On March 10, Saudi Arabia, Iran, and China issued a joint statement announcing an agreement to resume diplomatic relations between Riyadh and Tehran. After seven years of military and diplomatic hostility, the two Gulf powers agreed to work toward resolving their disagreements based on a set of international rules and two bilateral agreements signed in 1998 and 2001. This year’s agreement came after five days of comprehensive and intense negotiations in Beijing—and two years of Saudi-Iranian closed-door talks in Iraq and Oman.
Much of the analysis has focused on China’s growing role in the Middle East amid global power competition. But Saudi motivations go beyond hedging against U.S. withdrawal from the region or balancing one great power against another.
Why China’s Role Mattered
Both the substance and process of this agreement is a case study of China and Saudi Arabia’s shared understanding of a rules-based international order and of international security. This is an agreement on the principles of conflict resolution between two states rather than an agreement on the solutions to be reached. It reiterates recurrent Saudi and Chinese attachment to norms such as nonintervention in the domestic affairs of nations that have been constant pillars of the Sino-Saudi partnership since 2006, shown in their joint statements, actions within the UN system, and in China’s Global Security Initiative.
China’s mediation also helped navigate a long-standing dispute between Saudi Arabia and Iran over the conflict in Yemen. Riyadh’s initial position included preconditions for any talks with Iran on Tehran “leaving Yemen to Yemenis,” as the kingdom viewed Iran’s support for the Houthis as a main obstacle to any de-escalation. But over the past two years, the Saudi position has evolved, and China helped broker a compromise by which Riyadh agreed to Tehran’s request to announce the restoration of diplomatic relations before Iran halted support to the Houthis.
The public trilateral statement lacks any Iranian gesture on Yemen, but its language and consecutive press reports confirm that Chinese mediation finally got the parties to an agreement, which provides them with a two-month grace period to show goodwill before the restoration of diplomatic relations enters into effect. Saudi Arabia can’t guarantee an Iranian constructive role, but it is counting on some Chinese understanding, albeit imperfect, of its position in Yemen. Saudi Arabia is also betting on China’s vested interest in the success of Beijing’s first exercise of diplomatic leadership in the region.
In addition, Saudi statements frame Iran’s engagements per this agreement as promises made to China. An unnamed Saudi official listed China’s role as one of the most difficult issues to resolve during the negotiations. Unlike the previous mediators (most recently Oman and Iraq), China has the leverage to guarantee Iran’s respect for its engagements within this trilateral process, at least from a Saudi point of view. Beijing has already pleased Riyadh by conveying high-level Iranian security officials and not just Iranian diplomats, whom Saudi Arabia perceives as less in control of Iran’s behavior in the region. Riyadh has traditionally lacked the coercive diplomatic tools and the military deterrence to pressure security and military agents inside Iran, especially the Islamic Revolutionary Guard Corps, into compromise. Chinese mediation may compensate for this weakness, but it also puts Beijing under the spotlight if Tehran violates the engagements it made in and to Beijing.
Last, failed experiences are a pillar of the Saudi approach to any dialogue with Iran—including reliance on Western and regional powers to try to pressure Iran into a compromise. China is playing the “sponsor” role for the first time and has the benefit of Riyadh’s doubt. It is the first global power to use its leverage with Iran to address specific Saudi requests regarding Tehran’s regional policy without publicly framing them as Chinese security initiatives or a nuclear deal.
There are two downsides to Beijing’s choice to highlight the regional ownership of this agreement. First, China presented itself as a “reliable friend of the two countries,” keeping itself at an equal distance from both. This is a position that Saudi Arabia doesn’t necessarily favor, even if it benefits from China’s leverage over Iran. Second, China is also signaling its distance from the final outcome, despite reiterating the promise that it “will continue its constructive role.” Chinese priorities in the Middle East remain largely economic, with security being a function of them.
