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PoliticsMiddle East

Why Saudi-Iran relations are thawing

October 16, 2021

Icy relations between Saudi Arabia and Iran are thawing — and may lead to renewed bilateral ties. Realistically, diplomatic offices might open soon but it's unlikely that the countries will become close allies.

Flags of Saudi Arabia and Iran painted on cracked wall
New bilateral talks might mark the end of the frozen ties between Iran and Saudi Arabia Image: Zoonar/picture alliance

So far this year, regional archrivals Saudi Arabia and Iran have met more times than in the previous five years altogether.

The four meetings in Baghdad, and one on the sidelines of the UN General Assembly in New York, indicate continuity in the warming of bilateral relations that had been frozen since 2016.

Back then, protesters attacked Saudi diplomatic missions in the Islamic republic following Riyadh's execution of the Shiite Muslim cleric Sheikh Nimr al-Nimr.

Since then, the Sunni Kingdom of Saudi Arabia and the Shiite-majority Islamic Republic of Iran had been on opposite sides of pretty much everything, including regional conflicts in Yemen, Syria and Lebanon.

Therefore, it can be regarded as a turn of events that Saudi Crown Prince Mohammed bin Salman said he hoped that "talks with Iran will lead to tangible outcomes to build trust and revive bilateral relations."

Adnan Tabatabai, an Iran expert and chief executive officer of the Bonn-based research center CARPO, told DW in a phone interview: "For the time being, it is a positive indicator that the talks have continued and are no longer denied. However, when we compare the signs from Tehran and Riyadh, Tehran is more confident about their positive outlook."

The Foreign Minister of Iran, Hossein Amir-Abdollahian
'We have achieved results ... but we still need more dialogue,' said Iran's Foreign Minister Hossein Amir-AbdollahianImage: John Lamparski/NurPhoto/imago images

Iran's reasons

Iran's purported confidence is in line with the country's perception of it being in the stronger position — despite the ongoing US sanctions and their crushing effect on the economy.

"Whether that is justified or not is another matter. Bottom line is that Iran has a great interest in broadening regional trade relations," Tabatabai said.

Saudi Arabia — the largest country in the Middle East and, after Egypt, the second-largest economy by population in the Arab world — would seem a welcomed business partner for Iran's battered economy.

"A restoration of diplomatic ties between the two countries would also send the message to the broader region that Iran is a regional power we must contend with," said Sanam Vakil, the deputy director of the Middle East North Africa program at the London-based think tank Chatham House.

 Workers are seen at the damaged site of Saudi Aramco oil facility in Abqaiq
A 2019 attack on a Saudi oil processing facility halved the production capacity of the world's biggest oil exporterImage: Reuters/H. Mohammed

Saudi Arabia's reasons

However, Iran isn't alone in pursuing economic interests.

"In the context of COVID and the ongoing war in Yemen, I think that the Saudi state has prioritized its security and economic interests. In order to end the war in Yemen, to address Vision 2030 and to attract serious investment into the kingdom, it can only achieve that through a de-escalation with Iran," Vakil told DW.

Saudi's Vision 2030 strategy refers to targeted reforms within the country's economy, defense, tourism and renewable energy. 

Since 2015, Riyadh has led a military coalition to support the government against the Iran-supported Houthi insurgents. While Riyadh accuses Iran of supporting the Houthis with arms and drones, Tehran has said it only provides the rebels with political support.

"However, the perception that Iran fully controls the Houthis in Yemen is misleading. Iran will never be able to dictate to the Houthis how they should behave in the conflict. After all, the war is not between Iran and Saudi Arabia — but between the Houthis and Saudi Arabia, and we have to take inner-Yemeni fault lines into account as well," Tabatabai said. 

Yet, Chatham House's Vakil believes Iran still needs to make a mark in its diplomatic efforts by publicly supporting a cease-fire in Yemen. "Without that, I don't see the talks really continuing for continuing's sake," she said. 

There are other examples that illustrate how Saudi Arabia is traveling down a diplomatic road already. This includes the fact that King Salman didn't formalize established relations with Israel is positively perceived in Iran.

Saudi Arabia is also involved in the process of establishing Syria's power holder Bashar Assad in the Arab League — a move that has been welcomed by Iran.

And Saudi Arabia's ally, the United Arab Emirates (UAE), has quietly de-escalated tensions with Iran.

Saudi Arabia's Crown Prince Mohammed bin Salman
Saudi Arabia's crown prince hopes that 'talks with Iran will ... build trust and revive bilateral relations'Image: Saudi Royal Court/REUTERS

What about US ties?

Riyadh has another good reason to adjust its geopolitical policy: The arrival of the Joe Biden administration has led to greater anxiety over the US moves to wind down operations in the Middle East.

"Now, after Afghanistan, they have the confirmation that the US is not necessarily interested, invested and willing to go to great lengths to protect its partners in the region," Vakil said.

However, even before that, Saudi Arabia's ally hadn't fully jumped to their side when an assault on Saudi Arabia's Abqaiq oil processing facility knocked out half the production capacity in 2019.

Saudi Arabia has accused Iran of the attack, while Tehran has denied any involvement. Vakil believes this had a massive influence on the kingdom's geopolitical assessment.

Infografik Saudi Arabian vs. Iranian competing influence in the Middle East ENG

Wind of change

"There are quite a few issues bringing the two countries together after a number of very tense years," Vakil told DW.

Tabatabai also noted the thawing in relations. "I just returned from Riyadh and common belief is that there is a window of opportunity to better the relations with Iran," he said.

Though not officially, a Saudi delegation is said to have been to Tehran to take a look at their previous diplomatic offices. 

"I don't believe that there will be ambassadors any time soon, but a diplomatic office is realistic and would, for now, be a very positive step," said Tabatabai.

Houthi 'government': War won't stop until Saudis quit Yemen

Jennifer Holleis
Jennifer Holleis Editor and commentator focusing on the Middle East and North Africa