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On 10 March, representatives of Iran and Saudi Arabia, who had been meeting secretly for five days in the Chinese capital Beijing, announced a Chinese-sponsored agreement to restore diplomatic relations between the two countries. Tensions between the regional rivals date back more than four decades, persisting at lower levels through an earlier period of dtente in the 1990s and then heightening in the past two decades. Riyadh formally severed ties with Tehran seven years ago. The countries effort to mend fences was public knowledge Iraq and Oman had hosted previous rounds of talks between Iranian and Saudi officials but Chinas role in midwifing the accord was unforeseen, as was the speed with which the rapprochement has proceeded. The degree to which the Joint Trilateral Statement issued by the three countries augurs a geopolitical shift that will see China assume a larger role in a region where the United States has long been dominant remains uncertain.

An equally important question is whether and to what extent the Beijing agreement will contribute to managing, or even resolving, conflicts elsewhere in the Middle East. The competing regional agendas of Riyadh and Tehran have compounded devastating wars in Yemen and Syria, and continue to fuel instability in Lebanon and Iraq. Several Gulf Arab states have long been concerned about direct threats from, or even attacks by, Iranian proxies, as well as alleged Iranian support for dissident movements. Israel, meanwhile, sees Irans nuclear program as an existential threat. From its side, Tehran accuses Israel of sabotaging its nuclear program, and Saudi Arabia of backing ethnic opposition groups in Kordestan, Baluchistan and other troubled provinces, along with hostile Iranian diaspora media.

While reducing the intensity of regional competition may help redirect political energy to the core internal conflicts, the prospect of swift solutions remains slim.

In this survey, Crisis Group analysts based in the Middle East present local perspectives on the Saudi-Iranian agreement and its impact on the regions wars and crises. The bottom-line conclusion is that while reducing the intensity of regional competition may help redirect political energy to the core internal conflicts, the prospect of swift solutions remains slim. The Iranian-Saudi rapprochement may lessen Gulf Arab states security concerns. But it does not diminish the risk of a crisis triggered by Irans rapidly advancing nuclear program and the threat it poses, in particular for Israel, but also for some of Irans neighbours, including Saudi Arabia.

Gulf Arab States

The Saudi-Iranian agreement provides a roadmap for re-establishing diplomatic ties within two months. If all goes well, it could reduce the intense hostility that has existed between the two countries for the better part of a decade. For now, the agreements rollout appears to be proceeding apace: King Salman of Saudi Arabia invited Irans President Ebrahim Raisi to Riyadh, and the two countries foreign ministers met in Beijing on 6 April. A senior Saudi official told Crisis Group that Riyadh wants to build on the momentum generated by the success of the Beijing talks, while the Saudi finance minister indicated that the country was prepared to start investing in Iran very quickly. Both countries sent technical delegations in preparation for reopening their respective embassies, suggesting that the two-month timeline is on track.

Beyond improving bilateral relations, the agreement may also help lessen tensions in the broader Gulf region. Officials in the United Arab Emirates, Kuwait and Oman all lauded the deal as a move toward stability and prosperity that will benefit all sides. A senior Qatari official told Crisis Group that the accord was a positive first step, but that Saudi Arabia would need time to regain a degree of trust in Iranian intentions after years of enmity. Even Bahrain notoriously wary of engaging Iran issued a statement welcoming the agreement and expressing hope for resolution of conflicts through dialogue and diplomacy.

Relations between Gulf Arab countries and Iran had already improved significantly over the last two years. The recent rupture between Iran and these states can be traced to January 2016, when Iranian protesters stormed the Saudi embassy in Tehran after Riyadh ordered the execution of Shiite cleric Nimr al-Nimr, a prominent dissident in the kingdom. All the Gulf Arab countries (except Oman) then downgraded or cut ties with Iran. In the succeeding years, Oman, Qatar and sometimes also Kuwait continued to engage with Tehran, even as tensions remained high. In contrast, Saudi Arabia, the United Arab Emirates (UAE) and Bahrain supported U.S. President Donald Trumps maximum pressure campaign, which included over 1,500 new sanctions and belligerent rhetoric, all aimed at isolating and weakening Iran. Today, all the Gulf Arab states, with the exception of Bahrain, have restored or plan to restore full diplomatic relations with Iran. Even Manama, which has long accused Tehran of fomenting unrest among Bahrains Shiite majority population, reportedly held bilateral talks with Iran in recent months. Soon after the announcement of the Saudi-Iranian deal, Irans Supreme National Security Council secretary, Ali Shamkhani, met with top security and economic officials in the UAE, suggesting an acceleration and widening of UAE-Iran relations.

