The Iran-Saudi agreement has survived a year – here’s how it can survive another

President Ebrahim Raisi, left, shakes hands with his Chinese counterpart Xi Jinping in Beijing. Iranian Presidency Office via AP

An agreement between Iran and Saudi Arabia to heal their previously fractious relationship, mediated with Chinese involvement, survived its first year despite a host of misperceptions guiding both sides.

For the agreement to continue and evolve beyond a tactical detente, the two parties must acknowledge its real limits and potential. Neither side appears ready to let go of its core ideological stance (in the short term, at least) nor does China appear ready to intervene in any major way to safeguard the agreement.

The success of the bilateral relations hinges then on realising the untapped power at the disposal of Iranian and Saudi authorities. A regional solution anchored on a gradated approach is the safest bet to lasting peace and order. Having successfully fulfilled confidence-building measures during the first year of the agreement, an update is overdue. That would be one marked by clearing misperceptions and advocating specific economic and security projects across the second year of the agreement.

Misperception of the extent of the Chinese role in bringing about the agreement remains widespread insofar as the Kingdom and the Islamic Republic are concerned, though it could be categorised, for brevity, into two types: real and engineered. In terms of the first, there is a persistent view among some Saudi and Iranian circles that China, due to its extensive economic ties, exercises considerable leverage over both parties.

Saudi Crown Prince Mohammed bin Salman (L) and Iran's president Ebrahim Raisi (R) in Riyadh. Saudi Press Agency / AFP

This leverage (and the asymmetry as well as trust it entails) renders China, this logic goes, as far more capable of acting as a guarantor to a detente than the US (or Russia or the EU). In other words, China’s expanding footprint in the Middle East, as the premier trading partner and energy consumer of Saudi Arabia and Iran, endows it with unparalleled capacity to punish violations to the agreement. These are, in our opinion, the delayed reverberations of the much-misunderstood 25-year Sino-Iranian “strategic treaty”, the content of which has exaggerated China’s long-term economic and security commitments towards Iran.

The engineered misperception can also be sourced back to Riyadh and Tehran. Some policymakers, per our own conversations, are aware of the limits of Chinese willingness to exercise its influence in defence of the agreement. Rather, they see China, in light of intensifying Sino-American rivalry, as a useful means by which to signal their separate messages of displeasure (and solicitations) to the US, while also strengthening ties with China. This may explain why there are conflicting Saudi and Iranian narratives (some at the very highest levels) about who exactly requested China’s mediation (and when), all of which ultimately credit the personal role played by President Xi Jinping in bringing the agreement to fruition.

In opting for a Chinese mediator, Saudi and Iranian actors have presented this agreement as marking a transformative new phase in China’s regional and global power. This narrative has naturally found reception among audiences hyper-focused on great power competition. The late Henry Kissinger (much beloved and feted by the Chinese leadership) compared the 2023 detente to Nixon’s 1971 visit to Maoist China, arguing that Beijing had changed “the terms of reference in international diplomacy”.

Acclaimed Chinese experts on the Middle East, such as Niu Xinchun, Li Shaoxian and Ding Long, have celebrated the agreement in similar terms, casting it as indicative of the success of Chinese diplomatic practices when compared to the US. In the meantime, American analysts in Washington and Republican-aligned conservative commentators have decried it as confirming the Biden administration’s incompetence in managing the China threat.

The tone of Chinese diplomats when discussing the agreement belies the fact that they do not view their country’s role as that of a guarantor

These misperceptions – whether from the vantage point of Riyadh, Tehran or even Washington – miss the fact that China is not a guarantor. Its two decades-long record of mediation efforts in Palestine, Sudan, Libya and Sudan show that its modus operandi does not include pressuring parties to come to an agreement.

Instead, successful outcomes of mediational intervention – and the Saudi-Iranian detente is really the lone example here – are contingent upon prior buy-in from the concerned actors. Five rounds of talks hosted by Iraq and Oman, and region-wide interest in de-escalation since the Abqaiq-Khurais attacks in Saudi Arabia in 2019, have meant that there existed an immensely suitable environment and moment for Chinese “quasi-mediation” (as the academics Sun Degang and Yahya Zoubair call it).

This Chinese soft-handedness to mediation also applies to its ability (and willingness) to enforce the agreement. One line of thought, prevalent in Saudi Arabia, is that if Iran violates the agreement it would damage its relations with China and invite the latter to impose some kind of punishment. But such behaviour would be quite out of sync with Chinese diplomatic approaches. There are many scenarios where Tehran (or Riyadh) could present a credible case, on national security grounds, of breaking the agreement that would be convincing (or understandable) to Beijing.

The tone of Chinese diplomats when discussing the agreement belies the fact that they do not view their country’s role as that of a guarantor. The word “hope”, for instance, peppers the statements of Wang Di, the Director General of the department of West Asian and North African Affairs at the Chinese Ministry of Foreign Affairs, and Wang Yi, the Foreign Minister himself. They affirm that China would play a “constructive role” in advancing and deepening the Saudi-Iranian detente, but the onus for its success is squarely a regional one.

The second year of the agreement kicks off with a solid foundation. Both parties know each other better, given their impressively continuous and heightened communication and direct meetings across various levels, political and technical, during the past year. Realism is increasingly characterising the calculus of both – even if in varying degrees – when it comes to acknowledging the redlines and differences of the other party. No alliance is expected, or frankly sought, but the ability to manage a turbulent region and extract win-win concessions for both sides is marking the elements of a reconfigured regional approach.

Continued focus on security and a fresh approach to the economy will best serve year-two discussions. The war in Yemen is not over. Supporting the de-internationalisation of Yemen and an intra-Yemeni dialogue that takes into account all grievances and demands is no easy undertaking for all parties involved, including Saudi Arabia and Iran. But it will be necessary, especially given the slow pace of talks this past year and the added complications arising from the current conflict in the Red Sea. The Durra/Arash gas field has been a point of contention between Iran on the one side and Saudi Arabia and Kuwait on the other. Bringing the file into the rubric of the agreement will prove a useful stress test for it.

Intertwined interests are the best guarantor for peace and security. Joint economic projects that demonstrate benefit to both sides will score a point for policymakers and citizens at large who would feel the impact of these changes on the ground. Sanctions on Iran stand in the way of actualising several projects, but there is room in unsanctioned items like select food items, agriculture commodities, medicines and medical supplies, and even the opportunity to press for partial relief that serves the goal of reducing tensions in the Middle East.

The road to a lasting Saudi-Iranian agreement is fraught with challenges, yet it is a promising undertaking to advance peace and security in a region in dire need for both. Clearing misperceptions, understanding the Chinese role and fronting a regional approach and specific projects this year are necessary steps towards ensuring that the agreement holds.