Since the Iranian Revolution of 1979, Iran and Saudi Arabia have been at odds. Following the Saudi authorities’ execution of a Shia cleric and the Iranian protests in which demonstrators set fire to the Saudi Embassy in Tehran, tensions between Tehran and Riyadh increased even further in 2016. Both nations subsequently discontinued missions and severed diplomatic ties.

A détente agreement between Iran and the Kingdom of Saudi Arabia was mediated by China on March 10, 2023. Within two months, both states committed to resuming diplomatic ties and reopening their embassies. However, prior to that agreement, in 2021, diplomats from Iraq and Oman had been discreetly working behind the scenes to mediate a diplomatic settlement between Saudi Arabia and Iran, longtime rivals. Ultimately, though, there was no indication of an impending breakthrough. However, China has emerged as an international mediator increasing its area of influence in the Middle Eastern Region.

The leadership of Crown Prince Muhammad Bin Salman

Crown Prince Muhammad bin Salman’s leadership is significantly changing the Middle East’s dynamics. Over the past ten years, Riyadh has used coercion to deal with its rivals. Riyadh’s engagement in the Syrian crisis in 2013, airstrikes against the Houthis in Yemen in 2015, the suspension of diplomatic ties with Iran in 2016, the blockade of Qatar in 2017, and other incidents illustrated the confronting stance of Saudi foreign policy. However, in 2021, the embargo on Qatar was lifted as a new decade began. Iran and Riyadh restore diplomatic ties in March 2023, with China serving as a mediator. After twelve years, Bashar Al-Assad received an invitation to the Arab League summit in Riyadh in May 2023. These incidents serve as an indication to the international community that Saudi Arabia, led by Muhammad Bin Salman, is reevaluating its foreign policy, particularly about Iran.

Furthermore, he is involved in transforming the socio-economic and religious fabric of Saudi society. He is playing an important role both on the domestic and international front in modernizing Saudi Arabia and emerging as a reformer. He is picking allies and establishing alliances based on the national interest of Riyadh when it comes to systemic stimuli and altering the dynamics of Saudi society domestically to strengthen its regime have implications on the foreign policy of Saudi Arabia.

Vision 2030

Prioritizing economic concerns for states is domestically driven. Domestically, Saudi Arabia is facing economic challenges and trying to diversify its economy to reduce its dependence on oil revenues. For that matter, Saudi Arabia is promoting Vision 2030, which Crown Prince Muhammad Bin Salman presented in 2016. It aims to open multiple different avenues to generate economic activity which in turn will reduce their reliance on oil income. Saudi Arabia is heavily investing in projects like NEOM – a multi-billion-dollar project. To ensure a conducive environment for foreign investment and secure the infrastructure Riyadh was compelled to normalize its relations with Iran averting any unwanted incidents such as in 2019, two oil facilities of Aramco in Saudi Arabia were targeted by the Houthi rebels. The success of Vision 2030 lies in the stability and peace in the Kingdom as well as in the entire Middle East. That is why, Vision 2030 – a domestic endeavor – has implications for the Saudi foreign policy and it eventually ended up in Tehran-Riyadh détente hoping to end the hostile situation in the entire Middle East.

Nature of Regime

A theocratic monarchy is ruling Saudi Arabia.The Saudi monarchy draws its legitimacy from Wahabism – a strict interpretation of Islam. For centuries, the House of Sauds has made deals with ultra-conservatives as a mean of survival. But today for Muhammad Bin Salman, to strengthen the regime, it is necessary to diversify its economy and move toward moderate Islam in order to avoid any Arab Spring situation or economic turmoil in the future. Interestingly, in the Arab Spring, a mostly young population of states overthrew the unelected rulers. Coincidently, about 63 percent of the Saudi population is under 30 years old. Oil being a limited natural resource would be unable to meet the requirements of the Saudi nation in the near future. To address this issue, he launched an ambitious package of socio-economic reform – Vision 2030. To change the perception of Islamic ideology followed by Riyadh and socio-economic reforms for Saudi society is essential to deepen the roots of the regime further and it comes only with stability and peace in the Kingdom as well as in the region. A domestic factor – the strengthening of the regime – is reflected in the foreign policy response of Saudi Arabia when Iran and Saudi Arabi restored their relations. 