The litmus test for the deals success will be whether the sides keep interfering in the domestic politics of countries across the region.

The litmus test for the deals success will be whether the sides keep interfering in the domestic politics of countries across the region. Riyadh has long complained about Iranian support for militant groups across the region and alleged Iranian attempts to stir up rebellion among Saudi Arabias minority Shiite population. Likewise, Iran has accused the Gulf Arab states of facilitating the presence of the U.S. and Israel on its doorstep. There are two obvious first steps Iran and Saudi Arabia can undertake to demonstrate their commitment to non-interference, both of which the two countries reportedly agreed to as part of the deal itself. Saudi Arabia reportedly said it would curb its support for media networks that have agitated against the Iranian regime, while Iran reportedly said it would curtail arms shipments to Huthi rebels in Yemen.

The deal could also help open the door to a security dialogue among the Gulf Arab states, Iran and Iraq. Some of the smaller Gulf Arab states had previously been reticent about expanding their engagement with Tehran if Riyadh did not first mend ties, so in that sense the deal opens the door to wider discussions. Such a dialogue could be a venue for states to discuss and develop ways to address their primary security concerns, particularly in the Gulf itself. It might have a salutary impact on the war in Yemen and potentially even, over time, in other arenas. China has reportedly offered to host a meeting between the Gulf states and Iran in Beijing sometime later in 2023. A senior Saudi official told Crisis Group that such a meeting would be logical, but that nothing has been agreed to as of yet.

Iraq

The Saudi-Iranian deal has the potential to lower tensions in Iraq. Baghdad has for some time been trying to bring its two assertive neighbours closer together. Iran is the bigger of the two its border with Iraq is twice as long as Saudi Arabias and it enjoys close religious, economic and cultural ties with many Iraqis. It has substantial political clout as well: Tehran exploited the chaos following the 2003 U.S. invasion of Iraq to spread its influence, especially among the majority Shiite population and the ruling Islamist parties representing them. What is more, Irans Islamic Revolutionary Guard Corps supports a number of armed groups that operate outside the Iraqi states full control. These groups have periodically fired rockets at residual U.S. forces in the country, and they may be responsible for attacks on Saudi Arabia in 2019 and 2021.

Iraqi Sunnis, by contrast, historically hold tribal, trade and religious ties with Saudi Arabia. Riyadh has exercised the relatively little influence it wields in Iraq mainly through Sunni tribes as well as political parties that have been subordinate partners in post-2003 power-sharing governments. While Saudi Arabia has not been party to the conflict that has pitted Iran-backed paramilitaries against the U.S., it has found the overall security situation, especially the presence of Iran-sponsored groups near its own 800km border with Iraq, threatening to its interests.

A Saudi-Iranian dtente may ... remove political obstacles that have stood in the way of substantial Saudi investment in Iraq.

To lower the temperature, Baghdad has undertaken efforts to reposition Iraq as an arena for regional dialogue rather than proxy confrontation. Various Iraqi politicians have called for better relations between Saudi Arabia and Iran. In particular, Mustafa al-Kadhimi, Iraqs prime minister from 2020 to 2022, tapped the connections he acquired as former intelligence chief to bring Iranian and Saudi representatives to Baghdad for five rounds of direct talks during his tenure. Those negotiations were essential in clarifying both sides concerns and building a practice of regular dialogue that paved the way for the Beijing meeting. Under Prime Minister Mohammed Shia al-Sudani, Iraq has tried to cement its ties with Saudi Arabia. In late February, interior ministry officials from Saudi Arabia and Iraq signed a memorandum of understanding to strengthen security cooperation, and in January, Iraqs southern city of Basra hosted the 25th Arabian Gulf Cup football tournament, prompting an influx of Gulf visitors that the country had not experienced in years. A Saudi-Iranian dtente may also remove political obstacles that have stood in the way of substantial Saudi investment in Iraq.

