What’s most notable about the Iranian-Saudi deal?
The agreement between Iran and Saudi Arabia to restore full diplomatic relations is a significant achievement. In talks sponsored by China, with important earlier assistance from Iraq and Oman, the two countries struck a bargain that promises to lower what had been rising tensions between the two countries.
Riyadh and Tehran are longstanding rivals. In Saudi Arabia’s eyes, Iran is a revisionist power that foments unrest in the Middle East through its support for non-state actors in Iraq, Lebanon, Syria and Yemen. Riyadh believes that Iran constitutes a threat to the kingdom’s security and that of the region. In Iran’s eyes, Saudi Arabia is a rival for regional hegemony that drags foreign powers into the Gulf. Both countries wish to be seen as a leader of all Muslims. They have been on opposite sides of many of the region’s wars in recent decades, notably today in Yemen, where Saudi Arabia backs the internationally recognised government and Iran the Huthi rebels. Riyadh and Tehran broke off relations in 2016, after Saudi authorities hanged Nimr al-Nimr, a Shiite cleric and dissident, prompting protesters in the Iranian capital to sack the Saudi embassy.
The timing of the deal to renew ties was surprising, as was the fact that China brokered it.
The timing of the deal to renew ties was surprising, as was the fact that China brokered it. Iran and Saudi Arabia had been talking about reestablishing diplomatic relations for some time, but it looked as if those discussions had reached an impasse. Iran had been pushing to mend fences, and reopen the embassies, but Saudi Arabia had been resisting, holding out for concessions from Tehran on other issues, including the war in Yemen, before it would take that step. As a senior Saudi official explained to Crisis Group in late 2022, “Iran wants to reestablish ties, but we need to talk about why ties were broken off in the first place. Iran needs to acknowledge that these issues [its relationship with non-state actors, notably the Huthis] exist in order to move forward with the dialogue”. There are several reasons why the deal emerged more swiftly than expected, and China’s involvement is certainly one of them. As a major power, Beijing was likely able to provide assurances to both sides that helped them overcome their lingering reticence.
What is in the deal?
The Joint Trilateral Statement, as the deal is known, lays out a timetable for restoring full diplomatic ties, including an exchange of ambassadors. The statement, signed by the Saudi national security adviser, Musaad bin Mohammed Al Aiban, the secretary of the Iranian Supreme National Security Council, Ali Shamkhani, and the director of the Foreign Affairs Commission of the Chinese Communist Party’s Central Committee, Wang Yi, enjoins each of the two sides to respect the principles of sovereignty and non-interference in the other’s internal affairs. It gives the parties two months to continue meeting between themselves and with China, to work out the practicalities of renewing relations and reopening embassies. It also recommits them to two previous agreements signed in 1998 and 2001. The first included promises of greater trade and investment, as well as cooperation in the fields of technology, science, culture, sports and youth. The second provided for Iranian and Saudi security and intelligence agencies to work together in battling a variety of threats, including terrorist groups, that both countries face.
But the accord is just a roadmap. Several issues render definitive judgment on its significance premature. The joint statement provides no detail as to what the two sides may have given each other in order to mend ties.
The deal comes after several years of cautious engagement prompted by fears of open confrontation. In 2019, several attacks took place on Saudi Arabia’s oil infrastructure as well as on vessels steaming under various flags in the Gulf. At that time, most of the Gulf Arab states were backers of U.S. President Donald Trump’s “maximum pressure” campaign. That entailed the U.S. unilaterally withdrawing from the 2015 nuclear deal with Iran, ratcheting up economic sanctions on the country nominally so as to punish it into accepting an agreement featuring much tighter restrictions on its nuclear program and the possibility of expanding it to cover other aspects of Iran’s power projection, like the country’s missile program or involvement in conflicts in the region. The Gulf monarchies and Western governments attributed the attacks to Iran, and Riyadh and Abu Dhabi looked to the U.S., their long-time security guarantor, for protection. They were alarmed when the Trump administration took no action: they felt that the “maximum pressure” policy had put them in the line of fire while offering little in return. First the United Arab Emirates and later Saudi Arabia began quietly reaching out to Iran to de-escalate tensions.
