For decades, Saudi Arabia and Iran have been on opposing ends of regional conflicts, fueled by sectarian and ideological differences as well as geopolitical jostling. The involvement of regional and global powers further complicated this rivalry. However, in March 2023, Riyadh and Tehran announced a Chinese-brokered agreement to normalize relations, marking a significant shift aimed at improving their relations after a seven-year rupture in diplomatic relations and long intervals of heightened tensions in previous decades.

Embracing a New Regional Order

The agreement, initially facilitated by Iraq and Oman, came as a surprise for the United States and European powers, which witnessed China overseeing a deal between the two biggest actors in the Middle East. Furthermore, it complicated Israel’s calculations amid its persistent efforts to isolate Iran and normalize relations with Saudi Arabia in anticipation of a clash with Tehran over its nuclear program. Saudi-Iranian normalization has also challenged the notion that confrontation with Iran is the main driver in Saudi Arabia’s calculations regarding normalization with Israel. Both Riyadh and Tehran had compelling internal, regional, and international motives and drivers to reach a detente agreement and reduce mutual antagonism.

Both countries have been embroiled in a web of proxy conflicts and rivalries across the Middle East and South Asia – from Yemen and Syria to Iraq, Lebanon, and Pakistan – resulting in immense human suffering and material losses. Both countries have also been plagued by economic challenges. Moreover, they have both perceived a change in U.S. policy toward the Middle East, with the administration of President Joseph R. Biden Jr. placing greater emphasis on other regions and challenges, notably China and Russia, creating an opening for both to come closer together.

By committing to honor each other’s security concerns and economic ambitions, Iran and Saudi Arabia laid the groundwork to defuse the crisis between them, aiming to avoid – or at least reduce – further conflict and violence. Furthermore, by reviving trade, investment, and cultural interactions, they aimed to bolster their economies and broaden their revenue streams. And by announcing their agreement in China, they signaled an embrace of the new multipolar reality on the global stage, which could also bring them significant advantages, for instance in terms of economic benefits and enhanced regional stability. Through dialogue and collaboration, Riyadh and Tehran embodied the ambition to decrease their reliance on external forces and bolster their regional sway and autonomy. Further, they have seemingly realized their strategic role in bolstering agency for a region that is coming out of a decade of internal and regional turbulence.

The detente primarily stems from a pragmatic acknowledgment of mutual benefits by both Riyadh and Tehran. Saudi Arabia under Crown Prince Mohammed bin Salman is undergoing a domestic transformation and implementing ambitious megaprojects as part of Vision 2030, marking a strategic shift from regional entanglements to national development. The detente with Iran signals a Saudi effort to avoid becoming stretched too thin between internal economic challenges and external security threats.

Conversely, amid increasing economic decline, domestic unrest, and external security threats related to its nuclear program and international pressures, Iran likely saw detente as a buffer against potential conflict with the United States and Israel. Well aware that it cannot fight on all fronts, Tehran secured its position in the Gulf with an agreement with Saudi Arabia that could help neutralize what Tehran viewed as the suspicions and rivalries emanating from the Gulf Arab countries and allow Tehran to focus on the threats stemming from the United States and Israel. This alignment between Saudi Arabia and Iran, though leaving unresolved long-standing conflicts, points to mutual advantages of privileging detente wherever possible.

In September 2023, just before the October 7 Hamas attacks, Iranian Foreign Minister Hossein Amir-Abdollahian met with his Saudi counterpart, Faisal bin Farhan, on the sidelines of the United Nations General Assembly. The ministers agreed to enhance cooperation in various fields, including trade, energy, security, and culture. The Gaza war has raised questions about the fate of the detente between Riyadh and Tehran. However, the chief Saudi and Iranian diplomats have met at least twice since the conflict began, in Jeddah and Geneva in October and December, respectively, making clear it remains in place.

Gaza War and New Opportunities in Saudi-Iranian Ties

In November 2023, Iranian President Ebrahim Raisi was invited to an emergency Organization of Islamic Cooperation summit in Riyadh. The visit was the first by an Iranian head of state to Saudi Arabia since the restoration of diplomatic relations. The summit focused on the conflict in Gaza, which has presented a test for this new era of Saudi-Iranian relations but has also offered opportunities.

For Iran, the war not only significantly undermined long-standing perceptions regarding Israel’s deterrence capabilities but also allowed Tehran and its proxies to try to whitewash their infamous role in the conflicts in Syria, Iraq, Lebanon, and Yemen and reassert themselves as the “axis of resistance,” enhancing their influence in the region and beyond. Most important, the conflict has also provided Iran with a unique chance to stress test the readiness and effectiveness of the collective and coordinated action of its proxies against Israel and the United States in anticipation of a potential confrontation over Iran’s nuclear program if former President Donald J. Trump wins over Biden in the next U.S. presidential election.