Views from Iraq are mixed. Many Iraqis remain sceptical that Iran is prepared to make significant changes to its longstanding policies in Iraq, much less end its interference in domestic politics. In addition, while some new political parties and independents welcome the Saudi-Iranian dtente and its potential to reduce harmful regional tensions, others caution that increased coordination with and potential investment in Iraq by Saudi Arabia would only benefit the ruling elite and strengthen their grip on power, further fuelling already widespread popular anger at the political class. Others fear that continued tension between Iran and the U.S., for instance over Irans nuclear program and the continuing (though much reduced) U.S. military presence in Iraq, may again lead to violence by paramilitary groups. The Saudi-Iranian deal was in part motivated by Riyadh wanting to protect itself in the event of escalating U.S.-Iran tensions, but such violence would still make it difficult for Riyadh to continue to engage with Baghdad.

Israel

Israels political leadership across the board sees Iran, especially its nuclear program, as the main strategic threat to the Jewish state, and has sought to counter it through international sanctions and diplomatic isolation, as well as a credible military threat. To this end, Israel prefers cooperation with the West and Gulf Arab states, but it also projects determination to act alone if required.

On the whole, Israelis view the deal with concern. Israeli officials fret that the Saudi-Iranian deal may set back Israels efforts to build a regional anti-Iran coalition, a main driver of the Abraham Accords, and Israels determination to add Saudi Arabia to the countries with which it normalises ties. They find the prospect of a significantly less prominent U.S. role in the region especially concerning, particularly because China, which has thrown a political and economic lifeline to Tehran over the past few years, may fill the ensuing vacuum. Saudi Arabias recent move to become a dialogue partner of the Shanghai Cooperation Organisation, in which Iran has observer status, can only add to Israels anxiety, as does the kingdoms recent decision to host a Hamas delegation, after years of friction. The Saudi-Iranian agreement comes following rocket fire at Israel from Gaza, as well as from Lebanon and Syria, which was reportedly coordinated by Iran, raising Israels concern that the Beijing accord emboldened Iran and its non-state allies.

It is unclear how Israel will react. A growing sense of isolation could push Israeli leaders to ratchet up their threats to act against Irans nuclear program. Yet the promise of at least short-term regional quiet resulting from a Saudi-Iranian rapprochement would make unilateral Israeli strikes harder for Israel to justify. Moreover, Israels longstanding effort to confront Iran in general and undermine the 2015 nuclear deal in particular arguably has backfired, as it contributed, together with the U.S. withdrawal from the deal and Trumps maximum pressure strategy, to Iranian decisions to move even closer to acquiring nuclear weapons capability. Add the fact that Israeli policymakers are preoccupied with turmoil closer to home demonstrations against the governments attempts to weaken the Israeli Supreme Court and incursions into the West Bank to rein in Palestinian armed groups and they may have little time to formulate an effective response to the Saudi-Iranian deal.

Israel and the U.S. have both indicated that they do not see the Iranian-Saudi dtente as an impediment to improving Israeli-Saudi ties.

That said, even if relations between Saudi Arabia and Iran improve, a core foreign policy goal for Prime Minister Benjamin Netanyahu will continue to be normalisation of relations with the kingdom. For Israel, it is not a zero-sum game. Israel and the U.S. have both indicated that they do not see the Iranian-Saudi dtente as an impediment to improving Israeli-Saudi ties, even if such a development seems far off for now. Indeed, if obstacles lie on that path, they come not from Iran but from demands the Saudis have made of the U.S. in exchange for normalisation with Israel and from the far-right Israeli governments anti-Palestinian actions and rhetoric. Riyadhs price for normalisation includes security guarantees and support from Washington in developing a civilian nuclear program, but Israels treatment of Palestinians, particularly incidents like the Israeli security forces recent attacks on Muslim worshippers in the al-Asqa Mosque, still looms large, raising the political cost of normalisation for Saudi leaders.

