Seven years ago, in the winter of 2016, news broke of Saudi Arabia having executed 47 prisoners. One of those beheaded was Al Nimr, a prominent Shia cleric and critic of the Saudis. Protesters burned the Saudi diplomatic missions in Tehran and Mashhad shouting “Death to Al Saud”. The Saudis broke off all diplomatic ties with Iran. But in a surprise detente on March 10, 2023, the two countries agreed to resume diplomatic relations. This rapprochement was brokered by China in Beijing.
Since 2016, relations between the two Islamic nations — Saudi Arabia the principle Sunni State that is home to the two most holiest shrines in Islam and Iran the major Shia nation and the vortex of the Shia Crescent — had soured. Iran was accused of targeting Saudi Arabia’s major oil facilities. On September 14, 2019, drones were used to attack oil processing facilities operated by State-run Aramco at Buqayq and Khurais. The Houthis in Yemen claimed responsibility but the US and Saudi blamed Iran.
The current agreement was signed by Ali Shamkhani, the secretary of Iran’s Supreme National Security Council, and Saudi national security adviser Musaad bin Mohammed al-Aiban with Wang Yi, China’s senior-most diplomat, keeping a hawk eye over the proceedings.
But these negotiations aren't really that recent. In 2021, Iran offered a resumption of talks that the Saudis turned down. Iraq was then chosen as a mediator under the then-Prime Minister Mustafa al-Kadhimi, who was more than willing to help the two rivals bury the hatchet. Mr Al-Kadhimi’s ouster put a halt to these informal conversations. Interestingly, Joe Biden, during his Saudi visit in July 2022, wanted the Saudis to work with other GCC nations to “counter the threats posed to the region by Iran”. In an attempt perhaps to assuage the Middle Eastern nations that American influence was here to stay, Mr Biden quipped: “We will not walk away and leave a vacuum to be filled by China, Russia, or Iran.” Words that do not inspire much confidence after the United States’ ignominious exit from Afghanistan.
What the Saudis did next was to bring China in to help broker a peace deal with Tehran. A clear indication that the Chinese were seen as better arbitrators compared to the US. Iran and China have deep economic ties helped partly by US sanctions that the Chinese have ignored. There was no way the US could have played middle man here given its fraught relationship with Iran.
After the March 10 agreement in Beijing, Iranian officials stated that they had reached “good contracts and agreements with large Chinese companies, which will be announced in the future”. More importantly, China is a major importer of both Saudi and Iranian oil and sees them as important cogs for its energy security.
Xi Jinping's visit to Riyadh in December 2022, in effect, laid the foundations for the current thaw in relations. Iran's President, Ebrahim Raisi, also met Xi Jinping in Beijing in February where Saudi proposals were found acceptable by him.
So what did the two sides ask of each other? The Saudis have long wanted Iran to stop interfering in its internal affairs and stop attacks on Saudi soil. In return, the Iranians want the Saudis to recognise the Houthis as the legitimate authority in Yemen and to stop funding anti-Iran militant groups which the Iranians believe are supported by the Saudis.
This agreement will have broad-based repercussions in the Middle East, in particular a de-escalation in regional conflicts where these two nations are involved either directly or by proxy. The biggest victim of the conflict between Iran and the Saudis has been the Yemenis, who face acute starvation. The Saudi funding of the exiled government and Iranian support to the Houthis since 2014 has made a humanitarian wreck out of an already poor country.
But, of course, much would depend on how the next two months shape up. The foreign ministers of both nations are slated to meet to prepare for the exchange of ambassadors. The joint statement calls for the reopening of embassies to happen “within two months”. If the promise of the deal holds, it could potentially bring Iran closer to the rest of the region which has hitherto been wary of doing so under American pressure.
For China, this is a major diplomatic victory. Granted, for the Chinese this was a low-risk, high-reward endeavour. But this intervention has put the Chinese right on course to challenging American influence in the Middle East. The Saudis have also demonstrated a high degree of dexterity. After implicitly supporting the US-brokered Abraham Accords signed in the White House on September 20, 2020, that normalised relations between Israel and the United Arab Emirates and Bahrain, respectively, Saudi Arabia then pivoted to normalise its own relationship with Iran. Given that Iran and China had signed a 25-year strategic partnership in March 2021, it made China the natural interlocutor.
China has long played second fiddle to the US, especially in the Gulf. With this recent deal, Americans understandably find themselves on the sidelines of a major Middle Eastern event for the first time in a long time. China’s greater diplomatic role is perhaps necessitated by its need to ensure energy security for itself. China’s overall investment in the Middle East and North Africa (MENA) region totaled $273 billion between 2005 and 2022. Chinese investments in Iran have also been increasing with China accounting for a third of Iran’s total trade. With this new deal, China has helped create a new geopolitical reality in the Middle East.
What does this mean for India? There are two ways of looking at this deal from the Indian perspective. First, one could see this as a setback and a missed opportunity to have acted as a mediator ourselves given our recent engagements with GCC nations. But this approach assumes India’s influence in the region to be as significant as the Chinese.
Second, given this China-brokered peace deal, India needs to adopt a cautious stance and watch how things play out. It is important to underscore that India maintains good relations with Tehran and Riyadh independently of each other. But how big an impact will Chinese influence have on future Indian investments in the region remains an open-ended question. India will have to walk the extra mile to ensure that both Iran and Saudi Arabia continue to be our good friends. For it is needless to say that Saudi Arabia and Iran together will shape the geopolitics of the turbulent Middle East.
Will we ever see our diplomacy undertaking manoeuvres of the kind China has pulled off here? For that, foreign policy-making must be redrawn to ensure that India does not always find itself reacting to events and instead is at the forefront in influencing major geopolitical events. Indian foreign policy has to move beyond self-congratulatory event management exercises in the rarefied salons of Delhi and actually start doing some heavy lifting for India.