Saudi Arabia’s Vision 2030
Saudi Arabia’s de-escalation with Iran is part of a larger foreign policy focus on supporting its socioeconomic development plan, known as Vision 2030. The kingdom is investing billions of dollars to implement the plan, and an escalation with Iran would threaten the project’s funding, deter much needed foreign investment, and dash Saudi dreams of becoming a regional and global hub especially for cloud computing, logistics, trade, and industry.
China’s mediation came at a time when the regional diplomatic and economic balance of power tilts toward Saudi Arabia. High oil prices are allowing the kingdom to advance its economic development plans and double down on its financial, “Saudi first” diplomacy to regain regional and international influence. Saudi leadership has worked to solidify the country’s international standing since 2018 by revamping its process for foreign policy making, ending diplomatic confrontations, and improving the international narrative on the Saudi role in the Yemen war. The United States is moving to reduce the gap in Saudi Arabia’s defense against Iran and its militias. Israel has become a de facto security partner within U.S. Central Command, and its eagerness for normalization with Saudi Arabia poses a threat to Iran. Importantly, reports on Saudi coverage of Iranian domestic unrest and its apparent private investment in Iranian opposition media provided the kingdom with a powerful bargaining card.
On the other side of the Gulf, Iran is under pressure from both domestic protests and crippling international economic sanctions and diplomatic isolation. These factors increase Iran’s need for economic support, not only from China but also from its rich neighbors, led by Saudi Arabia. Although this might look like an ideal situation for Riyadh, it is not: Iran has a track record of lashing out at its neighbors when regime stability is at stake. Examples include the 1996 Khubar tower attacks and the 2019 attacks on oil infrastructure in Abqaiq and Khurais, leading to reports of an “imminent Iranian attack” following threats to Saudi Arabia amid Iranian protests last November. Tehran is also closer to achieving weapons-grade enriched uranium, which would likely increase Iran’s deterrence to a new level and unleash more hostile actions against its Gulf neighbor. China might economically and diplomatically sponsor a de-escalation between Iran and Saudi Arabia, but it doesn't necessarily mean that Beijing will intervene if Tehran decided to breach it.
The Main Takeaways
This agreement highlights the difference between Saudi Arabia’s relationship with China and its partnership with Russia. When it comes to foreign policy, the most central agreement between Russia and Saudi Arabia is the OPEC+ agreement. In fact, Russia’s agreement to sell Iran advanced military equipment and cyber warfare capabilities in return for Iran’s drones, which it has used in Ukraine, is a direct threat to Saudi Arabia’s security. The March 10 agreement gives Saudi Arabia a stake in drawing China away from a potential Russia-Iran-China axis that may embolden Iran’s offensive actions in the region, further empower it to escape U.S. and international sanctions on its economy, and increase Russian and Iranian encroachment on Saudi Arabia’s oil market share in China. Global power competition between the United States and China, Western shunning of Russia and Iran because of the war in Ukraine, and the clinical death of the Iran nuclear deal are already drawing the three countries closer. The agreement should be seen as a Saudi attempt to shield itself from getting caught in the middle of Western escalation with Iran, Russia, and China.
Finally, the fundamental Saudi position is that Iran has no role in the Arab world. This will remain a vector for Riyadh’s enhanced cooperation with the United States and Western powers to move from defense to deterrence against Iran. For the time being, Saudi Arabia is choosing to deal with Iran with a detached pragmatism; essentially, “We cannot get rid of them, and they can’t get rid of us.” Based on this logic, Saudi Arabia is relying on regulated coexistence in the Gulf and a mix of competition and containment in Syria and Iraq.
Turning the page on conflict with Iran will not be easy, even if the two countries respect the rules that they agreed on in Beijing. Riyadh will need to manage the complex link between Iran’s expectations for economic dividends from de-escalation with Saudi Arabia and the escalation of U.S.-led sanctions on economic cooperation with Iran. It will also need to mitigate potential spillover from Israel’s shadow war with Iran, Iran’s competing relationship with the United Arab Emirates, and adverse actions from Iran’s revolutionary guard and Iranian-backed militias across the region. For the time being, it seems that both governments in Riyadh and Teheran are determined to move closer.