the countries of the region where it has a significant influence,” he said. The issue, he argued, would be about the implicit demarcation lines of power that Riyadh and Tehran would agree to – be it in Yemen or elsewhere across the spaces of conflicting interest in the region. This is why, he said, it would be a mistake to jump into qualifying the recent announcement as a Saudi-Iranian reconciliation pact – it is “too premature for this; if this is possible in the first place,” he said.

Gulf-based diplomats say that it is hard to assume that a tentative agreement on non-interference – which is mainly about the Iranian influence over the Shias of Saudi Arabia and Bahrain, or the indirect Saudi influence over the Sunnis of Iran – and on a de-escalation scheme for Yemen could dispel a long and profound Sunni-Shia rivalry.

“The two countries have often made a point of avoiding a full-on confrontation – political or otherwise,” said one. He argued that one way or the other, the bras de fer would continue, but maybe in softer ways.

Meanwhile, according to the Washington-based diplomat, it is hard to disregard the fact that the wish of both Saudi Arabia and Iran is to accommodate China’s wish to be the dealmaker in this diplomatic agreement. “The Iranians have incredible trade and political interests with China, especially in view of the failure of Tehran to reach a new nuclear deal with the West and the Saudis’ wish to expand their ties with the Chinese, as has been demonstrated with the Saudi hosting of an Arab-Chinese summit last year, shortly after having hosted a US-Arab summit,” he said.

Speaking from Washington, the Gulf or in Cairo, diplomatic sources agreed that China is the number one winner of this Beijing-hosted signing of a Saudi-Iranian agreement. China, said one, has liberated itself from the tight-rope walk it had committed to as it worked on expanding relations with both Iran and Saudi Arabia. “The Chinese were very careful not to go too far in their alliance with Iran – despite a 2021 signed strategic deal of cooperation for 25 years – to avoid upsetting Saudi Arabia, and China has been cautious in advancing its relations with the Saudis, or for that matter with the UAE, despite the strategic agreements signed with both countries, in order to avoid upsetting Tehran,” he explained.

China-US rivalry

Meanwhile, the same diplomatic sources say that with the Friday announcement, China has scored on the US, which has been pushing back against the expanding Chinese influence in the Middle East – and for that matter in Africa – during the past year. Previously, they explained, China’s presence in the region was mostly economy-oriented, but now it has taken a political profile.

According to Mohamed Fayez, a senior expert on Asian affairs at Al-Ahram Centre for Political and Strategic Studies, it has been a while now that China has been walking its path to give a political imprint to its ties with the Middle East. He explained that for over two years, China has been trying to play a direct role in the Palestinian-Israeli file and has actually been considering ideas about a security agreement for the Gulf region.

Neither attempt, he said, had really picked up. “But maybe now with the Beijing signing of this Saudi-Iranian pact, Chinese diplomacy might act to re-invigorate these initiatives or to offer some new initiatives” along the line of its economic cooperation schemes, including the most ambitious Belt and Road initiative.

Diplomats in Washington and the Gulf agreed that while Washington has joined the wider international community in welcoming the recent China-sponsored agreement, it is certain that foreign policymakers in the US capital now are getting more worried about China’s next step in the Middle East, which the US has been getting less involved in, as part of its focus to put a lid on the growing Chinese influence.

In an article he published on the Washington-based Center for Strategic International Studies, Jon Alterman, a senior researcher, argued that the Joe Biden Administration has already spoken of the need for regional security dialogues and “is presumably supportive of this agreement least in general lines.” He added that while the US remains the “preponderant military power in the Gulf”, the US must also be coming to see China as a country with a powerful and rising presence in the Gulf.

China’s presence in the region will only expand – “even if slowly but surely”, Fayez argued. However, he added that it is hard to think that “today, China has the military or security capacity to replace the US military and security role in the region.”

