4 Key Takeaways From the China-Brokered Saudi-Iran Deal

Every now and again, a preternaturally predictable Middle East offers up something quite unpredictable. The latest is the agreement, brokered in Beijing last week, between Saudi Arabia and Iran to restore diplomatic relations.

For several years after the 2016 rupture in formal relations between the two countries, Iraq and Oman tried unsuccessfully to get these two to restore relations. That China secretly ended up brokering what appears to be a significant mending of ties seems to have surprised just about everybody.

Is this the proverbial game-changer or inflection point? Or is it just another temporary twist in the Byzantine Middle East labyrinth? It’s far too early to tell. For now, here are four important takeaways to ponder, including the rather inconvenient reality that Chinese diplomacy likely left the Biden administration on the outside looking in.

No. 1: No Coming Golden Age in Saudi-Iran Relations

There’s little doubt that what the Chinese brokered is a breakthrough in Saudi-Iran relations and perhaps a harbinger of a more functional and productive relationship. But anyone who believes that we’re on the cusp of a golden era between Tehran and Riyadh should lie down and wait quietly until the feeling passes.

The proximate cause of their rupture in 2016—the Saudi execution of leading Shiite cleric Nimr al-Nimr and the Iranian reaction that saw protesters storm the Saudi Embassy and Iranian Supreme Leader Ayatollah Ali Khamenei vow divine vengeance—masks decades of tensions and bitter rivalries that will not be easily healed.

Yes, there’s a component of the rivalry that cuts to the core of tensions between Persian Shiites and Arab Sunnis. But those traditional identities can’t explain the decades when these two countries competed but also cooperated, and not as bitter rivals. No, the essence of the rivalry is of a more recent vintage and flows from a true inflection point in 1979: when Iran’s Islamic revolution brought to power a leader and regime whose ideology and policies challenged Saudi Arabia, which had long seen itself as the custodian of the two holiest sites in Islam and the unchallenged leader of the Muslim world.

Suddenly, a rival power was promoting a revolutionary Islamic ideology with a very different idea of what the Muslim world should be—and, through its proxies, challenging not only Sunni states but also Western powers’ involvement in the region.

Invariably, Saudi and Iranian interests would clash in Lebanon, Iraq, Yemen, and Syria, where there were significant Shiite populations. But religion was more a tool used to attack the other than the foundation of the rivalry. And the Cold War, where the United States drew closer to Saudi Arabia while Russia drew closer to Iran, further deepened a rivalry that at its heart was a struggle for power, influence, and regime survival.

The fundamental dynamics of that rivalry haven’t changed. As such, it’s likely that the main accomplishment of this accord will be to reduce tensions rather than create any profound transformation in the Iran-Saudi relationship.

A look at the last decade or so in the region should tell you why. Iran and Saudi Arabia clashed during the Arab Spring, with Bahrain accusing Tehran of inciting anti-government demonstrations in the country and turning to Riyadh for military help suppressing them; in Syria, with Iran backing Syrian President Bashar al-Assad’s regime and Saudi Arabia supporting Sunni rebels and jihadists; in Yemen, with Saudi efforts to defeat the Iranian-supported Houthis; and, perhaps most severely, in September 2019, when alleged Iranian drones attacked two Saudi oil facilities.

It strains credulity to the breaking point to believe that conflict reduction can be achieved over such a broad region with so many moving parts by this latest agreement alone. Economic relations will be hampered by Saudi concern about running afoul of U.S. sanctions. And, of course, there’s the unresolved and potentially explosive matter of Iran’s nuclear program, which, if left unchecked, might lead to a Saudi effort to acquire a bomb of its own.

That said, the Saudis have informed Washington that the main result of the accord is that Iran has agreed to stop attacking Saudi interests and supporting anti-Saudi proxies. How long this will last is unclear. But if this is simply a glorified cease-fire without a concerted Iranian-Saudi effort to make things work, it won’t be long.

No. 2: The Biden Administration Was Left on the Sidelines

It’s tempting to see this latest development as round two in what seems like a Saudi campaign to direct its middle finger at the Biden administration. Round one was the highly orchestrated October 2022 decision by OPEC+—driven by Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman—to make a significant cut in oil production several weeks before the U.S. midterm elections.

Mohammed bin Salman’s willingness to allow China, Washington’s greatest international adversary, to broker a rapprochement between Saudi Arabia and Iran, Washington’s greatest regional adversary, at a time when the Biden administration is working to pressure both was no coincidence—and an embarrassment, to boot.

Calling it another middle finger to the United States may be a tad harsh, though. After all, without a relationship with Iran, Washington had no capacity—even if it had the desire—to play this kind of diplomatic game. Still, one gets the feeling at times that while the United States plays checkers, other parties in the region are playing a more sophisticated game of chess.

This neat bit of Chinese diplomacy clearly reflects changing regional alignments between smaller powers and great ones. The Iranian calculation is clear: Pushing back against the Western campaign of sanctions and isolation, it aligns with those players that share a desire to make common cause against the United States. Beijing is an important market for Iranian oil; Iran is soon to become a fellow member of the Shanghai Cooperation Organization (SCO); and, of course, China is an upstanding member of the autocrats club, where violating human rights and repressing citizens at home are requirements for membership.