Lebanon

The Saudi-Iranian rivalry has been a major, though far from the only, hurdle to forging a compromise in Lebanon that would allow the countrys political elites to meaningfully address the devastating crisis that has ravaged its economy since late 2019, when a broad protest movement erupted against the entire political class.

Lebanon has stumbled into yet another era of state paralysis amid deep polarisation between two political camps. One is led by Hizbollah (and therefore representative of Irans regional influence), while Saudi Arabia at least partially supports the other. These external actors, through their alliances with major Lebanese players, have made it particularly difficult to forge a compromise and create a functional government. For the past five months, Lebanon has been without a president; its caretaker government dominated by Hizbollah barely manages to meet; and parliament has stopped legislating indefinitely.

Both sides of the divide have mixed feelings about the Saudi-Iranian deal. Politicians and analysts from both camps appear cautiously optimistic that the Beijing agreement could eventually facilitate a resolution to Lebanons domestic crisis on terms favourable to them. At the same time, there is consensus that, at least for now, neither Iran nor Saudi Arabia will devote much attention to Lebanon compared with, for example, Yemen or Iraq.

[Hizbollah] express satisfaction with what they see as an end to Irans international isolation and to Saudi Arabias apparently unshakeable alignment with U.S. policies.

Those on Hizbollahs side express satisfaction with what they see as an end to Irans international isolation and to Saudi Arabias apparently unshakeable alignment with U.S. policies. In their reading, Riyadhs interest in curbing regional confrontation will also make its Lebanese allies in particular the Sunni community, which traditionally looks to Saudi Arabia for political guidance, and the Lebanese Forces, a major Christian political party more amenable to compromise. Some even evince hope, though almost certainly unrealistically, that Saudi support for rehabilitating Syrian President Bashar al-Assads regime will partially restore Syrias former role as a power broker in Lebanon, with favourable results for Hizbollah and its allies.

For their part, those opposed to Hizbollah are hopeful that Iran and Saudi Arabias mutual stated commitment to respecting the principles of state sovereignty will translate into Iran scaling back its interference in Lebanese political life. One opposition party official told Crisis Group that Tehran will need to honour this pledge precisely because it relies so heavily on Beijing, the agreements broker, as an economic and political lifeline. The argument follows that Iran will be obliged to bow to Saudi concerns eventually also in Lebanon to realise the gains offered to it under the accord.

For now, however, neither side appears to have budged on the question of who should be Lebanons president. A Hizbollah-aligned analyst expected that, under the Beijing agreement, Saudi Arabia and Iran would move toward controlled competition rather than peaceful cooperation. In a speech on 14 April, Hizbollahs Secretary General Hassan Nasrallah projected confidence that the regional balance of power has shifted in favour of Iran and its allies. Such assessments make it unlikely that Hizbollah will countenance serious political concessions, such as dropping its support for the presidential aspirations of Suleiman Frangieh, the scion of a Christian political dynasty who is a close friend of Assad. Other Lebanese party leaders oppose Frangieh because they see him as Hizbollahs puppet. Saudi Arabia, for its part, reportedly renewed its categorical objection to Frangieh on 18 March, more than a week after the agreements announcement, when it rebuffed a French-led proposal to pair him with a reformist prime minister acceptable to Riyadh and Hizbollahs Lebanese opponents.

Even if a Saudi-Iranian dtente were to pave the way to resolving Lebanons presidential deadlock, a breakthrough in addressing the countrys economic meltdown would remain unlikely. The old model for Lebanon, under which Saudi Arabia [injected] capital to bail [us] out, is finished, a representative of a party that emerged from the 2019 protest movement told Crisis Group. Would the mere election of a president help solve the economic crisis? Of course not.