Mediation by Iraq and Oman brought Saudi Arabia and Iran to the table, with formal bilateral talks beginning in April 2021. Baghdad and Muscat hosted several rounds of discussions between intelligence chiefs, accompanied by individuals from the two countries’ foreign ministries and security services, over the next two years. The dialogue was fitful, in part because Iraqi Prime Minister Mustafa al-Kadhimi, who was one of the facilitators, had to make way for his elected successor in October 2022. Subsequent political turmoil dealt a further blow to Iraqi mediation efforts. But perhaps more significant was that Iran and Saudi Arabia were making little headway in the dialogue, intensifying frustrations all around. A senior Saudi official told Crisis Group that, after the fifth round of discussions in April 2022, the two sides had no serious contact for months. The official emphasised, however, that the Iraq-facilitated talks prepared the ground for the eventual deal because they “helped show Iran that [Riyadh] needed clear commitments [to move forward]”.
In early December 2022, China’s President Xi Jinping went to Riyadh for the first-ever Chinese-Arab summit.
China then got involved to bridge the gap. In early December 2022, China’s President Xi Jinping went to Riyadh for the first-ever Chinese-Arab summit. At this gathering, as a senior Saudi official confirmed to Crisis Group, Beijing offered to host Saudi-Iranian talks. Other details of the exchange are subject to debate. Some reports say Saudi Arabia asked Xi to convey a message to Iran about restarting talks; others say Beijing proposed itself as a mediator, with the goal of convening a Gulf-Iran dialogue in China in 2023. Whatever the case, China reportedly passed the word along to Iranian officials as requested, and Saudi-Iranian contacts soon resumed. The two foreign ministers greeted each other on the sidelines of the Baghdad Conference – another nascent regional dialogue initiative – in Amman, Jordan later that month. Saudi and Iranian officials met for more substantive conversations at the Brazilian president’s inauguration ceremony in early January. China also discussed plans for resuming the bilateral talks with Iran’s President Ebrahim Raisi during his state visit to Beijing on 14-16 February. The China-hosted talks in March 2023, which lasted five days, thus followed much preparatory work. The same senior Saudi official said, “We are very appreciative of China’s role. … China helped with some sticky moments”.
How China may have got the parties to agree is unclear, with the accord’s details remaining unknown, though media reporting and Crisis Group conversations with officials and experts involved offered some insight. Riyadh had made progress on the Yemen track a precondition for reestablishing diplomatic ties with Iran. In this vein, it reportedly secured Tehran’s agreement to stop inciting the Huthis to stage cross-border attacks on Saudi Arabia. Iran reportedly also agreed to halt weapons transfers to the Huthis. In return, Iran reportedly asked Saudi Arabia to tone down the coverage of anti-regime protests on Iran International, a TV channel it funds (though Saudi officials publicly deny doing so), and to scale back their support for Iranian opposition and separatist groups. Saudi Arabia is said to have agreed. Its backing of Iran International as the protests continue gave it a card it had previously lacked, allowing it to press for Iranian concessions on Yemen. This factor, along with China’s sudden involvement, could help explain why talks progressed.
The accord’s timing could also relate to events in Yemen, where a de facto truce has held since the official one lapsed in October 2022. The Saudis have been talking to the Huthis about extending and expanding the truce. Sources say some sort of Saudi-Huthi deal may be around the corner, though intra-Yemeni dialogue may be harder to get to. The possibility of de-escalation in Yemen may have eased the way for more constructive exchanges between Saudi Arabia and Iran. Renewing or even expanding the truce in Yemen could, in turn, do much to help make a Saudi-Iranian deal stick.
What does it mean that China sponsored this deal?
Aside from the timing, what surprised many about the agreement to start restoring Saudi-Iranian relations was China’s role as the deal’s broker and guarantor. Whether Beijing got anything concrete for taking on this task, beyond simply positioning itself as increasingly influential in regional politics and firming up its economic links, is unclear. China is a significant buyer of Iranian oil, and in March 2021, it signed a 25-year economic cooperation agreement with Tehran. China is also Saudi Arabia’s primary trading partner. After the deal was signed, a senior Saudi official told Crisis Group that China is the only country in a position to both pressure Iran and offer assurances to Saudi Arabia. A Saudi expert close to the talks likewise explained to Crisis Group, “China is in the region to stay. It has leverage with Iran following the signing of the 25-year deal. … It should use it”. Beijing’s fraught relations with the U.S. and the possibility of a crisis over Taiwan means it seeks greater stability in its commodities flows. Greater political involvement in the Middle East could help create more guarantees on this front.