US-China Rivalry

US-China rivalry has both external (international) and internal (domestic for both states) aspects contributing to the peace deal. Internationally, China and the US are engaged in an ongoing struggle to influence world politics. It has been demonstrated that the US is incapable of mediating a settlement that would offer the Gulf region stability, harmony, and peace. In the process of mediating the Iran-Saudi Arabia deal, China has filled the void and established itself as a global peacemaker.

Both Iran and Saudi Arabia are benefiting from US-China rivalry in their own ways. Iran and Saudi Arabia are both experiencing economic difficulties at home. Because of the US sanctions, the former’s economy is severely damaged, while the latter is diversifying. Despite US sanctions on both countries, Iran and China signed a 25-year strategic partnership agreement in March 2021. Along with military cooperation, it includes Chinese investments in important Iranian sectors like energy, telecommunications, infrastructure, and information technology. Following its unilateral exit from the 2015 nuclear agreement, the Trump administration imposed harsh sanctions that blacklisted Iran’s entire financial system. China is now among the main importers of Iranian oil, even in spite of the sanctions. While Saudi Arabia is addressing its economic challenges by unveiling Vision 2030.

However, Riyadh is also broadening the range of its allies it has in terms of trade and security.  Because Joe Biden criticized the Kingdom of Saudi Arabia during his presidential election campaign. Joe Biden’s strong stance against Riyadh was primarily motivated by the brutal killing of Jamal Khashoggi and other human rights violations in the Kingdom. There was no warming of relations between the US and Saudi Arabia after Biden took the oath of President Office. Joe Biden visited Saudi Arabia, but he received a muted reception. As a result, the Saudi leadership wants to diversify its security partners, including China, and has voiced resentment over their bilateral ties. It might be seen in the UN vote against US policy regarding the Russia-Ukraine crisis. Furthermore, China is pursuing the Belt and Road Initiative, while Saudi Arabia is promoting Vision 2030, which Crown Prince Muhammad Bin Salman unveiled in 2016. Tourism is one of the main tenets of Vision 2030. By the end of this decade, Riyadh hopes to bring in $46 billion in tourism revenue. Given that Chinese consumers spent $250 billion on tourism outside of their country in 2019, China may be able to make a contribution in this area. In addition, the Kingdom was China’s main oil supplier in 2022.

They will both share in a better future that brings prosperity and development if China and Saudi Arabia cooperate and make real efforts to advance the Belt and Road Initiative (BRI) and Vision 2030, replace the monopoly held by the United States, and foster harmony and peace in the region.

Conclusion

The normalization of diplomatic relations between Saudi Arabia and Iran has been finalized after secret meetings held in China’s good offices. This historic agreement has the potential to change the Middle East. Both parties would benefit from direct communication and political dialogue to resolve disagreements peacefully. Domestic factors including leaders’ perspectives, economic challenges and the nature of the regime are the driving forces behind the Kingdom of Saudi Arabia to reach a peace deal with its rival – Iran. The US-China rivalry has two aspects international and domestic for both Tehran and Riyadh.  China emerged to grasp the status of peacemaker and mediator between long-time rivals as it comes with prestige, an important characteristic of a great power. China being the emerging power competes with the US to influence international political affairs and it is successful in doing so in the Middle Eastern region. Saudi Arabia would rely less on the US and other Western nations to ensure its security as a result of the peace accord.  As it was struggling to diversify is security and trade partners. For Iran, China has proven to be the economic lifeline after the sanctions imposed by the Trump administration in 2018 hurting its economy badly. Concludingly, the foreign policy response or shift of the Kingdom of Saudi Arabia to the Iran-Saudi Rapprochement is more domestically driven counting on the leadership of Muhammad Bin Salman, economic challenges and the nature of the regime in Riyadh with the interplay of external factors such as US-China rivalry.