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Saudi-Iran Agreement Brokered by China: Regional Implications

Abigail Flynn
March 20, 2023

Saudi Arabia and Iran agreed to re-establish diplomatic ties earlier this month in a negotiation mediated by China. The two countries suspended diplomatic relations in 2016 after demonstrators in Tehran stormed the Saudi embassy  in response to a Shia cleric being executed in Riyadh. Ambassador Karim Haggag '92, professor of practice and director of Middle East studies in AUC’s Department of Public Policy and Administration, explains what this development means for the region and for global powers like the U.S. and China. 

What is the original source of conflict between Saudi Arabia and Iran?

The conflict between Saudi Arabia and Iran is historic and relates primarily to the status of these two countries as rival regional powers, going back even before the Islamic Revolution in Iran in 1979. Part of this rivalry is geopolitical and part of it is ideological. 

What is the geopolitical aspect?

It relates to security, specifically to the reliance of Saudi Arabia on American military protection, which is a clear security threat to Iran. Over the past 10 or 15 years, this rivalry has extended to other areas in the region, including Syria, Yemen, Bahrain, Lebanon and Iraq. Each country’s internal conflicts were influenced by Saudi Arabia and Iran’s interests in checking each other’s power. 

What is the ideological aspect? 

The ideological conflict is seen in instances of Shia agitation in Saudi Arabia that seem to be fomented by Iran. Saudi Arabia executed a Shia cleric in 2016 which led to demonstrations in Iran at the Saudi embassy. Hopefully, the limited agreement reached last week will defuse the immediate source of tension between the two countries.

Why do you say that the agreement is only “limited”?

The agreement brokered in Beijing was not comprehensive. While it did open channels of political communication between the two countries, which should de-escalate some of the rhetorical animosity on either side, it has not broadly changed their relationship as rivals in the region. 

Since the agreement is not comprehensive, do you think it will be successful in stopping bloodshed in the high-conflict areas these two countries are involved in?

It remains to be seen. The immediate litmus test of whether this arrangement is making real change will be Yemen, as Yemen is the conflict closest to home for Saudi Arabia and presents the most immediate security threat to the monarchy. After Yemen, we will also have to look to Lebanon and Syria to see if there are real shifts in the way Iran and Saudi Arabia are engaging with each other in these proxy states. 

Can you expand on what it means for Saudi Arabia and Iran to use proxies?

Sure, it means that they are leveraging their relationship with certain groups within other countries to exert their influence against the other power. We see this in Yemen with the Houthis, Hezbollah in Lebanon and Shia militias in Iraq and Syria.

How will we know if deescalation is actually happening on the ground?

Let’s look at Yemen as an example. There has been a tenuous ceasefire in Yemen since April 2022 between the Houthis and Yemeni government. If this arrangement between Saudi Arabia and Iran opens the door for a consolidated settlement to the Yemen conflict, then this will be a definite indication of the two rivals changing their approach with their proxies.

In our last discussion on geopolitics in the Middle East, we discussed China’s rising influence in the region. Why was China selected to broker these negotiations instead of the U.S.? 

The U.S. could not have mediated this discussion because it is not a neutral party; it has a major security role in Saudi Arabia and no official diplomatic relationship with Iran. China, however, has diplomatic relations with both countries and was able to frame its involvement with the conflict in almost purely economic and commercial terms, rather than in overt political or security terms. 

Why is China’s role significant?

Up to this point, China’s influence in the region has been rising steadily but has remained in the economic sphere. For China to involve itself in these regional political conflicts is a significant departure from its previous approach, but it's too early to tell if this will turn into a broader and consistently politically involved role for China.

Why is China suddenly the Middle East’s peacekeeper?

Well, let’s be clear on what happened and what didn’t happen. China stepped in to play a mediating role and achieved a narrow, transactional agreement between the two countries to open up communication. China did not fulfill any sort of broad peacemaking role and still has no involvement in regional security.

Who handles regional security?

The U.S. is still the dominant player regarding security and military presence in the region. China does not seem interested in contesting that role, even though it has been filling the diplomacy vacuum that the U.S. has left.

Do you think China’s involvement will bring U.S. focus back into the region? 

At this point, the U.S. has no interest in mediating conflicts in the region and has refocused its interests elsewhere internationally. The U.S. may be concerned with China’s expanding influence in the MENA region and that may be an incentive to pay more attention to the Middle East, but that is less about regional politics and more about countering China.