Syria

The Iran-Saudi deal comes three years into the longest ceasefire in Syrias civil war. Front lines across the country have stabilised since March 2020, when a deal brokered by Russia and Trkiye ended the regimes offensive in the last rebel bastion, Idlib province in the north west. The ceasefire left space for the rebel faction Heiat Tahrir al-Sham (a former al-Qaeda affiliate that has cut ties with the global movement but remains internationally designated as a terrorist group) to consolidate its control over Idlib. Turkish-backed factions the remnants of the Syrian opposition that previously enjoyed Arab and Western support remain confined to a strip of land along the Turkish border. Meanwhile the U.S.-backed, predominantly Kurdish Syrian Democratic Forces in north-eastern Syria continue their anti-Islamic State campaign while engaging in tit-for-tat skirmishes with Trkiye.

On the ground, people express different views about how the Iran-Saudi deal might shape the conflict, particularly in terms of relations between Damascus, which Iran backs, and Gulf Arab states, which for years supported rebel factions. A Syrian politician in Damascus contacted by Crisis Group appeared buoyant about the prospect that China would expand its role in the Middle East to Washingtons detriment. He blamed the U.S. for years of acrimony between Tehran and Riyadh, which he saw as exacerbating the conflict in Syria. He particularly expressed appreciation of Saudi Crown Prince Mohammed bin Salman as a modernising leader no longer willing to do Washingtons bidding, as well as hope that the Saudi-Iranian agreement will pave the way for full restoration of ties between Damascus and Gulf Arab states that would lead to significant economic investment in Syria. By contrast, an opposition figure questioned the regimes ability to address issues that are pressing for Gulf Arab countries, in particular Syrias role as a hub for the production and smuggling of the synthetic drug Captagon, since the drug business is allegedly a major source of funds for powerful regime clients and regime-aligned militias.

The Iranian-Saudi deal looks as though it may speed up normalisation of relations between the Syrian regime and some Arab governments.

In reality, the Iranian-Saudi deal looks as though it may speed up normalisation of relations between the Syrian regime and some Arab governments. These efforts, which Moscow has backed, had faltered on Damascus refusal to compromise on key issues, such as safe return of refugees, accommodation of parts of the opposition, and refusal to remove Iranian and Hizbollah forces from Syria. But in the aftermath of the Chinese-brokered Saudi-Iranian agreement, Riyadh has signalled readiness to normalise relations with the Syrian regime unconditionally a move that was much rumoured beforehand but likely accelerated by the Beijing deal. On 1 April, news broke that Syria was also in advanced talks with Egypt to restore diplomatic relations, as the two countries foreign ministers met in Cairo.

That said, several capitals, including Cairo, Doha, Rabat and Sanaa, are holding out, making it unlikely for now that the Arab League will restore Syrias membership, which was suspended in 2011. At a 16 April meeting of Arab foreign ministers in Jeddah, Saudi Arabia, several countries ministers appeared wary of Syrias insistence on unconditional normalisation and continued hosting of Iranian forces. The meeting ended without a clear agreement among participants.

Little suggests that diplomatic normalisation between Damascus and some Arab governments will initiate a dynamic toward resolution of the conflict. Iran still views Syria as a key piece of its axis of resistance to Israel, using the country to store, manufacture and transport missiles and high-tech military equipment to Hizbollah and its Syrian proxies. A dtente with Saudi Arabia is therefore unlikely to affect Irans Syria activities, which will remain an issue for Arab and Western countries alike. Saudi Arabia no longer wields any real influence over any major actor in Syria, and there is no sign that Riyadh seeks to marshal better relations with Tehran to nudge the regime into concessions that could lead to a political solution for the conflict that, in turn, could pave the way for the easing of Western sanctions. More broadly, no political settlement for now appears to be plausible, given that it is almost impossible to imagine the main protagonists the regime, Heiat Tahrir al-Sham in the north west and Kurdish forces in the north east reaching an accommodation.

Nor does rapprochement between Damascus and other Arab capitals seem likely to trigger a significant financial engagement by wealthy Gulf Arab countries that could restore Syrias destroyed infrastructure and alleviate extremely dire living conditions. As Crisis Group research in Aleppo has shown, regime-aligned actors predatory behaviour, coupled with U.S. sanctions and the Assad regimes pariah status, make Syria a forbidding environment for investors. The net effect is that the Syrian economy will probably remain in its current abysmal state.

