Let’s Talk About The Iran-Saudi Peace Deal Brokered By China

The world’s isolationist superpower is increasingly looking outwards.

Earlier this month, the world was surprised by an announcement: Iran and Saudi Arabia, bitter enemies and the sources of much of the Middle East’s turmoil, have agreed to reopen diplomatic ties and restart an old trade deal.

What’s more, the talks weren’t co-ordinated by a foreign power with long-held interests in the region, like Russia or the US, nor were they negotiated by an influential country in the neighbourhood like Turkey or the UAE. This time, the credit went to China.

What does this mean for the Middle East? Why is China suddenly getting involved? And how did it succeed where so many others have failed? Read on to find out.

Are Saudi Arabia and Iran best buddies now?

That’s a lot to ask for, since these two regional powers have long been bitter enemies.

Until the 1960s, relations between the two were quite limited, in part because of religious differences (Saudis mostly follow the Sunni branch of Islam, while Iran represents the Shia community) but also because Iran recognized Israel as a legitimate state.

The two became closer in that decade when the United Kingdom withdrew from its colonies in the region, leaving Iran and Saudi Arabia to take joint stewardship of regional issues. They joined the same regional groups, and there was a dialogue between King Faisal of Saudi Arabia and the Shah of Iran, including this fascinating exchange.

The Shah: “Please, my brother, modernize. Open up your country. Make the schools mixed women and men. Let women wear miniskirts. Have discos. Be modern. Otherwise I cannot guarantee you will stay on your throne.

King Faisal: “Your majesty, I appreciate your advice. May I remind you, you are not the Shah of France. You are not in the Élysée. You are in Iran. Your population is 90 percent Muslim. Please don’t forget that.”

If you were curious, the Shah lasted longer: he was overthrown and went into exile four years after the assassination of the King.

But even in this relatively amicable period, there were Saudi concerns about Iran’s military influence in the region, which highlights a longstanding issue in the relationship between the two: Iran is much more populous, and its military has long been recognised as more capable despite far lower defence spending.

And that brings us to the next part of the relationship: the Iranian Revolution. When the Shah (a US-backed dictator) was overthrown in 1979, a repressive but legally secular state became an Islamic theocracy ruled by Ayatollah Khomeini. Iran, formerly a close US ally, now became one of the most anti-American states on the planet.

Relations were bitter in the 1980s, as the Saudis leaned heavily on the US to protect them from Iranian hegemony, and Iran denounced Saudis as heretics and lapdogs of the US.

Saudi Arabia helped fund Saddam Hussein’s failed invasion of Iran in this period, and relations collapsed in 1987 when hundreds of Shia Muslims were killed while demonstrating in Mecca in 1987 and the Saudi embassy in Tehran was destroyed in response.

Despite a brief rapprochement during and after the Gulf War (both countries condemned Saddam Hussein’s invasion of Kuwait, these two states have often found themselves on opposite sides of proxy wars throughout the Middle East since the turn of the millennium: in Yemen, in Syria, in Iraq and in Lebanon, despots and militias have been pawns in a Cold War between these two.

Some other tensions between the two include

• their allies: during the Cold War, Iran came to depend on Russia as a counterweight to American support for Saudi Arabia
• oil: Saudi Arabia, being much richer than Iran, has long sold oil at remarkably cheap prices as a form of economic war against countries like Iran and Venezuela
• ideology: besides the religious differences, which are very real, the revolutionary Iranian government condemns as Saudi monarchy as an illegitimate form of governance
• the Iranian nuclear programme: Saudi Arabia is utterly opposed to their greatest enemy developing nuclear weapons

Given all that, it’s unsurprisingly to expect much from this deal. They will both still fund terrorists when convenient, trust will remain low, and the arms race will continue. However, we might expect fewer Iranian missiles to hit Saudi oil tankers, and there might be a more productive dialogue on proxy conflict de-escalation.

What does China have to do with it?

China has long been a strange paradox: a country totally dependent on economic globalization, but apparently disinterested in global affairs.

However, having become the world’s clear second superpower, China seems increasingly interested in expanding its diplomatic global reach. If it wants to invade Taiwan or prevent neighbours from forming an anti-China coalition, it needs to begin cultivating international relationships.

Although the Middle East is not in China’s backyard, its crucial importance in the global oil market makes it a vital strategic interest for China. As the world’s leading industrial nation, it is even more dependent on energy than the service-oriented advanced economies of the West. Forming relationships that insure a steady supply of oil and gas makes total sense.

And China increasingly seems keen on undermining the West by presenting itself as a more peaceful and less imperialistic alternative to the Western liberal-democratic order. What better way to show off the value of benign authoritarianism than by brokering peace (between two dictatorships) in the corner of the globe that has witnessed the West’s greatest failures?

How did China get them to agree?

China was smart enough to take advantage of existing tensions between the US and Saudi Arabia. That traditional relationship has suffered badly due to Biden’s insistence on criticizing Saudi Arabia for its human rights violations, especially the assassination of Jamal Khashoggi.

Saudi Arabia mightn't want to sever ties with the US, but it is increasingly comfortable with courting other partners like Russia and China — partners which are less likely to scold them.

The link between China and Iran is less confusing. Iran is heavily dependent on China as a market for its oil exports since US sanctions limit its access to oil markets, and Iran has also recently been accepted as a full member of the Shanghai Cooperation Organisation, a regional grouping led by Russia and China which ties together most of Asia.

Iran hopes that these connections will give it new ways of bypassing Western sanctions. In turn, the enormous leverage China holds over Iran has led the Saudis to believe that China might be able to reign Iran in, something the US could never promise.

More broadly, this deal was helped by China's lack of geopolitical baggage in this region. There are few clerics or terrorists in either country who spend much time resenting China, and China also doesn’t have a US-style neo-colonial reputation amongst the general public.