Significance of the Iran-Saudi Arabia Agreement Brokered by China

Middle East and China Experts Share Thoughts on Impact

Saudi Arabia and Iran announced on March 10 that they have agreed to re-establish diplomatic ties in an agreement brokered by China. We asked several Belfer Center experts for their thoughts on the significance of the unexpected deal orchestrated by China and what its long-term ramifications might be. 

See comments below from Stephen M. Walt, Michael Miner, Karen Elliott House, Joseph Nye, Grant Golub, Peyman Asadzade, Mohammed Alyahya, and Daniel Sobelman.

STEPHEN M. WALT, Robert and Renée Belfer Professor of International Affairs; Faculty Chair, International Security Program

"China’s role in mediating a detente between Iran and Saudi Arabia highlights a long-standing flaw in U.S. Middle East policy.  China has cordial relations with every country in the Middle East, which gives every state in the region an incentive to stay on good terms with Beijing and enhances China’s leverage.  The United States, by contrast, has “special relationships” with some countries and no relations at all with others (such as Iran).  The result: America’s clients take its support for granted and America’s adversaries have no reason to adjust their behavior.  If the U.S. wants to compete effectively with a rising China, it should adopt a more realistic and evenhanded approach to diplomacy."

Walt also wrote "Saudi-Iranian Détente Is a Wake-Up Call for America," published in Foreign Policy on March 14, 2023.

MICHAEL MINER, Acting Program Manager, Intelligence Project

"Saudi Arabia and Iran’s combined weight shape the geopolitics of energy more than perhaps any geographic tandem in the world. Shared influence works in their individual favor and creates opportunities to leverage China and other major consumers. By most accounts the two-year decline in energy demand has come full circle. Those figures are set to rebound and potentially explode as China will be the single largest consumer in global energy markets. One of the biggest threats? Open conflict between Saudi Arabia and Iran. Whatever the spark, from the Iran nuclear program to an Israeli strike or an unexpected catastrophe, such a conflict poses a significant disruption to stability. Diametric interests aside, Riyadh and Tehran hold an outsized influence on supply and access that represents an increasingly vital interest for Beijing.

....Absent steady Middle Eastern energy as a core component, Xi Jinping’s ambitious economic agenda will fail to achieve growth targets. Expanding foreign policy goals, from the Belt & Road Initiative to developing a blue water navy, will also fall by the wayside. Failure avoidance requires relative stability in the Middle East and the cooperation of two powers who may not be able to agree with each other but can likely find ways to agree with China on areas of mutual interest."

This is an excerpt from a longer commentary published in ALARABIYA News 

KAREN ELLIOTT HOUSE, Senior Fellow

"Saudi's Crown Prince has played a complicated hand of big power poker very well but the game is far from over.  China has brokered normalization of relations between a rising Saudi and a declining Iran.

Officials in Riyadh hope this deal, which elevates China and underscores diminished U.S. influence in the region, will finally pressure the Biden administration to recoup by granting the Kingdom concrete U.S. security guarantees including reliable access to U.S. arms.  Riyadh still prefers America as its strongest ally.  But distrusting Washington’s reliability one senior Saudi official says, 'We have to accept reality and figure a way to live with a nuclear Iran. So, we will go from hostile relations to better relations.'

Doubt remains whether Iran will keep its word.  So, exchanging ambassadors will await positive Iranian actions in places like Yemen. If that happens, Riyadh is prepared to end sanctions on Iran, build commercial ties and pledge not to allow Israel to overfly its airspace to strike Iran’s nuclear facilities. Clearly Iran could renege. And this pressure game with Washington could further erode Riyadh’s relations with U.S. lawmakers.  But the Crown Prince has secured with China's help the best insurance policy available right now."

JOSEPH S. NYE, Harvard University Distinguished Service Professor; Member of the Board, Belfer Center

"I am not so alarmed by China’s role in brokering détente between Iran and Saudi Arabia. China imports much of its oil from the Persian Gulf and the U.S. remains the major supplier of security in the region despite its professed desire to focus more on Asia – and Europe where war rages after Russia’s invasion of Ukraine. If China now takes up more of the burden of providing stability in the Gulf, that can be a win-win situation. One danger of current discussions of China in Washington is the tendency to portray everything in zero sum terms, that any gain for China is a loss for the U.S.