Because of its long-standing ties with Washington, the Saudi element in this triad is a bit more complicated. Still largely driven by Mohammed bin Salman, the direction of Saudi policy is becoming clearer. The Chinese may be hard-pressed to replace the United States as Riyadh’s primary security partner, but Washington is no longer the North Star around which Saudi Arabia orients its policy. It’s a multipolar world, and the Saudi crown prince has used the other poles (namely Russia and China) to broaden his country’s interests and as leverage with Washington.

After all, why not play the game of nations? Mohammed bin Salman is not about to pull out of Saudi Arabia’s relationship with Russia in OPEC+, and there’s talk of Saudi Arabia joining the SCO. China is now among Saudi Arabia’s largest markets for its oil, with the U.S. Navy—in one of the many Middle East ironies—protecting those exports by keeping sea lanes secure through the Persian Gulf. China has no Congress straining its ties abroad, nor does it ask questions about human rights; and with the threat that Iran poses, Beijing could be a useful counter to preempt or ameliorate a potential crisis.

Fidelity has never mattered much in this part of the world—or any other part, for that matter—when it comes to international relations. As the late Saudi Foreign Minister Saud al-Faisal put it years ago: The U.S.-Saudi relationship is a Muslim marriage, not a Catholic one—meaning more than one wife is permitted. In other words, the Saudis don’t want a divorce from the United States, just marriages with other countries, too.

No. 3: A (Modest) Win for China

China is a winner here, to be sure. How big a winner is another matter. China has been engaged in recent years in an effort to cultivate closer ties to Saudi Arabia—and it is succeeding. Chinese President Xi Jinping’s recent visit to the country last year came with none of the awkwardness and friction of U.S. President Joe Biden’s trip; and, unlike his foray, it wasn’t followed by misunderstandings, feelings of betrayal, and threats by Biden to impose “consequences” for Saudi actions.

Midwifing the Iranian-Saudi diplomatic deal was the first significant piece of diplomacy Beijing has done in the region. It received a huge amount of media attention; and because the Chinese don’t appear to have committed themselves to playing the role of referee or monitor, they have taken on little risk. The agreement calls for an exchange of ambassadors within two months—an eternity in Middle Eastern politics that allows for any number of hiccups. Beijing may well come to experience what the United States has in this region so many times—commitments undertaken by the locals that change or remain unfulfilled.

Still, for now, the benefits outweigh the risks. China has poked the United States, broken out of its COVID-19 isolation, extended its reach politically in a region where U.S. diplomacy has traditionally prevailed, and perhaps eased tensions in an area vital to China’s economic interests. A full 40 percent of its hydrocarbons come out of the Gulf. Beijing has a critical stake in ensuring that the Gulf doesn’t explode, oil keeps flowing, and relations with both Saudi Arabia and Iran improve. Indeed, China’s plan to host a Gulf-Arab summit later this year suggests that Beijing plans to expand its profile even further in a region traditionally dominated by Washington.

No. 4: A Region in Flux

The United States has welcomed the accord, but one can’t help feeling that the Biden administration is annoyed and surprised by the hype China’s diplomacy has received, and by the criticism from those who say that Beijing has stolen a march on the United States and taken advantage of Washington’s acrimonious relationship with Saudi Arabia. Others have argued that, unlike China, the United States can’t be a credible mediator because it has played favorites in both the Iran-Saudi rivalry and in the competition between Israel and Iran.

But the argument that this is a major defeat for the United States is overblown. If the Saudi-Iran deal actually defuses tensions and opens up a pathway to end Yemen’s nightmare, that would be a welcome development. Talk of a U.S. withdrawal from the region or a United States without regional influence is silly.

Washington retains critical economic, security, and political ties with the region’s key players. And neither China nor Russia can yet replace Washington as a key security partner for both Israel and Arab countries alike. Indeed, in the past week the Wall Street Journal carried a fascinating report about the prospects for an Israeli-Saudi normalization package, with the Saudis laying out what they’d need not from China but from the United States to normalize with Israel.

There’s no doubt that the United States’ relationship with the region is changing, though. The disastrous U.S. experiences in Iraq and Afghanistan, a recalibration of resources and politics to meet the rising challenges in the Indo-Pacific, a growing sense that what ails the Middle East is beyond U.S. capacity to repair, and America’s own domestic dysfunction have led to a downsizing of the region’s centrality in U.S. priorities and opened up new opportunities for both China and Russia. Regional parties, too—especially Israel and the Gulf states, concerned about U.S. retrenchment—have drawn closer together.

China’s brokering of the Iran-Saudi deal is emblematic of a regional realignment that no longer sees the United States as the only party in its calculations. It may be tough for the great power to accept and harder for it to readjust. But it may have no choice. The Middle East souk is now open for business in a way it’s never quite been before, and the United States isn’t the only customer.