Will the Iran-Saudi Deal Last?

Does a peaceful collaboration between Riyadh and Tehran have the ability to triumph in the long run? China sure hopes so.

Published: Jul 2, 2023  |  

Researcher and writer focusing on conflict in Asia and Middle East


On March 10, 2023, an unlikely convergence occurred as China emerged as a catalyst in brokering a diplomatic agreement between Iran and Saudi Arabia. Having obtained the role of a neutral referee, China orchestrated a paradigm shift in the geopolitics of the Middle East, effectively securing a victorious outcome. Through this groundbreaking deal, Iran and Saudi Arabia, as prominent regional actors, decided momentarily to set aside their ideological differences, sending a powerful message of peace resonating throughout the Middle East.

Considering the prevailing condition, the durability of the deal between Tehran and Riyadh, who have been engaged in a decades-long conflict, is a subject of speculation. Additionally, concerns arise regarding China’s role as a mediator for the first time in navigating the intricate power dynamics and complexities between these two influential regional players. The effectiveness of China’s involvement in bringing about a sustainable resolution is clouded by precariousness and raises doubts about the agreement’s ability to withstand the test of time and accomplish lasting outcomes.  

Key aspects for sustaining the endurance of this treaty 

For a deal to endure, it must serve the interests of all parties involved. In this case, the benefits of this deal would extend not only to Iran and Saudi Arabia but also align with China’s own objectives. This strengthens the argument for the potential long-term viability of the agreement.

Chinese involvement, highlighting the intertwining of commercial interests with significant political implications in the Gulf region.  China’s growing energy demands have driven an increase in crude oil imports from the GCC, accounting for 40% of hydrocarbon imports from the region, primarily with Saudi Arabia being the dominant exporter in addition to Oman and the United Arab Emirates. Eventually, the Chinese became more attentive to the tension in the gulf; its investments in Saudi Arabia have grown substantially over the past two decades. Thus any instability in this region, supposing the Iran-Saudi standoff, may not be affordable for China.

In addition, amidst a changing geopolitical landscape, the reorientation of U.S. foreign policy towards the Indo-Pacific region has led Riyadh to perceive a potential lack of support from Washington in safeguarding its integrity. Instances such as the Houthi rebel attacks on Saudi oil facilities, backed by Iran, and Iran’s continuous threats to Saudi national integrity, have left Riyadh dissatisfied with the response it received from Washington. Consequently, Saudi Arabia has been compelled to forge ties with its greatest ideological and strategic rival, Iran, as it finds itself with limited options available. For Saudi, in the realm of commerce, China is the largest market to export oil and there is also a chance to join the Shanghai Cooperation Organization, which could be an alternative avenue for regional cooperation and influence. 

Similarly, in the case of Iran, the prolonged struggle against sanctions and isolation has left no viable alternative but to hold onto the deal. With a series of incidents, crackdowns on protestors, turmoil within the nation, and successive waves of sanctions, Iran’s GDP has plummeted by nearly half, dropping from US$644 billion to US$360 billion over the past decade. Given this challenging situation, the agreement not only aims to resolve conflicts but also presents a window of opportunity for both parties to foster cross-border investments, and partnerships, promote transit, increase petroleum exports, and collaborate in the energy sector.

Moreover, Saudi Arabia has already expressed its readiness to invest in Iran, as highlighted by the Saudi Finance Minister. And on June 6th of this month, following the developments, Iran took the significant step of reopening its embassy for the first time in seven years, reaffirming its commitment to maintaining diplomatic and economic relations. Unless no sudden misery happens, Iran has no way of going to the flip side of the deal. 

What makes it fragile?

Although the treaty has temporarily alleviated tensions in the Gulf, it has yet to bring about any significant transformation. Even China, with its involvement in the region, cannot ensure long-term stability. Beijing’s presence acts as a game changer, but it also creates tensions as it sidelines the Biden administration. Additionally, the commercial relationship with the Gulf region raises concerns regarding trust-building mechanisms, the safety of oil facilities, and shipping lanes. But concern arises about how Iran and Saudi view each other, and relational factors, on which a long-lasting peace may be established.

For Saudi Arabia, the past issue of setting fire to the Saudi embassy in Tehran by Iranian mobs, the Iranian attack on oil facilities, and the war against Houthi rebels in Yemen, may still be in vain. Additionally, following Donald Trump’s unilateral withdrawal of Washington from the JCPOA agreement, Iran resumed its nuclear program. This move is perceived by both Saudi Arabia and Israel as a direct threat to sovereignty. As a result, there is ongoing debate regarding Riyadh’s willingness to adhere to the agreement, especially considering Tehran’s unwavering determination to achieve its nuclear ambitions.

On the other hand, the normalization of Saudi-Iran relations presents a significant challenge to Israel. Tel Aviv’s aspirations to weaken Iran through a Sunni alliance may suffer setbacks due to this agreement. Israel cannot afford to simply watch as its ambitions to counter Iran with the support of Sunni nations crumble. Yeol Guzansky, an expert on the Persian Gulf at the Institute for National Security Studies, says, “If you see the Middle East as a zero-sum game, which Israel and Iran do, a diplomatic win for Iran is very bad news for Israel.” Despite Iran’s claims that the détente will not hinder progress, it introduces potential complications and raises concerns about Israel’s national security and regional influence.

Yet, in the midst of numerous complex dynamics in the region, it is clear that peace cannot be achieved in isolation. However, the treaty emerges as a truly remarkable achievement. Consequently, a decade plagued by hunger, poverty, and humanitarian catastrophe is now transitioning towards a future of peace and prosperity. Notably, the Gulf, known for its oil exports and history of tensions, has become open for business in a remarkable manner. 

Through the formation of a robust coalition, the implementation of a well-structured plan, and a genuine willingness to cooperate, this treaty has the potential to endure and shape history. 

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