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

A major rapprochement between two estranged powers, Iran and Saudi Arabia traditional rivals and among the biggest oil producers who have been on opposite sides on a host of issues and are politically polarised took place on 10 March 2023. It was an unexpected development in a fraught relationship with ideological, spiritual and sectarian differences and bringing together a fractured Islamic world where many different divisions existed. We now see a convergence of interests.

The essence has been in the making. Talks first began in April 2020 initially in Iraq and Oman. Five rounds were facilitated by prime minister Mustafa al-Kadhimi, but then, however, Iraqi politics had intruded. Kadhimi was gone in October 2022 and Prime Minister Mohammed Shia al-Sudani showed little interest in continuing Iraq’s role as a mediator. He also did not enjoy the same level of Saudi trust as his predecessor.

Apparently frustrated by the pause, Saudi Arabia asked China to assume a mediator’s role when President Xi Jinping visited Riyadh in December 2022. In February 2023, Iranian President Ebrahim Raisi visited China and met President Xi and the proposal for a resumption of ties were discussed. The talks were then elevated talks from the regional level with China as the host.  As a result, the pathbreaking deal was signed in Beijing. China played a major role and Wang Yi called it a ‘Victory for Dialogue, Victory for Peace.’

Iran and Saudi Arabia have been trying to mend a break in relations that occurred in 2016 after Iranian protestors seized Saudi diplomatic missions in Tehran and Mashhad in retaliation for the execution of prominent Saudi Shiite opposition cleric Sheikh Nimr al-Nimr. Iran then cancelled the Haj Pilgrimage as the troubled relationship reached a new low.

Level of tensions between two countries that have been at loggerheads since the Iranian Revolution in 1979 is high. Saudi Arabia supported Iraq in the War of Revolution. Lately, the Iranians also felt the US withdrawal from JCPOA in 2018 was due to Israeli and Saudi Arabian pressure. Saudi Arabia accused Iran of “taking advantage of the revenue generated by the lifting of the sanctions to destabilize the region.” In Yemen, Iran supported Houthi rebels, though there is an uneasy truce presently, Iran was attributed to providing weapons that have been fired on Saudi’s Aramco refineries. During the Arab Spring they were suspected of inciting protests in Bahrain.

In return for Iranian re-implementation of prior assurances of non-interference in Saudi internal affairs, Iran demanded that Saudi Arabia stop funding Iran International, a Persian-language news channel that gives a platform to opponents of the Islamic Republic, their coverage of the protests. Iran believes it is responsible for fomenting unrest across the country for the past five months.

They want the Saudis to withdraw completely from Yemen and recognise the Ansarallah (Houthi) movement as a legitimate authority in the war-torn country. They also asked Riyadh to stop supporting Iranian opposition groups including the Mujahedin-e Khalq, the ethnic Arab group Al-Ahvaziya, and the Baloch militant group Jaish al-Adl. Iran considers all three terrorist organizations. In addition, Iran asked Saudi Arabia to ease the pressure on its Shiite minority and allow members to visit the Iranian Shiite holy city of Mashhad.

Reasons for rapprochement

Iran was approaching a high level of enrichment, with the JCPOA talks going nowhere, it feared a US–Israeli strike on its facilities. The deal will now diminish the threat of military action against it. On the other hand, Saudi Arabia’s agreement with Iran appears to be an attempt to stay out of the fray in case of a conflict.

Further, Iran was facing an increasingly regional and global isolation due to the sanctions imposed on it. It aims to thwart growing Western pressure by diversifying its options, it’s with this in mind that it normalised relations with UAE recently. Iran has now pushed back on its regional isolation without changes in its policies. Although it has adopted a “look to the East” policy in recent years in part to compensate for US and European sanctions and is seen as part of an emerging Russia and China axis its relations in the region with Saudi Arabia would help reduce its isolation.

Saudi Arabia showed signs of being frustrated with the US particularly the Democrats after the JCPOA was signed in 2015 and now due to President Biden’s perceived attitude to the region. Crown Prince MBS felt he has been targeted over the murder of Jamal Khashoggi in October 2018. In 2021 the US also disclosed a report on 9/11 that potentially implicated Saudi Arabia.

In 2019, following an Iranian attack on Saudi Arabia’s Abqaiq oil facilities, many Saudis felt that the US government did not retaliate on their behalf. The realisation dawned that Saudi Arabia was on its own and would never enjoy Israel-like security guarantees from Washington

They felt the need to diversify their security partners. The signs were visible, the United States had accused Saudi Arabia of siding with Russia when OPEC+ decided to cut oil production over Washington’s objection. The US-Saudi relationship notably soured.

President Biden’s visit to Saudi Arabia in July 2022, failed to get them to increase oil production with a view to squeezing Russian oil revenues. While they have largely supported UN General Assembly resolutions, they have not joined in implementing sanctions against Moscow or other policies aimed at squeezing Russia. The Minister of Foreign Affairs Prince Faisal bin Farhan Al Saud also travelled to Moscow on 08 March 2023, where he met with his Russian counterpart, Sergey Lavrov.