Yemen

The Saudi-Iranian deal coincided with the eighth anniversary of a Saudi-led coalition's military intervention in Yemen to dislodge the insurgent group Ansar Allah, better known as the Huthis, which enjoys Iranian support. The campaign turned out to be an expensive failure for Saudi Arabia. It achieved neither of its declared goals defeating the Huthis and restoring the government of Abed Rabbo Mansour Hadi, the internationally recognised president whom the Huthis had chased out of the capital Sanaa. It also led Iran to scale up its cooperation with the Huthis, including military assistance, diplomatic support and the hosting of a pro-Huthi media in a part of Beirut controlled by Irans ally Hizbollah. Today, the Huthis maintain a tight grip on the northern highlands, including Sanaa where most of the population resides, while the coalitions Yemeni allies are deeply divided over political and military agendas.

Since early 2022, Saudi Arabia has actively pursued a negotiated end to the war, or at least its involvement therein. That April, UN-facilitated mediation led to a two-month truce, which was renewed twice before expiring in October but continues to be largely respected by all sides. In January 2023, Oman-facilitated back-channel contacts between Saudi Arabia and the Huthis progressed to direct talks when a Saudi delegation visited Sanaa to discuss a permanent ceasefire agreement. Riyadh hopes that the deal with Tehran will help sustain momentum toward the exit from Yemen it seeks. Both Saudi Arabia and Iran might see a compromise in Yemen as a first step toward a regional security arrangement that would serve their interests.

Still, there is a long way to go to a comprehensive solution to the Yemeni war, and precisely how much the China-brokered deal will help is unclear. Thus far, Iran has not demonstrated it is ready to offer real concessions, in particular on its alleged supply of advanced weapons to the Huthis. Even if Iran wants to play ball, its influence over the Huthis and ability to persuade the group to accept a political deal, either with the Saudis and Emiratis or, arguably even more difficult, with the array of anti-Huthi forces in Yemen, are still in question. As matters stand, a narrow Saudi deal with the Huthis, while positive in itself, would not end the war, as it would exclude an array of political and military actors aligned with what remains of Yemens internationally recognised government. Any initial deal between Riyadh and the Huthis would have to set the stage for intra-Yemeni talks.

Both Huthi and government sources presented the Saudi-Iranian deal, at least initially, as a welcome boost to their own positions.

Both Huthi and government sources presented the Saudi-Iranian deal, at least initially, as a welcome boost to their own positions. Huthi spokesman Mohammed Abdulsalam professed the hope that it would put an end to what he called the destabilisation of the area wreaked by the Zionist-American intervention. For its part, the Saudi-backed Yemeni government padded its cautious approval of the agreement with expectations that Tehran would change its destructive policies in the country. Still, other Yemenis caution that a deal between Riyadh and Tehran that does not involve the parties on the ground will do little to change the calculus of Yemens many actors. Local partners would have to be on board to make any agreement sustainable.

The coming weeks will likely shed some light on prospects for political progress in Yemen. An extension of the formal truce, which could then lead to a permanent ceasefire, would be an important first step. In an encouraging move, the Huthis and the government exchanged more than 800 prisoners between 14 and 17 April. Earlier in April, Saudi Arabia invited members of the Presidential Leadership Council, its main Yemeni partner, to discuss the details of a roadmap Riyadh has been negotiating with the Huthis. According to Crisis Group sources in Yemen, the roadmap will be divided into phases, starting with a Huthi-Saudi deal that would fully open the countrys ports and unblock roads. In principle, this move should open the door to intra-Yemeni negotiations. It should also allow for payment of salaries to civil servants and military personnel in Huthi-held areas, a main Huthi demand, which the groups rivals reject for now and which is complicated by the unrecognised status of the de facto Huthi authorities. The plan then envisions a two-year transitional period, to be dedicated to intra-Yemeni dialogue about the countrys political future. For now, though, it remains unclear whether the Huthis will actually sit down with their Yemeni rivals and, even if they are prepared to, whether the various anti-Huthi forces can come to the table with a single set of demands.

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The Impact of the Saudi-Iranian Rapprochement on Middle East Conflicts - Crisis Group