Meanwhile, the Gaza war has offered Riyadh an opportunity to illustrate its agency in the region. By refusing to have its airspace and territory used by any military actor, Saudi Arabia has signaled to Iran that it is not part of any plans to attack it. In the same vein, by intercepting Houthi drones, Saudi Arabia has reminded other players that it will not stand idly by without defending itself.

Both countries, while concerned, show no desire for the conflict to escalate into a broader regional war or to become directly involved. Saudi Arabia knows Iran is being opportunistic with the Gaza war, instrumentalizing its networks of pro-Iranian militias in Yemen, Syria, and Iraq. Riyadh is aware of the Iranian tendency to take credit for its regional proxies’ anti-U.S. and anti-Israeli actions while distancing itself from them when pressure mounts. However, Riyadh seems to have adapted and is managing this Iranian opportunism as long as it is not targeted, and regional stability isn’t significantly undermined. When Faisal bin Farhan was asked in a France 24 interview about Iranian rhetorical opportunism, the Saudi foreign minister said that, from speaking with his Iranian counterparts, “I don’t believe the Iranians want a broader war.” Notably, Saudi Arabia refused to join the U.S.-led Red Sea task force put together to counter Houthi maritime threats. Riyadh is displaying strategic pragmatism by not amplifying tensions, aligning with its broader objectives of focusing on internal priorities and avoiding unnecessary regional confrontations.

Additionally, the war has given Saudi Arabia leverage over Israel. Israel is in a quagmire in Gaza with no clear exit strategy. Israeli Prime Minister Benjamin Netanyahu was hoping to get Arab states, namely Saudi Arabia, to discuss coordinating postwar reconstruction in Gaza and providing assistance. But Riyadh’s linking of any postwar Gaza operation to a tangible peace process with irreversible steps toward a two-state solution only amplifies its leverage in dealings with the United States and Israel. Moreover, by keeping normalization with Israel on the table but only in return for certain concessions, as the Israeli government rejects any prospect of a two-state solution, Saudi Arabia has altered the discourse and contributed to Israel being seen as the actor responsible for obstructing a peace deal.

With Israel and the United States facing widespread unpopularity in the region, they will likely have to offer significant incentives for Saudi Arabia to join any agreement. Mohammed bin Salman is in a strong position to extract major concessions from the United States and Israel in exchange for cooperation, and he is not in a hurry to give up that leverage. While Saudi Arabia, the United States, and Israel share concerns over Iran, at the same time Saudi Arabia and Iran share the perception that the Israeli occupation is problematic and a source of regional instability.

Withstanding the Test

Nevertheless, several factors and scenarios will test the Saudi-Iranian normalization agreement, chief among them the tendency of Iran’s proxies and surrogates to escalate. While Iran seemingly has some degree of sway over groups such as the Houthis, the high-stakes situations in the region mean the risk of miscalculation remains high. Given the regional climate and the ongoing war in Gaza, the actions of the involved players are difficult to predict. If an attack or action occurs that threatens Saudi security or vital interests, Riyadh may be forced to respond and address the situation in a measured way. It will also expect Tehran to use more of its influence over the Houthis to contain their direct threat to Riyadh. If Saudi Arabia deduces that Tehran is not doing enough or is not able to clamp down on antagonistic Houthi behavior, escalating tensions may test the strength of the Saudi-Iranian detente.

The other aspect testing Saudi-Iranian ties is foreign influence. Both Saudi Arabia and Iran are subject to the sway of powerful allies and adversaries, particularly the United States, Israel, and other regional players with vested interests in the dynamics of Middle Eastern politics. Their actions or pressures could significantly impact the course of the Saudi-Iran relationship.

Notwithstanding regional and international complications, it is more likely than not that Saudi-Iranian normalization will withstand these tests. In fact, it is precisely these testing scenarios and the ongoing war that illustrate the extent of the strategic utility of Saudi-Iranian normalization. The opening of diplomatic channels allows them to communicate directly. This enables both states to control not just what is communicated but how it is communicated, which can be more effective than communicating through intermediaries.

In addition, diplomatic relations allow both states, particularly Saudi Arabia, to communicate joint calls for de-escalation with greater ease, because without Saudi-Iranian diplomatic relations, it would be far more complex to release such statements. In the end, of course, such diplomatic coordination represents mere building blocks for the bilateral strategic consensus favoring detente.

The sustainability of the detente relies on how Iran and Saudi Arabia view its usefulness. Currently, both countries seem willing to maintain their agreement in line with their strategic goals. Neither Riyadh nor Tehran wants to see the Gaza conflict escalate or get directly involved. This reinforces their commitment to de-escalation, as it fits with their broader objectives and priorities. Even though regional dynamics are unpredictable, with unexpected escalation the most dangerous possibility, the current motivations and goals of Iran and Saudi Arabia indicate that Israel’s war on Gaza is unlikely – at least in the short term – to disrupt their detente.