Surprisingly, earlier in November 2022, Saudi Arabia had complained to the US that Iran was planning a missile strike against it. It wants to develop a Foreign Policy independent of the West and focus on its own nuclear programme. They are also seeing a new security matrices in China and Russia.

As per Gerald Feierstein, a former US Ambassador to Yemen, “The Saudis have emphasised in recent years that they seek to avoid entanglement in what is referred to in the US as ‘great power competition’. Their interests, have focused on maintaining strong relations with their main security partner, the US; their number one economic partner, China and their key partner in OPEC+, Russia.”

China is viewed as a neutral party, with strong ties to both Saudi Arabia, China’s largest oil supplier, and Iran, which relies on China for 30 per cent of its foreign trade and where China has pledged to invest $400 billion over 25 years. Iran, which has few export markets owing to crippling sanctions over its nuclear and facing high inflation sells oil to China at a steep discount. It has traded in the region of over $100 billion.

China needs to balance its key energy suppliers and maintain its friendship with both Iran and Saudi Arabia. It has high stakes in regional stability. China has major investments in Iran, with whom it has a 25-year Strategic Partnership with investments of $400 billion and the BRI runs through the region. Their economic interests in the region which include energy, trade, investments, and technology are paying off, and it is in this interest to have both Iran and Saudi Arabia as friends. President Riasi reportedly raised concerns about China supplying Saudi Arabia with ballistic missiles.

Has China moved outside its traditional role and now in the centre of global politics on the world stage? It is now a geostrategic force to be reckoned with. Further its easier for them to deal with these countries as they do not remark on their internal affairs such as human rights and women empowerment issues be it the hijab issue in Iran or the killing of Jamal Khashoggi by Saudi Arabia. Their focus is on a strategic partnership with Iran and economic relationship with Saudi Arabia. No doubt the trilateral engagement is seen as a triumph for China.

The US was not part of the negotiations. US–Saudi ties ever since the 1945 meeting between president Franklin Roosevelt and King Abdul Aziz ibn Saud, have hinged on energy for the US, and provision of security to Saudi Arabia, both countries agreed to disagree on Palestine.

US sees itself as the dominant superpower in the region. It has dominated the diplomatic space globally. Now things are looking different, it was indispensable in the region but could not have brokered this deal in view of its friendship with Israel and animosity with Iran with whom it has no diplomatic ties since 1979.

Their disinterest in the region has been visible since its failure in Iraq and is being viewed as an unreliable partner since its exit from Iraq and Afghanistan which has created opportunities for the countries in the region to come together.

President Obama’s ‘pivot to Asia’ focussed on the rise of China and its expansionism in Indo-Pacific and now with the Ukrainian conflict the US is back to being Eurocentric. The deal is thus seen as a setback for the US in the region. But does this deal to fly in the face of the order they have been trying to create?

To quote Antony Blinken, the US Secretary of State during a visit to Ethiopia, “If this agreement actually bears out, and particularly if Iran follows through on the commitments that it’s apparently made, again, that would be positive”. He added; “From our perspective, anything that can help reduce tensions, avoid conflict, and curb in any way dangerous or destabilizing actions by Iran is a good thing.”

Israel’s concerns

While the deal is welcomed across the Middle East, for Israel, the Saudi Arabia-Iran rapprochement will come at a strategic price, with regional and international dimensions. It will be a setback for Abrahams Accord. Prime Minister Benjamin Netanyahu has been tough on Iran and has repeatedly stated that their nuclear programme threatens regional stability. He was heavily invested in improving ties with Saudi Arabia while sustaining offensives against Iran.

Israel was building an Arab Alliance against Iran but with both UAE and Saudi Arabia now developing relations with Iran this seems to be in jeopardy. Iran is no longer the glue for them to develop closer ties with Israel. This deal has now eroded; Israel’s attempts to court an Arab ally against Iran by driving a wedge into the proposed alliance.

At the same time, Israel fears that the agreement could pave the way for a resolution to the war in Yemen which presented an opportunity for Israel to increase its influence in the Red Sea and the Arabian Sea and the deal risks hindering its efforts to establish a military foothold in the region. Extracting itself from Yemen where it has been involved since 2015 is no doubt high on Saudi Arabian priorities,

Another concern for Israel is a potential new Taif Agreement in Lebanon, whose parties could be Saudi Arabia and Iran, guaranteeing the stability of the Lebanese regime and economy. Lebanon is now part of an exclusive club, the others being Dominica, Equatorial Guinea, Gabon, South Sudan and Venezuela who lost their UN voting rights for being at least two years in arrears with their contributions. Lebanon’s collapse has been in Israel’s interests.

Conclusion

China has stepped into the power vacuum by leveraging its ties and is positioning itself to become a significant player in West Asia where it has major geo-economic interests. China is presenting itself as a force for peace in the world, a role that used to be played by the US. It is however the desire for a stable security architecture that is getting the two major protagonists closer together.

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

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