The deal also sends the clearest message to date that China is pursuing power projection in the Middle East outside the economic sphere, part of its general aspiration to attain a broader global reach and become an alternative to the West as a conflict mediator. In Beijing’s eyes, the deal between Saudi Arabia and Iran lends credence to its claim that it is a peacemaker, an actor that helps resolve conflict through consultation and dialogue, in contrast to what it portrays as Washington’s strong-arm tactics. Beijing needed a win in this domain, since its previous cautious involvement in mediation had little success. From 2003 to 2009, it hosted the Six Party Talks on North Korean denuclearisation, from which Pyongyang eventually withdrew; it played a facilitation role in the Myanmar peace process, which stalled with the 2021 military coup; and it mediated between Sudan and South Sudan in 2015, mainly to protect its investments in the two countries’ oil industry. None of these efforts has produced a concrete outcome that changed the course of the given dispute.
But if the Iranian-Saudi deal proves a success and increases Chinese leverage in the Middle East, it will also hand it more responsibilities. As the deal’s guarantor, Beijing will be held responsible for making it stick. It remains to be seen how it will encourage the parties to follow through with the deal, and whether it has the necessary motivation and capability.
Saudi Arabia and Iran each have compelling reasons to put China at centre stage.
From their side, Saudi Arabia and Iran each have compelling reasons to put China at centre stage. Having Beijing mediate a deal allows Tehran to demonstrate that it is not as isolated or dependent on Moscow as the Western policymakers maintaining sanctions wish it to be. Iran also values its economic links with China. It may be growing irritated with this relationship, because it has found the Chinese signature on commercial deals unreliable and the Chinese goods it imports of poor quality, but it still needs to maintain good ties. Likewise, it needs China’s political support, however irregular. As international pressure on Iran heightens, with negotiations to revive the 2015 nuclear deal stalled and the anti-regime protests continuing (though at a much reduced level), all while the economic crisis worsens, Tehran is keen to showcase its remaining partnerships, especially with Beijing, Washington’s main superpower rival.
As for Saudi Arabia, the deal lets Riyadh show that it is not exclusively reliant on Washington. Its recent tensions with the U.S. make diversifying its relationships critical. Riyadh believes the U.S. is slowly retreating from the Middle East and is therefore a less reliable security guarantor than it used to be. It chafes at U.S. attempts to dictate its actions, such as in late 2022, when the Biden administration tried to convince it to pump more crude to bring down the oil price. The Saudi-Iranian deal comes after the three Chinese-Arab summits, all in Riyadh, which brought China together with Saudi Arabia, the six members of the Gulf Cooperation Council (GCC) and the Arab League, respectively. These meetings produced dozens of economic agreements, as well as a comprehensive strategic partnership between Saudi Arabia and China.
All of this Chinese engagement has also featured reminders that greater political involvement in the Middle East will bring greater scrutiny and more scope for making mistakes. The GCC-China meeting yielded a joint statement that adopted language seemingly supportive of the United Arab Emirates’ claims to Abu Musa and the Greater and Lesser Tunbs, disputed islands in the Gulf now in Iran’s control. The Iranian foreign ministry promptly summoned the Chinese ambassador to express its frustration with the statement.
What impact might the deal have in the Middle East?
It remains to be seen how the deal will affect the region. As noted above, Saudi Arabia and Iran compete for hegemony on a range of fronts. They also have divergent visions for regional security, with the former believing in the value of having many foreign powers involved in regional security and the latter that regional security should be the purview of those in the region. The agreement – and, should the parties follow through with its prescriptions, the reestablishment of diplomatic ties – is only a first step for Tehran and Riyadh in addressing their significant differences.
One place where the deal could bring progress is the war in Yemen, whose outcome Riyadh sees as of critical importance to Saudi Arabia’s security. The Saudi-Huthi talks about expanding a formal truce are still under way. Iran could help by persuading the rebel group to dilute its preconditions on the so-called humanitarian track, where it is demanding that the internationally recognised government pay military and civil service salaries in the parts of Yemen its forces control and that its adversaries lift all restrictions on Sanaa airport and the Hodeida seaports. Crisis Group sources in Yemen report movement on this track, as well as a potential agreement by which Tehran no longer encourages the Huthis to conduct cross-border attacks inside Saudi Arabia – an absolute priority for Riyadh. A Saudi-Huthi deal would not in itself be enough: all parties involved would then have to launch an inter-Yemeni political dialogue to chart a path toward a nationwide ceasefire and inclusive political negotiations to end the war. Overall, though, it is hard to envisage a durable peace for Yemen while Iran and Saudi Arabia (and its coalition partners) remain at odds over its future.