Iran and Saudi Arabia announced on Friday that they would normalize relations seven years after breaking ties. The agreement, made public in Beijing and brokered in part by China, could ease the regional proxy wars, including in Yemen, which has faced a humanitarian crisis for years.
The Iran-Saudi talks were no secret. Since 2021, the two countries have been in dialogue to restore ties — severed in 2016 after protestors in Tehran, angered by Riyadh’s execution of a Shia cleric, ransacked the Saudi embassy in Tehran. In January, Iran’s Foreign Minister Hossein Amir-Abdollahian announced that the two countries had agreed to normalization talks a month earlier.
What’s unprecedented here is the role played by China, which, with this notch on its diplomatic belt, has established itself as a Middle East power.
China, America, and a Multipolar Middle East
For decades, the United States has been the dominant — at times, hegemonic — external power in the Middle East. It operates or uses dozens of military bases in the region and has waged several wars and numerous special operations campaigns.
America’s role in the Middle East has been driven by oil and counterterrorism. Washington has guaranteed the security of Saudi Arabia, which for decades had been the world’s largest oil producer, thereby ensuring the security of oil supply and stability of prices. America’s unchecked power has also resulted in great calamities, as witnessed in Iraq.
But America’s role in the Middle East has been in decline in recent years. This is partly by choice.
In the years after 9/11, the U.S. resolved to reduce its dependence on Middle East oil. This spurred support for the shale oil “revolution.” By 2018, the U.S. reemerged as the world’s largest producer of oil.
Since the Obama administration, Washington has also tried to pivot to the Asia-Pacific region to contain a rising China, aiming to devote its resources away from Middle East wars to China’s eastern neighborhood.
At the same time, China has stepped into the Middle East carefully. And regional states have welcomed it. China’s inroads into the Middle East have been primarily economic. It has emerged as Saudi Arabia’s top crude oil export market, a position once held by the United States.
Consider this: in 2001, Saudi Arabia exported $10.5 billion in crude oil to the U.S. and $1.43 billion to China. By 2020, Saudi exports to the U.S. fell by nearly 40 percent to $6.59 billion while exports to China grew by an astronomical 1600 percent to $24.7 billion. (Saudi exports to India and Japan have also grown dramatically, reflecting a broader Asianization of crude oil markets.)
The Middle East is now also playing a greater role in China’s overseas infrastructure financing and construction, including projects branded as part of the Belt and Road Initiative. And while Saudi Arabia is the top importer of U.S arms, it relies on Beijing for weapons — such as ballistic missiles — it can’t get from Washington.
China is emerging as an alternative for historic U.S. allies in the region, who are leveraging the emerging multipolar world order to secure their interests. This week, the U.S. intelligence community, in its annual threat assessment, reported that China may once again be pursuing a base in the UAE.
Other countries, including Iraq, have facilitated Iran-Saudi Arabia talks. Among non-Arab countries, China was uniquely positioned to broker an agreement given that it is on good terms with Iran as well. China, the world’s largest energy importer, has designated Iran, Saudi Arabia, and the United Arab Emirates as “comprehensive strategic partners.”
The big uncertainty here is what kind of role will China play in the region’s security architecture. It’s unlikely to resemble that of the United States. It will avoid picking sides and probably won’t feature hard power. Beijing has, in fact, framed its Iran-Saudi reconciliation effort as a win for its Global Security Initiative, announced last April.
Maturing Saudi Diplomacy
The China-brokered Iran-Saudi Arabia normalization agreement comes as Gulf Arab states set themselves apart from the U.S. on a host of issues, including oil prices and Russia sanctions. This independence is driven in part by the weak U.S. response to the Iranian drone attacks on Saudi Aramco facilities in 2019.
We may also be seeing the emergence of a new brand of Saudi Arabian diplomacy that mixes assertiveness with finesse. During the 2020 election campaign, President Joe Biden vowed to make Saudi Arabia a “pariah” for the assassination of writer Jamal al-Khashoggi. But Crown Prince Mohammed Bin Salman — known as “MBS” — has since weathered the storm. Biden visited Riyadh last year in a failed bid to get Saudi help in easing the surge in oil prices. Months later, MBS hosted Chinese President Xi Jinping.
Flush with cash, Saudi Arabia is luring Western CEOs, culture “influencers,” and, it seems, half of Washington. The return of the likes of Ray Dalio, Jamie Dimon, and Stephen A. Schwarzman to Riyadh amounts to a defacto endorsement of MBS’s new domestic order, marked by social liberalization without political rights. Its sustainability is another matter.
But when it comes to the regional order, the Saudis are showing they are learning to play chess. The announcement of the resumption of ties with Iran came just as reports emerged of a Saudi offer to recognize Israel in exchange for nuclear concessions from Washington. At the time, most observers saw that as a regional game-changer. But its half-life was short.
Saudi Arabia remains in the midst of a soft embrace of Israel. Whether it takes on a formal shape remains to be seen. But it’s clear now the Saudis aren’t thinking in simple binaries. In a multipolar world, Saudi Arabia is learning to play chess. And it comes as the Chinese play their own game, wei qi, in the Middle East. America, it seems, will have to learn the new rules.
