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With China at the centre of the geopolitical picture, Iran and Saudi Arabia agreed to restore diplomatic ties after their seven years of bilateral estrangement in West Asia. The deal, which entails Iran and Saudi Arabia reopening their embassies and missions in each other’s cities within two months, indicates a shifting of sands in Beijing's favour in a region where the United States has waged conflicts and spent hundreds of billions of dollars in providing security for its allies. 

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"The agreement between Saudi Arabia and Iran, which China mediated, reflects a new reality in West Asia, namely, that China is now a geopolitical and economic power in the region with the ability to influence bilateral relationships and security dynamics," Washington-based Middle East Institute's Mohammed Soliman, the intellectual architect of I2U2 (India, Israel, United Arab Emirates and the United States) group told WION. 

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While the spotlight is on China's increasing influence in West Asia as it wades from economic sphere to substantive mediation efforts in the region, it does not displace the United States as the primary security actor in the Gulf, argues Anna Jacobs, senior Gulf Analyst at Brussels-based International Crisis Group.

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Saudi Arabia is the largest Foreign Military Sales customer of the United States, with over $100 billion in active FMS cases, according to the latest data published by the US State Department. 

"However, China-brokered Saudi-Iran deal does reflect Beijing's increasing influence in the Gulf beyond the economic sphere. China seems ready to wade more substantively into dialogue and mediation efforts in the region, which reflects China's rising geopolitical clout," Jacobs added.

Beijing's diplomacy outfoxes West

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China in recent years has spent significant diplomatic capital to build closer economic ties with Iran and Saudi Arabia, the Shia and Sunni powerhouses of the Islamic world rivalling each other's geostrategic trajectories. 

"The Saudi-Iran deal shows a desire from both countries to deal with their differences through dialogue and diplomacy, rather than conflict and proxy competition," Jacobs said.

Chinese leader Xi Jinping raised the idea of the talks most recently during a state visit to Riyadh in December, according to people familiar with the matter cited by the Wall Street Journal. 

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While Riyadh is an important oil supplier to the world’s second-largest economy, Beijing has made a special effort to make significant oil purchases from Tehran despite the United States-led sanctions against Iran for its reported nuclear belligerence in the region. 

Saudi-Iran ties: The hostilities of recent past

The Saudi-Iran ties soured in January 2016 after the execution of a prominent Saudi Arabia Shia cleric Ayatollah Sheikh Nimr Baqir al-Nimr, commonly referred to as Sheikh Nimr. Following the execution, a mob in Tehran stormed the Saudi embassy while another set the Saudi consulate in Mashhad on fire. Mashhad is Iran's second most populous city located about 900 km east of Tehran. 

The already strained Saudi-Iran ties were severed shortly after. 

In 2019, the two sides were on the brink of war when Iran was blamed for missile and drone attacks on a Saudi oil field.

Saudi-Iran ties restored: Implications for conflicts in West Asia

Since the beginning of the civil war in Yemen in 2014, Iran has been accused of backing Houthi rebels in Yemen, a Shiite movement fighting Yemen's Sunni-dominated government. But as part of the deal, Iran has reportedly pledged to halt attacks against Saudi Arabia, including from Houthi rebels it has admitted supporting 'politically' in the past.

"It would be difficult for Saudi Arabia to agree to a roadmap for normalising relations with Iran without serious security assurances from Iran in Yemen, as well as on a host of other issues," Jacobs said, reflecting on the importance of restoration of a number of bilateral agreements between Tehran and Riyadh after Friday's breakthrough, including a Security Cooperation Agreement. 

But Soliman urges caution on a wider expectation related to the cessation of hostilities in the region. 

"There are no clear guarantees from China that it might push Iran to change its approach to the region, particularly in Yemen," Soliman advises. 

In Yemen, a United Nations-negotiated ceasefire between the Houthi rebels and Yemeni government expired in October 2022 but a de-facto truce continues to remain in place, leading to a pause in fighting. 

After Friday's breakthrough, the need for a more permanent ceasefire in Yemen are being felt. 

"In Yemen, there is already a de-facto truce without a formal truce, which has been positive, but the Saudi-Iran deal suggests there could be a more permanent ceasefire deal in the making in Yemen," Jacobs said. 

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