Geopolitical competition between Riyadh and Tehran goes at least as far back as the 1979 Iranian Revolution. In 2016, an attack on the Saudi Embassy in Tehran, following the execution of Saudi Shia cleric Nimr al-Nimr, pushed Saudi Arabia to recall its ambassador from Iran. Tensions have increased further, as the kingdom has come under attack from the Iranian-backed Houthis in Yemen, and Iran is believed to have carried out attacks in September 2019 on Aramco facilities in Saudi Arabia. However, a fifth round of talks between Saudi Arabia and Iran in Baghdad has sparked a fresh sense of optimism. Iraq’s prime minister suggested “reconciliation is near.” The spokesperson for Iran’s Foreign Ministry stated that he saw progress in the recent round of talks, which he described as “positive and serious.” The moves to ease tensions between Saudi Arabia and Iran are already creating ripple effects for other countries in the region.

Yemen has been one of the main arenas of competition between Saudi Arabia and Iran since 2011, but it is now becoming an opportunity for confidence-building measures as part of talks between the two parties in Iraq. Iran’s Yemen policy has largely focused on undermining Saudi security by creating a thorn in its underbelly. Iran has long provided significant and lethal support for the Houthis. Support from and extensive military training by the Islamic Revolutionary Guard Corps Quds Force and Hezbollah have enabled the Houthis to repeatedly attack Saudi soil. Estimates from 2015 indicated the war in Yemen, even at that stage, was costing Saudi Arabia up to $6 billion a month. The resumption of talks between Saudi Arabia and Iran, following a several-month hiatus, came shortly after a negotiated cease-fire in Yemen, suggesting Iran may have had some role in influencing the Houthis. The cease-fire has been a significant initial step toward ending the war in Yemen, and if it holds, it could be the cornerstone of building trust between Riyadh and Tehran.

The negotiations between Iran and Saudi Arabia will also likely affect politics in Lebanon and Iraq, where Tehran and Riyadh support competing political forces.

Both Riyadh and Tehran have maintained significant influence within Lebanon, and this has increased tension between Iran’s and Saudi Arabia’s allies in the country. For example, Hassan Nasrallah, Hezbollah’s secretary general, in January accused Saudi Arabia of terrorism because of its role in the war in Yemen. Lebanese officials condemned Nasrallah’s harsh anti-Saudi language: Lebanon’s president, Michel Aoun, said that, “The Lebanese people are keen on preserving Lebanon’s Arab and international relations, especially the ones with the Gulf states, with Saudi Arabia at the forefront.” After Hezbollah-allied candidates lost the majority in Parliament following the May 15 elections, a decrease in tensions between Saudi Arabia and Iran will likely help to make the formation of Lebanon’s government smoother and aid its functionality. As a result, ending the political deadlock in Lebanon has been high on the agenda during the negotiations between the two countries. While Saudi Arabia and Iran will likely continue supporting their respective allies, political maneuvering in Lebanon may be smoother.

Despite the talks being held in Iraq, Saudi Arabia’s and Iran’s involvement in that country were not discussed. However, there could also be space here to create a better understanding between Tehran and Riyadh on this front as well. Iranian-allied militias in Iraq have been accused of a number of attacks on Saudi Arabia. For example, Kataib Hezbollah is suspected of conducting attacks on Saudi oil facilities in 2019 and a Saudi royal palace in 2021. Both Saudi Arabia and Iran will likely try to maintain influence in Iraq, but a better understanding between these regional rivals would likely undercut the charged state of relations that helped encourage such attacks in the past. It could also provide for a better understanding in terms of their respective Iraq strategies.

Finally, a reduction in tensions between Saudi Arabia and Iran may sway Riyadh away from its flirtation with the idea of joining the Abraham Accords with Israel. Since the 2015 signing of the Joint Comprehensive Plan of Action nuclear deal with Iran, Saudi Arabia has been opening toward Israel, in part, viewing Israel as a potential counterweight to a more assertive Iran. Former Israeli Prime Minister Benjamin Netanyahu reportedly met Saudi Crown Prince Mohammed bin Salman in 2020, and Israeli President Isaac Herzog recently said he would be happy to openly visit Saudi Arabia. In September 2021, National Security Advisor Jake Sullivan reportedly discussed the normalization of relations between Saudi Arabia and Israel with the Saudi crown prince, and Mohammed bin Salman apparently did not openly reject the idea. In fact, he recently stated that Saudi Arabia does not consider Israel an enemy, but, rather, a “potential ally.” However, the thawing of relations between Saudi Arabia and Iran, if it develops in a serious way, would remove at least one driver for the Saudis to normalize ties with Israel.

For Saudi Arabia and Iran, there remain many steps before the two sides are likely to be able to establish enduring trust. The enmity between the two countries has been decades in the making and has geopolitical, sectarian, and economic dimensions. The negotiations, however, turning the two countries away from a military confrontation and back toward a political arena to settle disputes is a promising development that could have spillover effects for broader regional security. Whether the frail reed of these talks can bear such weighty consequences remains to be seen. But even skeptics of the talks acknowledge that they represent an effective tool in the intermediate term for managing bilateral tensions and buying time to see if confidence-building steps can improve longer-term prospects.