The China-brokered Saudi-Iran pact is a big deal. Here’s why it could be a gamechanger

Wang Yi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and director of the Office of the Central Foreign Affairs Commission, Ali Shamkhani, the secretary of Iran’s Supreme National Security Council, and Minister of State and national security adviser of Saudi Arabia Musaad bin Mohammed Al Aiban pose for pictures during a meeting in Beijing, China March 10, 2023. (Image credit: Reuters)

A significant agreement signed between bitter rivals Saudi Arabia and Iran on Friday with Chinese mediation can lead to a major realignment in relations among countries in West Asia and bring peace and stability to the volatile region.

Riyadh and Tehran agreed to restore diplomatic relations and if all goes well, reopen embassies in each other’s capitals in the next two months, seven years after they severed ties.

The United Arab Emirates (UAE) and Kuwait established diplomatic relations with Iran in 2022. More countries may now follow suit.

The success of achieving this complex deal between the two major powers in the region has also brought the focus on China and its growing clout in West Asia.

Implications of the agreement

As the implications of the deal play out in the region and beyond, observers say the agreement is likely to redraw the regional map of friends and foes, and will have global reverberations.

It can provide Iran with much-needed legitimacy in the Arab world, and pave the way to end the war in Yemen.

The agreement also offers a workable solution to the crisis in Lebanon and can even lead to resumption of negotiations to save the nuclear deal.

Impact on Israel

An agreement between Sunni dominated Saudi Arabia and Shia dominated Iran has upset Israel’s dream of putting together an Arab alliance against Tehran.

Israel was keen to see Riyadh as the centrepiece of its Abraham Accords. The latest development is seen as a major failure on the part of the Israeli leadership in its relations with Arab countries.

It has also raised serious questions on how much clout the United States still enjoys among the energy-rich countries of the region.

Israeli Prime Minister Benjamin Netanyahu blamed the country's previous government and US President Biden for Friday’s agreement between Saudi Arabia and Iran.

But Israel’s opposition leader Yair Lapid slammed Netanyahu and said the deal represents a “complete and dangerous failure” of the Israeli government's foreign policy. “It is a collapse of the regional defence wall that we started building against Iran,” he added.

Seven-year freeze

Saudi Arabia and Iran broke off ties in 2016 after the Saudis executed the prominent firebrand Shiite cleric Nimr al-Nimr, triggering reprisal attacks on the Saudi Embassy in Tehran.

But relations started to sour after US President Donald Trump pulled out of the nuclear agreement with Iran and imposed fresh sanctions on the country.

The subsequent Saudi decision to launch an all-out assault on the Iranian-backed Houthi movement in Yemen gave Iran the opportunity to intervene in another regional conflict as it had done earlier in Iraq and Lebanon.

The missile attack in 2019 on Saudi oil installations by Houthi militants and the US refusal to back Riyadh in its war in Yemen left the Kingdom isolated, especially when the UAE also decided to withdraw its forces from Yemen.

The opportunity to safeguard their oil installations from future attacks and get out of a messy and costly war may have led the Saudis to agree to a deal with Tehran.

What to expect in the coming days

Saudi Arabia and Iran will also revive agreements on security cooperation, as well as trade and investment, and set in motion the process of people-to-people contact and exchange of academics and scientists.

Faisal J. Abbas, chief editor of Arab News, said Crown Prince Mohammed bin Salman told The Atlantic magazine a year ago that Saudi Arabia sees Iran as a neighbour and it was in both parties’ interests to resolve matters.

Abbas added that if Tehran keeps to its end of the bargain this could be a true game-changer, heralding an era of regional peace and prosperity not seen in decades.

A failed US attempt

A United States brokered deal between Saudi Arabia and Israel to establish diplomatic relations was scuttled because of Washington’s failure to provide security guarantees and help Riyadh develop its civil nuclear programme.

According to the Wall Street Journal, the Saudis wanted American support to enrich uranium and develop their own fuel production system.

The US agreed to do so only if Riyadh accepted a strict International Atomic Energy Agency (IAEA) inspection, which included random and surprise checks by agency officials of Saudi nuclear installations.

Saudi Arabia has an existing agreement with the IAEA that exempts it from such intense scrutiny and Riyadh was reluctant to upgrade the arrangement.

But observers point out that given the current strain in US-Saudi relations, it was highly unlikely Washington would have agreed to develop Riyadh’s nuclear programme without the required checks. Such an agreement would also have struggled to get through the US Congress, as many members are suspicious of Saudi Arabia’s nuclear programme and fear sparking off an arms race in the region.

China factor

The success of China in bringing the two rivals together in this complex deal has surprised many.

Observers say unlike the US, China was an acceptable mediator to both Riyadh and Tehran.

Over the past two years, Saudi officials met with their Iranian counterparts on at least five occasions, mainly due to the efforts of Iraq and Oman. But neither country has the stature that China now enjoys in the region.

China has committed to invest over $400 billion in Iran over a 25-year period to develop the country’s infrastructure. It is also Tehran’s largest trade partner and consumer of its oil and gas.

Similarly, Beijing is Riyadh’s largest trading partner and has invested billions of dollars in various sectors in Saudi Arabia. In December, Chinese President Xi Jinping inked strategic pacts with Saudi Arabia and several other Arab and Gulf countries.

Most importantly, China is keen to cooperate with Saudi Arabia in developing its nuclear technology. Unlike the US it has no political constraints that prevent it from helping the kingdom in this crucial sector.

But how Beijing manages it without Saudi Arabia signing the Additional Protocol of the IAEA remains to be seen.

The agreement brokered by Beijing on Friday is being described by some as a tectonic shift for West Asia. However, its success will not only depend on Saudi Arabia and Iran adhering to the terms of the pact, but also on how the ongoing Sino-US rivalry plays out in this volatile region.