Intelligence Briefings

An Attempt to Ease Iran-Saudi Tensions

China has a deep interest in the stability of the Persian Gulf region in the ability of countries in the region to securely produce and export oil and gas.

ESAI EnergyA trilateral accord, brokered by and announced in Beijing, aims to " develop good neighborly relations” between the long-time rivals Iran and Saudi Arabia. The centerpiece of the public statement was an agreement between Tehran and Riyadh to resume diplomatic relations, which were suspended in 2016 after Saudi Arabia’s execution of a Saudi Shia cleric and the subsequent attack by a mob of protesters on the Saudi embassy in Tehran and its consulate in Moshad. Beijing is touting its role both as a sign of its political ascendancy in the region and to show Washington’s reduced importance globally. The Chinese government, and much of the press coverage, has also painted this limited public agreement very optimistically, characterizing it as détente – something that is a much deeper and lengthier process of lessening tensions between two rivals.

The coverage of the agreement as a changing of the guard in terms of U.S. versus Chinese influence is overblown. As noted in the joint statement itself, talks between Iran and Saudi Arabia about improving relations have been taking place for two years, with the detailed preparatory talks being hosted by Iraq and Oman. Given the state of relations between Washington and Tehran, there is no way that the Biden administration could have played that intermediary role. However, as noted by U.S. National Security Council spokesman John Kirby, the U.S. supports the de-escalation of tensions in the region and hopes that this improvement will lead to an end to the war in Yemen – which has been a central arena of direct and proxy involvement by the two regional powers. Washington has been pressing Saudi Arabia to find a way to stop the war, and it has pressured Iran through the interdiction of arms to its Houthi allies in Yemen. Finally, the Saudis kept Washington fully apprised of the discussions over the past several years, including Riyadh’s desire to resume diplomatic relations, so the accord was no surprise.

The agreement is very limited in scope, and diplomatic relations will only be restored in two months if other non–public steps are taken. Reports indicate that Riyadh will only finalize the restoration of diplomatic relations if Iran stops direct (IRGC/Quds forces) and indirect (through Houthi clients) attacks on Saudi Arabia. Saudi Arabia also wants Iran to curtail its military support for the Houthis. Whether Tehran will actually limit its support for the Houthis, how that would be verified by Riyadh, is unknown. In addition, while Tehran may agree to stop attacks, the Houthis may not or may not for very long. Both Saudi Arabian and Iranian influence on their proxies in Yemen is limited. Similarly, Beijing’s influence is limited in both countries. Like the United States since World War II, China will only have a circumscribed ability to transform its arms sales and energy buys into lasting political dominance in a region with its own dynamics and history. Long-time Old Middle East hands in Washington may shake their heads and quietly wish Beijing luck.

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