Iran Saudi Deal: Potential Game Changer

Sub Title : In the wake of the deal will come a churn in global geopolitical alignments

Issues Details : Vol 17 Issue 1 Mar – Apr 2023

Author : Ajay Singh

Page No. : 38

Category : Geostrategy

: March 25, 2023

The US influence is West Asia has been ebbing in recent years. The Iran-Saudi deal marks the decline of US influence in the region, and more importantly the arrival of China, who brokered the deal, as a power that can take its place there. In the  wake of the deal will come a churn in global geopolitical alignments which can have both negative and positive consequences

The Beijing Accord

The National People’s Congress of the Chinese Parliament was in session on 10 March, and as expected, Xi Jinping had just been confirmed as the President for an unprecedented third term. Almost on cue came the news that the Iran-Saudi Peace Deal, brokered by China had been signed in Beijing, along with images of the NSAs of both countries flanking the beaming Chinese interlocuter Wang Pi with the mandatory flags of the three nations in the backdrop. Iran and Saudi Arabi, two sworn ideological and political enemies had come together in a peace deal, which could be well called The Beijing Accord. It made good optics and the timing was obviously designed with the occasion in mind. One that showed the re-elected Xi Jinping as a world leader willing to take China to a new role in the international order.

Yet, it was more than just optics. The Iran-Saudi deal is a fundamental change in the politics of West Asia. It marks the decline of US influence in the region, and more importantly the arrival of China as a power that can take its place there. And the results are both disturbing and promising – depending on how you look at it.

Under the terms of the deal, the two sides agreed to revive diplomatic ties which have been severed since 2016, after Iranians stormed the Saudi embassy in Teheran in retaliation for the execution of the prominent Shia cleric Sheikh Nimr, in Riyadh. The two sides will resume relations based on “respect for sovereignty of states and non-interference in internal affairs” and re-open embassies and missions within two months. They also agreed to restart two key agreements–the 1998 General Agreement on cooperation in economics, trade, investments, technology, sports, culture and youth; and the Internal Security Agreement of 2001, covering joint action against crime, terrorism and drug trafficking. It is significant that China is a co-signatory and projects itself as the guarantor of the deal in the joint trilateral statement signed by all three sides.

The Ebbing of US Influence

For almost seven decades, the USA had played the role of net security guarantor of the Middle East, in return for access to its oil. Amongst the three main powers of the region, Israel and Saudi Arabia, were firmly in its camp as were most other Arab states. Its relations with the third major power – Iran – had ruptured since the storming of the US embassy in Tehran in 1988, and had only become increasingly antagonistic ever since. But with the US weaning itself away from Middle East oil, its interest in the region had reduced considerably. It had also lost strategic space to Russia by its non-involvement in the Syrian Civil War. Worse, it had alienated its traditional ally, Saudi, by its frosty attitude towards Crown Prince Mohammed Bin Salman, after the assassination of the dissident, Jamal Khashoggi in October 2018.  Saudi was also peeved that that USA did not retaliate after Houthi rebels launched a crippling drone attack on its oil facilities in 2019 leading to the belief that the USA was no longer a reliable security partner. President Joe Biden’s visit to Riyadh in July 22 to meet MBS – a man he called “the murderer” also did little to mend bridges. Even during the Ukraine war, Saudi supported Russia, even refusing to increase its own oil production to curb prices.

Iran of course, has another axe to grind. Ever since Donald Trump walked out of the Nuclear Deal (an act which reduced US credibility completely) and reimposed unwarranted sanctions, Iran has been almost thrust into international isolation. The killing of the Revolutionary Guards Chief Qassim Soleimani was another blatant provocation. Now, in spite of US sanctions, Iran has a market for its oil with China, and will be able to resume trade with its neighbors. Its nuclear program is now well underway, and it is just 16 days away from making enough fissile material for a nuclear warhead.  With this deal, both Saudi and Iran have cocked a snook at the US, and edged it out at the expense of China.

