China has brokered an agreement between Saudi Arabia and Iran to restore bilateral relations. The two sides have agreed to reactivate the cooperation and security agreements signed in 1998 and 2001.

Within years of the end of the World War II, another conflict, called the Cold War, had started between the USA and the USSR. Both tried to dominate the world (order) militarily, economically and culturally. Each initiated a variety of programmes such as Molotov Plan (1947) and Marshall Plan (1948) to support their allies and make more allies through economic relief.

Each established security apparatuses, too, in the early Cold War period to ward off security threats to the respective bloc. Iran, and many post-colonial states from Asia including Pakistan, joined the American bloc while several key countries from Asia such as China joined the Soviet bloc. Before the revolution of 1979, Iran a monarchical political system that was structurally dependent on Western aid and diplomatic support. The Kingdom of Saudi Arabia, too, had joined the American security umbrella in the Cold War context.

Many of the countries that joined the US-led bloc had authoritarian political systems. On the other hand, a majority of the countries that sided with the USSR, also had authoritarian systems of another type.

Nonetheless, the Cold War geopolitics took several turns regionally. In the 1960s, the key global players, namely the USA and the USSR, reached a nuclear agreement. In early 1970s, the US and China started direct talks. The two sides established diplomatic ties in 1979 and boosted bilateral trade which surpassed $690 billion in 2022. Also, in 1979, the monarchy in Iran was toppled by the followers of Ruhollah Khomeini who led the anti-Shah movement from aboard and later joined his people in order to establish an Islamic state based on Shia interpretation of Islam.

It was an extraordinary development ideologically and geopolitically. The Saudi monarchy that followed a salafist interpretation of Islam grew suspicious of the Iranian regime which, in KSA’s view, could try to spread its ‘revolution’ in other parts of the Middle East. Hence, a sub-regional Cold War commenced between the Saudi-led camp, that included Pakistan, and the Iran-led camp including various militias in Lebanon, Palestine and later Syria and Yemen. Globally, the Khomeini-led Iran challenged the US hegemony particularly in the Middle East where the US and its NATO allies provided consistent military and economic support to Israel.

Iran identified Israel as a major threat to its existence as an independent country. Moreover, the new Iranian leadership bracketed Saudi Arabia with Israel, seeing both as pawns in the Western game. The Iran-Iraq war of the 1980s demonstrated, on the one hand, (sub) regional rivalries among Iran, Saudi Arabia and Israel and, on the other hand, between Iran and the US-led allies globally. Indeed, the US imposed several kinds of sanctions on Iran and sought a regime change.

This, however, did not materialise due to the ideological apparatuses established by the new regime, which heavily relied on its oil exports to countries like India and China. In the 1990s and early 2000s, Iran-Saudi relations did not improve significantly. Iran was not allowed to join the Gulf Cooperation Council (GCC) since its establishment in 1981. Iran is still not a member of GCC that is structurally controlled by Riyadh. The OIC too is under Saudi influence and Iran has a marginal role in it.

It is in the interest of the two countries to prefer peaceful co-existence to regional confrontation. Moreover, the Saudi-Iran rapprochement offers (economic) incentives to not only China but also other regional countries.

Over the decades, Iran has learnt the art of strategic maneuvering through various tactics including use of militia against its rivals. The US war in Iraq created a context that the Iranian authorities used to their advantage in terms of moral and military support to various factions in Iraq, Syria and other regional countries. Iran has also tussled with Saud Arabia in Yemen for many years now. Despite, a strong military buildup, the KSA has failed to prevail in Yemen.

Plausibly, due to economic burden of the lingering Yemen conflict coupled with the Kingdom’s desire to diversify its economy under Mohammad bin Salman’ Vision 2030 programme in a peaceful regional setting where China has marked its economic footprints under its Belt and Road Initiative (BRI), the Saudis opted for negotiations with their archival. The Iranian leaders to need space to stabilise their economy and society. Recently, scores of young people took to streets in parts of Iran for their rights of association and speech. To promote trans-regional trade with particularly China, that committed $400 billion for Iran in 2021, a relatively peaceful regional environment is a prerequisite. Saudi Arabia and its GCC partners desire the same for dividends from, for example, the BRI. China has also invested in Saudi Arabia, the UAE, Qatar and Israel. Both Iran and KSA export petroleum products to China.

Regional peace is necessary for uninterrupted supply chains and domestic growth in both the countries. In this respect, Saudi Arabia has backed its Gulf allies to establish diplomatic ties with Israel. Recently, the KSA has also opened its air space for Israeli flights. As a rational actor, Israel needs more markets.

Lastly, the US also already shifted its strategic radar to Southeast Asia if Asia Reassurance Initiative Act of 2018 (ARIA) is a point of reference. However, being a key global player, the US will keep its tactical and reconnaissance presence in the region through its military basses. A relatively non-violent Middle East serves American interest too.

The latter can attend to, for instance, South China Sea rather than wasting resources in the Middle East and Afghanistan. Thus, the US has also encouraged a dialogue between Iran and Saudi Arabia through Iraq and Jordon under Biden. Since there is a change in government in Iraq and perhaps the US is more into Russia-Ukraine war currently, China, got an opportunity to play a lead role in terms of encouraging and hosting behind-the-door discussions between Iran and KSA in recent months.

It is in the interest of the two countries therefore to prefer peaceful co-existence to regional confrontation. Moreover, the Saudi-Iran rapprochement offers (economic) incentives to not only China but also other regional countries including Israel. The KSA has signalled a willingness to establish diplomatic relations with Israel if the US guarantees supply of nuclear technology for civilian purposes. How and to what extent the Saudi-Iran détente impacts Iran-Israel relations and Iran-Pakistan relations in the coming months is yet to be seen.

If the rapprochement stays in intact, it is likely to encourage dialogue between traditional rivals in the Middle East and beyond.

The writer has a PhD in political science from Heidelberg University and a post-doc from UC-Berkeley. He is a DAAD, FDDI and Fulbright fellow and an associate professor. He can be reached at ejaz.bhatty@gmail.com

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