SAUDI ARABIA - IRAN RELATIONSHIP – INTERNATIONAL

News: Saudi Arabia, Iran to renew ties: What it means for the world

 

What's in the news?

       Saudi Arabia and Iran have announced the restoration of diplomatic ties after four days of previously undisclosed talks in Beijing.

 

About the normalization deal:

       Two countries agree to revive their 2016 agreement.

 

Important provisions in the deal:

       Both countries plan to reopen their embassies in Riyadh and Tehran in two months.

       Both countries will respect the sovereignty of other countries and not get involved in each other's business.

       For example, Saudi Arabia agreed to rein in Iran International, a satellite news channel.

       On the other hand, Iran has agreed to curb cross-border attacks on Saudi Arabia by Houthi rebels in Yemen.

       Agreed to implement a security cooperation agreement signed in 2001 and a general economic, trade, and investment agreement signed in 1998.

       Apart from these measures, both countries will also get together to work out the details of the peace deal.

       China will organise a conference between Iran and the six Gulf monarchies to help maintain peace in the region.

 

Differences between two countries:

Political influence:

       Both Iran and Saudi Arabia are major powers in the Middle East and have sought to increase their political influence in the region.

       This has led to competition and conflicts over issues such as control of oil resources, support for different political factions and proxy wars in countries like Yemen, Syria and Iraq.

 

Religious difference: 

       The rivalry between Saudi Arabia and Iran is rooted in Islamic sectarianism.

       While Iran is the foremost Shia state in the world, Saudi Arabia is considered to be the religious home of Sunni Islam.

 

The assassination of a famous Saudi journalist:

       The killing of a Saudi journalist and dissident in 2018 was allegedly carried out by Saudi agents. This has further soured relations between the two countries. Iran has condemned the killing and accused Saudi Arabia of human rights abuses.

 

Saudi's concern about the Iran's nuclear program:

       The Joint Comprehensive Plan of Action (JCPOA), a nuclear agreement with Iran, needs to be revived and renegotiated to ease sanctions and address concerns about Iran’s nuclear program. However, domestic politics in the US and Israel could pose challenges to this process.

 

Significance of the deal:

1. To Saudi Arabia:

       Path to multiple alignment:

       It has also led to Saudi Arabia slowly moving away from the singular influence of the United States in its foreign policy.

       This deal will lead to the multipolar world and reduce the hegemony of the single country.

       Vision 2030 of Saudi Arabia:

       "Vision 2030” plan calls for diversifying the oil-dependent economy by attracting tourism and foreign investment, drawing millions of expatriates to the kingdom and turning it into a global hub for business and culture.

       It needs a lot of cooperation with neighbouring countries such as Iran, Iraq, and other countries.

 

2. To the west Asia region:

       Regional peace:

       Regional peace will be crucial to turning Saudi Arabia into the global hub that “Vision 2030” envisions.

       This has led to Saudi Arabia making concerted efforts to end long-standing conflicts/rivalries with powers across the region – with the Iran deal the latest such move.

       Reducing human rights violations:

       Human rights violation: In Yemen, Saudi bombs aimed at reversing gains by Iranian-backed rebels have killed large numbers of civilians.

       A December 2020 UN report said that since 2015 the “war caused an estimated 233,000 deaths, including 131,000 from indirect causes such as lack of food, health services and infrastructure”.

 

3. To Iran:

       Revival of economy:

       Iran’s economy is deteriorating and its currency, the rial, is struggling. A deal with Saudi Arabia, under China’s mediation, could open economic lifelines for Iran.

       Iran's nuclear program:

       For Iran, the agreement comes as it accelerates its nuclear program after two years of failed U.S. attempts to revive a 2015 deal that aimed to stop Tehran from producing a nuclear bomb.

       Finding allies in the region is of utmost importance to Iran when the Khomeini regime is perhaps at its weakest since the revolution.

 

4. To China:

       Increasing the role of China in the region:

       China’s role as peace broker is yet another sign of changing currents in the region. China has historically maintained ties with both countries and the latest deal points to China’s growing political and economic clout in the region.

       China wants stability in the region, since they get more than 40 percent of their energy from the Gulf, and tension between the two (Iran and Saudi Arabia) threatens their interests.

       China “quasi-mediation diplomacy”:

       China has signaled a shift in its approach towards the Middle East. It is moving away from hard security concerns towards “quasi-mediation diplomacy”.

       The strategy aims to promote China’s commercial, diplomatic and political interests. The recent Saudi-Iran accord is the first manifestation of this approach, reducing regional tensions and paving the way for further dialogue.

 

5. To the world:

       Global energy markets:

       Saudi Arabia and Iran are two of the world’s largest oil-producing nations, and their relationship impacts global energy markets. Any agreement between the two nations could affect the price of oil and gas globally.

       Good for Afghanistan:

       This deal will lead to the successful completion of the Chabahar-Helmand-Kabul-Termez railway line which will open the vast and resource-rich Central Asian region to the Global South.

 

6. Roadblocks to the deal:

       Sectarian tension:

       One of the major roadblocks to a true thaw in relationships is the underlying sectarian tension between Shias and Sunnis. A diplomatic deal does little to change this.

       Regional tension:

       There are specific geopolitical questions which have not been directly addressed.

       For instance, in both the wars in Yemen and Syria, Iran and Saudi Arabia find themselves on opposite sides, these conflicts will continue to fuel antagonism between the two countries.

       Saudi Arabia 's closeness with USA:

       Iran is highly critical of Saudi Arabia’s closeness with the United States. 

       The US has crippled Iranian economy with its sanctions regime for decades.

       Iran's state sponsored terrorism:

       Saudi Arabia is very aware of the large network of armed militias across West Asia that Iran funds and backs, seeing them as a threat to its own sovereignty as well as the regional balance of power.

 

7. Implications on India:

a. Energy security:

       India is one of the biggest oil consumers in the world. Most of the oil imports come from the Middle East, especially Saudi Arabia and Iran.

       The Saudi-Iran peace deal could help reduce tensions in the region and could lead to a more stable oil market. This will be good for India’s energy security.

b. Regional stability:

       The normalization of relations between these two countries could lead to a reduction in tensions and potentially help resolve some of the conflicts in the region.

       This would be beneficial for India as it has a significant interest in maintaining regional stability. For example, India supports for International North-South Transport Corridor (INSTC), and Iran is also part of India’s extended neighbourhood.

c. China angle:

       India may face difficulties as a result of China’s efforts to mediate tensions between Iran and Saudi Arabia.

d. Trade:

       Both Iran and Saudi Arabia are important trading partners for India. Normalising ties between them could open up new avenues for trade and investment, leading to increased economic opportunities for India.

e. Geopolitics:

       India has good relations with both Saudi Arabia and Iran and has been trying to maintain a balance between the two countries.

       The normalization of relations between Saudi Arabia and Iran could change the dynamics of the region, and India will need to navigate the new realities to maintain its interests in the region.