In remarks on his Twitter account, informed and well-connected UAE political scientist Abdoullah Abdulkhaleq said that China cannot replace the US in the region and that Iran remains the biggest threat to regional stability and Gulf security. Anwar Gergash, the Emirati Minister of State for foreign affairs, has welcomed the China-sponsored deal and said that his country hopes that the deal will help regional security and stability.

Other players, other factors

The UAE has already been ahead of Saudi Arabia in pursuing a détente with the Iranians. Last summer, the UAE and Iran announced their plan to resume diplomatic relations that were severed over six years ago.

Qatar and Oman, who are also members of the Gulf Cooperation Council, with a Riyadh headquarters, have traditionally established good economic cooperation and well-managed political relations with Iran.

Kuwait has also been avoiding any significant fallouts with Iran, especially after its liberation from a months-long Iraqi occupation in February 1991. Bahrain, with a considerable Shia population, remains very apprehensive about Iranian intentions even after the signing of the recent agreement with Saudi Arabia.

According to the Washington-based diplomat, a breakthrough in relations between Iran and Saudi Arabia – “and we cannot say we have one yet” – does not mean a wider breakthrough in Iranian relations across the region. “There are different dynamics involved,” he said.

He added that at the same time, it would be wrong to assume the Iranian-Saudi rapprochement is going to cancel the slow but serious talks that Riyadh and Washington are having over a possible Saudi normalisation with Israel.

Former Israeli Prime Minister Neftali Bennett had a very critical reaction to the Saudi-Iranian agreement on Friday. Bennett blamed the move on the failed policies of the current Israeli government of Benyamin Netanyahu. However, sources in Washington and the Gulf say that Netanyahu is actually working with Washington on a possible deal that could lead to the “big prize” of normalisation with the Saudis.

The trouble is, the Gulf sources say, that while Washington might be willing to accommodate Riyadh in its requests for a package to sell to the Saudi public opinion as a trade-off for Saudi-Israeli normalisation, it is not certain that Netanyahu would wish to accommodate the Saudis, and for that matter the Americans, on “giving something to the Palestinians” to make it possible for the Saudi leaders to reassure their public on the Saudi position vis-à-vis the Palestinian Cause, and particularly that of Jerusalem.

Meanwhile, an Egyptian government source said it is simply too superficial to assume that the Saudi-Iranian deal would have a diplomatic domino effect that could produce a resumption of Egyptian-Iranian diplomatic relations that were cut since 1979, upon the early years of the rule of the Islamic Revolution in Iran.

“It does not work this way; traditionally we have accommodated the Saudi concern and that of other Gulf countries with regards to the worries over Iranian hegemony, but we also have our concerns and we base our policies upon these concerns and upon our interests,” he said.

A top concern for Egypt has always been the wish of Tehran to expand an Islamist-style rule across the region to support movements that pursue militant resistance to Israeli occupation – something that Cairo thinks is unhelpful to the chances of having a peaceful situation for the Palestinians under Israeli occupation. Moreover, Cairo has always maintained, throughout all attempts of a diplomatic rapprochement, that it cannot be upgrading diplomatic relations with Iran for as long as Tehran keeps the name of Khaled Al-Islamboli, a key member of the Islamic group that assassinated President Anwar Sadat in 1981, on one of the main roads of the Iranian capital.

Egypt was one of the first countries that welcomed the Saudi-Iranian agreement.

According to Okasha, this falls within the parameters of the Egyptian foreign policy scheme of pursuing political solutions to regional conflicts. “We think that this is essential for regional stability and we have been pursuing this path, for example with Turkey, despite deep and profound differences of the past few years,” Okasha said.

According to Okasha, in a moment of considerable international upheaval due to the war on Ukraine, and in view of the many “open regional conflicts since 2011, including those in Yemen, Libya and Syria,” any political agreement to dissolve a conflict is certainly a good development. Okasha added that the countries of the region, not just Saudi Arabia, will be watching closely to follow the Iranian political choices in the coming weeks and months.