Of course there are always some zero sum aspects in a strategic competition such as that between the U.S. and China, but they should be kept in perspective. First, the détente between Iran and Saudi Arabia is a modest one, not a full reconciliation or alliance. Second, the U.S. remains the major supplier of security to Saudi Arabia and China is not about to replace that. Moreover, Donald Trump’s withdrawal from the multilateral Iran nuclear agreement had the effect of reducing American influence and that was a self-inflicted wound, not a Chinese gain. So, the joint gains of having a somewhat more stable relationship between Iran and Saudi Arabia in the Gulf outweigh the competitive costs to security seen in hard power terms.

But what about soft power, the ability to affect others through attraction rather than coercion or payment? There is no question that building a reputation as a peacemaker can enhance a nation’s soft power and that is a gain for China. At the same time it is a modest gain because it is a modest agreement. And in the global context, polls have shown that there are limits to China’s soft power that are unlikely to diminish so long as it has territorial conflicts with its neighbors; insists on tight party control of its civil society, and practices predatory lending in its aid programs.

So Washington should pay attention to this deal, and adjust its own policies modestly, but not succumb to hysteria."

GRANT GOLUB, Ernest May Fellow in History and Policy

"The Iran-Saudi Arabia rapprochement and agreement to normalize diplomatic relations is a significant step that could remake the international politics of the Middle East if it holds up. After years of nonexistent relations between the two sides, this China-faciliated deal could significantly de-escalate regional tensions and lead to additional accords that stabilize the Middle East. It is an agreement that should have been brokered by Washington a long time ago. Moreover, it's another sign that Beijing is seeking to expand its global role and tackle issues that usually were within the American purview. That said, I don't think China will seek to deeply envelop itself in Middle Eastern politics out of concern it will get stuck much like the United States did in recent decades. This is a major development, but the jury is still out on what it means for China's future position in the Middle East." 

PEYMAN ASADZADE, Research Fellow, Middle East Initiative

"The reconciliation between Iran and Saudi Arabia is significant both as a positive first step in the de-escalation of the conflict and as a sign of China's growing influence in the Persian Gulf region where the United States has long attempted to use its military power to act as a security provider. 

 What remains to be seen is whether both parties will follow through; if so, the deal could improve security and ease tensions in Yemen as Iran has agreed to stop encouraging Houthi attacks on Saudi Arabia and in the broader region, particularly in Syria and Lebanon, where the proxy wars between the two countries have had the greatest impact. This is particularly crucial for Yemen because of Saudi Arabia's direct military intervention and the humanitarian effects it has had on the Yemeni people. While I am cautiously optimistic about the positive impact of the deal on conflict resolution in Yemen, it is important to note that Iran’s influence over the Houthi Movement is not as strong as its influence on Shiite militant groups in Iraq or Hezbollah in Lebanon. It remains to be seen whether Iran will be able to influence the Houthis' behavior."

MOHAMMED ALYAHYA, Fellow, Middle East Initiative

"The Beijing agreement that reestablished diplomatic relations between Saudi Arabia and Iran marks an important shift in great power competition in the region. While the United States has argued that a pivot away from the Middle East is necessary to compete with the larger threat posed by China in the East, the Chinese have increasingly eyed the Middle East as a primary arena for great power competition with the U.S. This type of dissonance was on full display last week in the deal China brokered with two regional heavyweights that have significant economic ties with Beijing. China is Saudi Arabia’s largest trade partner and a heavy consumer of Saudi Arabian energy and petrochemical products, and Iran is reliant on China as a primary source for foreign currency. Without China, little stands between the Iranian regime and total economic collapse. That is the source of China’s considerable leverage of Iran.  The Chinese have an interest in seeing stability in the region, protecting the free flow of oil, and deescalating regional conflicts. They share those interests with the U.S. and Saudi Arabia. What makes Beijing unique is that it might just have the tools and leverage to ensure that Iran complies. Time will tell."

DANIEL SOBELMAN, Research Fellow, International Security Program

"Led by Iran, the 'axis of resistance' has indeed shifted the regional balance of power in a way that is perceived as a threat to the core interests of the established powers in the region—including Israel and Saudi Arabia. Iran did not initiate the various developments that have shaped the region's politics in recent decades, including the collapse of the Arab-Israeli peace process, the U.S. War in Iraq, the so-called Arab Spring and the subsequent rise of the Islamic State. But it harnessed the opportunities created by these shockwaves in the service of establishing unprecedented influence in the Middle East—a region Iran has tellingly rebranded as 'west Asia.'"

This is an excerpt from a longer commentary published here.