Iran-Saudi rapprochement: Despite realignment taking shape in Gulf region, deal implementation remains challenging

By: Maj Gen Jagatbir Singh

There are a host of issues that involve a major policy shift in entrenched positions by both sides. We need to wait and see the outcome as the two month period outlined in the agreement is not easy to bridge the bitter gulf

The recent strategic shocks that include the Ukrainian Conflict, pull out of US from Afghanistan and China’s aggression all point to an unstable global situation, a dangerous decade and historic hinge. The world is increasingly more chaotic and West Asia as a region is more volatile hence it is important to have better relations in order to insulate the countries in the region.

The region is at the heart of global energy trade, and centre of logistical connectivity. It is also the destination for millions of religious pilgrims. As the new world order is emerging, the region is witnessing diplomatic initiatives that are reshaping regional alignments and defining global power equations.

It is in this region that the US is increasingly being looked at as partisan. West Asia has been in a churn since the decline of US credibility, its diminishing interests and disengagement in the region. This forced the countries to safeguard their own interests. They are now pursuing ‘strategic autonomy’; taking decisions on their own based on their self-interests.

China has no doubt promoted dialogue amongst its principal partners who were estranged from each other in order to promote harmony. It signifies President Xi’s willingness to leverage his economic clout in third-party negotiations.

Problems in implementation

While both nations seemed predestined for immutable rivalry because of the ancient Persian-Arab divide and the Sunni-Shia divide, the Saudi Arabia – Iran deal suggests that the two sides have made some progress in addressing critical areas of their disputes.

However, the feud between Iran and Saudi Arabia is rooted in doctrine, enmeshed in history, and both nations have waged wars via proxies across the Middle East. They need to overcome sharp differences and wide chasms of this deep fundamental rift between Shias and Sunnis where a historical fault line exists.

Iran cannot afford to dismantle their Armed militias nor reduce the power of Islamic Revolutionary Guard Corps (IRGC) which is viewed as a terrorist organisation by the US but necessary to protect its ideological character and take on US and Israel. Both countries are fighting long running, multiple and ruinous Proxy Wars, supporting militant groups against each other in Yemen, Lebanon, Syria and Libya.

In Syria the Saudi has reportedly supported ISIS while Iran supports President Assad along with Russia, whereas in Yemen the Saudi’s supported the ruling regime of President Hadi and Iran supports the Houthi rebels, in Lebanon Iran supports the Hezbollah and in Palestine both Iran and Saudi Arabia support the Hamas. Conversely, can actions by these non-state actors torpedo the Agreement.

Iran’s stockpile of enriched uranium is now reportedly at 60 percent enrichment, its highest ever and a jump from the 3.67 percent limit set out by the 2015 deal. Enrichment above 90 per cent qualifies for weapons-grade uranium. Diplomatic relations are unlikely to eliminate Saudi Arabia ‘s concerns about the Iranian nuclear weapons programme. Conversely, will Iran now find the roads to bypass the sanctions and render them ineffective?

UAE shares a maritime border with Iran where there is a dispute over three islands. With I2U2 it was firmly aligned towards the US. It had also intervened in Yemen, but returned its Ambassador to Iran last August after 2016. But suspicions still run deep, last year, a drone strike launched by the Iran-backed Houthis hit Abu Dhabi, hurting the UAE’s reputation as a safe harbour in the volatile Middle East.

The Economist seemed to have summed these concerns up by saying- ‘the agreement was transactional and not transformational’ and that ‘the two will remain at daggers drawn’.

Implications for India

India needs to maintain a balancing act in a region where it has deep abiding interests and good relations with the countries in the region, its core interests range from religious ties. energy, trade, investments and a large diaspora. It had close civilisational ties with Iran but Iran moved closer to China since India voted against it in IAEA in 2009, though it did abstain from the vote in IAEA in 2022 and then discontinued oil purchases on pressure from President Trump in 2019.

Iran feels that India has consistently subordinated its ties with Iran over other considerations, the latest being the controversy over the Raisina Dialogues. We need to now enhance our engagement with Iran which must amongst others focus on both the Chabahar Port and North South Trade Corridor. However, reduction of tensions in the region could lead to a more stable oil market which will be good for India’s energy security. We also need to encash on the positive contribution and goodwill of our diaspora in the region.

The way ahead

The joint statement calls for re-establishing ties and reopening embassies “within a maximum period of two months”. A meeting by both Foreign Ministers is also planned. There are whispers of Iran looking at reviving the 2001 Security Pact and also the broader 1998 Cooperation Agreement between the two countries.

The April 2001 Security Agreement included commitments to fight drug trafficking, crime, terrorism, and money laundering. The May 1998 Cooperation Agreement focused on broader cooperation, including in the economic, commercial, scientific, communications, environmental, and sports sectors. Iran is hoping for Saudi investment and consequent economic benefits of cooperation. The announcement of the deal generated optimism for Iran’s economy. On 17 March the rial had strengthened in value by more than 10 per cent—to 426,200 for one US dollar.

A significant announcement from the recent Saudi Arabia -China meeting was that China would share their expertise and build the Saudi’s a petrochemical industry.

Iran’s Minister of Oil Javad Owji said a day after the announcement that Iran has also defined several major economic projects with China and reached “good contracts and agreements with large Chinese companies, which will be announced in the future.”

But there are conflicting Interests and compromises that need to be discussed. The deal emphasises non-interference in each other’s internal affairs and has the potential to help de-escalate regional conflicts.

Reduction of problems and conflicts in Yemen where there is an uneasy UN negotiated truce since April 2022, Lebanon which has had no President since Michel Auon vacated office in October 2022 and is witnessing a deepening political divide and a worsening economic crisis, Iraq and Syria where it has the potential to hasten the acceptance of Syria into the Arab fold. But can these problems just disappear and does this also underscore China’s desire to play a more active role as an international mediator?

Conclusion

Has the Ukrainian conflict altered the power balance on the world stage? There is now a fundamental shift in the way China is acting in countries where it has invested heavily to show that it matters.

A new realignment is taking place in the Gulf Region while a strategic reconvergence is being witnessed between Russia, China and Iran and now Saudi Arabia which is seeking a leading role for itself at both the regional and international levels. It is converging closer towards them, driven by its economic power and influence. Demonstrating that it is capable of negotiating the delicate balance of a world shifting from unipolarity to multipolarity.

The reconciliation is a major development in international relations and a positive development in the regional security scenario. No matter how complex the challenges or complicated the situation, mutual respect equal dialogue, finds a mutually acceptable solution by working through contradictions. The Saudi Foreign Minister, Prince Faisal bin Farhan, said on Twitter after the announcement “the countries of the region share one fate.”

Complex relations need to be managed so they don’t result in a conflict. The adage that there are ‘no permanent friends or enemies only permanent interests’ rings true. Unfortunately, implementation is more challenging than the deal, as there are a host of issues that involve a major policy shift in entrenched positions by both sides. We need to wait and see the outcome as the two month period outlined in the agreement is not easy to bridge the bitter gulf.

This is the second part of the Iran-Saudi deal series by the author

Read part one – Iran-Saudi Arabia ties: How China’s energy needs led to reconciliation between Tehran and Riyadh courtesy Beijing

The author is a retired Major General of the Indian Army. Views expressed are pe