The rapprochement between the two rivals, could help the region by reducing the hostility between the two major Sunni and Shia states and ending the proxy wars between them. The Yemen Civil War between Iran sponsored Houthi rebels and Saudi backed government forces could see some sort of permanent ceasefire. Saudi-Iran hostilities through their proxies in Lebanon, Syria and Libya could also see a reduction. But more than anything else it will upend the political and power equations and see China (perhaps in conjunction with Russia) emerge as the dominant influence in this strategic space.

The US vision centered around the Abrahams Accord which had been brokered by the Trump administration, to try and get Israel and Arab states together. Directly or indirectly, the accord was designed to isolate Iran further and fueled the latent anti-Iran sentiment. It is significant that while the Arab states of UAE, Bahrain, Morocco and Sudan have come on board, Saudi has not signed as yet. With its mending of fences with Iran – a sworn enemy of Israel – perhaps complete implementation of the Abrahams Accord can never be realized. That will be quite a blow to Israel as well, which has tried hard to drive a wedge between Saudi and Iran. It could now face renewed opposition from the Arab world, especially to its far-right policies. It will no longer be able to strike Iran with impunity, and a rising nuclear armed Iran will be a difficult to counter – especially when it is backed by China.

Changing Power Equations

The greatest beneficiary will be China which has successfully brokered the deal and cemented Xi Jinping’s position as a global leader. To give it its due, the deal was managed beautifully, getting the two parties together in just four months. It began with Xi’s visit to Riyadh in December 22, followed by the Iranian Prime Minister, Ebrahim Raisi’s visit to Beijing in February 23. Five rounds of talks followed leading to the surprise announcement on 10 March – trumpeted as the Beijing Accord.

China has now usurped the strategic space in the Middle East by weaning over two of the three major powers there. It is now the largest trading partner of West Asia with over $330 billion in two-way trade and its economic imprint is firmly established.  It has also recently signed a 25-year security and economic partnership with Iran worth $400 billion. Saudi too – following its disillusionment with the US – has been wooed by an oil-for-investments plan to modernize its petroleum industry. It is now set to cement its strategic presence there.

With the diminishing of US influence and its rather dubious role in the Ukraine war, the world is seeing some major power shifts. The Ukraine war has caused a West vs Them kind of divide; with the US and EU on one side, and China and Russia on the other. An alliance of China with Russia, Iran, North Korea and now, perhaps even Saudi is very much on the cards. With this deal the US and its western allies are being slowly edged out of the Middle East and this will impact global equations in Europe and even the Indo-Pacific. Xi Jinping’s visit to Moscow and the bonhomie with Putin signals the forging of a strong Beijing-Moscow bond. And should China be able to broker another peace deal between Russia and Ukraine, its global standing will sky-rocket.

Implications on India

India had welcomed the peace deal and in couched diplomatic parlance with a clear reference to the LAC stated, “India has always advocated dialogue and diplomacy to resolve problems.” But we too have been taken aback by China’s initiative in a region of great economic and strategic importance. For starters, it is sure to impact the I2U2 grouping of Israel-India-UAE-US, which was being projected as the Middle Eastern Quad. With Russia also leaning towards the region, a new Quad could well be a China-Russia-Iran-Saudi one. Also, having China emerge as a power center in a Middle East would be disconcerting to our own interests.

Over the past decade or so, India has successfully built ties with virtually every nation in the Middle East. Yet our relations with Iran have been impacted by US sanctions and we have been unable to buy crude from it for over four years. It is time to use our cultural and civilizational bonds to renew ties with Iran, and also rejuvenate the Chahbahar port which has been stagnant for some time now. Our own ties with Saudi, UAE and Israel should be pursued independently, so that our economic and strategic ties in the Middle East are ensured. We seem to have taken our eyes off this region with our recent focus on the Indo-Pacific.

But, as Xi Jinping revels in his new role as peace-maker, perhaps it will make a difference to China’s actions along the LAC and the China Sea. Should there be a reduction of tensions there, similar agreements could be worked out and the resultant peace and tranquility would definitely be beneficial for all sides.