Iran-Saudi peace deal and Middle East politics
SINCE the declaration of the Iran-Saudi Arabia peace deal, China’s role as a mediator has taken the world by surprise. This deal has not only ended a long thaw between the two major regional rival states but is also indicating a major shift gradually becoming apparent in the power dynamics of the Middle East region. Although the details of the deal have not made public yet the signing of the deal in Beijing and the gratitude shown by the two sides towards the efforts of Beijing are signalling a major shift in the Chinese approach towards the region as well. So far China’s involvement in the Middle East was limited to economic and trade activity. China remained less significant in the Middle Eastern politics. And it has not played a mediatory role so far. On the other hand, the role of regional states cannot be overlooked in this scenario. Iraq has been active in mediation between Saudi Arabia and Iran and both states have begun their negotiations with the help of two states of the Gulf region Iran and Oman in 2021. However, China played an important role in reaching the agreement.
The recent development in the region is significant in many aspects. One of the most important aspects is the shift in US-Saudi Arabia relations. China’s emergence in ME politics and its role in this agreement indicates that Saudi Arabia gradually coming out of the US clout. Saudi Arabia has traditionally been considered a US ally and a supporter of US policies in the region. However, things started changing with the eruption of Russia Ukraine war. The impact of this conflict and crude oil prices in the international market have become a major factor behind changing Saudi foreign policy. Time will decide whether it’s a US strategy or is it the beginning of fading US role in a region that has been a US sphere of influence as of now.
Whatever the case, the impact of changing Saudi policies is slowly becoming evident in the region. As we know that Saudi state is conventionally characterized as a neo-patrimonial rentier state that emerged out of a combination of traditional domestic social structures and oil wealth. Sustaining oil prices and reducing oil production have become crucial for the development of the Saudi economy. Therefore, Saudi Arabia has approached Russia, the largest non-OPEC state, for the consolidation of oil prices in the international market. Rapprochement towards Iran is also linked with it. Market forces play a decisive role in the capitalist market economy. Therefore, market interests have caused strained relations between the largest oil producer in the world Saudi Arabia and the largest oil consumer in the world the US.
On the other hand, China which has emerged as the largest oil importer in the world looks ready to take full advantage of this scenario. China has offered Saudi Arabia and other GCC countries to start the oil trade in YUAN instead of the US dollar. Speaking at the historic Arab Summit in December 2022, Chinese President Xi Jinping proposed to the Gulf Arab leaders that China would work to buy oil and gas in Yuan, a move that would support Beijing’s goal to establish its currency internationally and weaken the U.S. dollar’s grip on world trade and the interests of imperialist hegemony. Saudi Arabia realizes that its policy about Iran and proxy wars in the region are detrimental to its oil trade and economic progress as well as to regional peace. These policies require serious reconsideration and re-evaluation.
Saudi Arabia and economic giant China both sent strong messages during Xi’s visit on “non-interference” at a time when Riyadh’s relationship with Washington has been tested over human rights, energy policy and Russia. Iran also realizes that in the wake of a recent wave of domestic protests apparently against the theocratic government policies on woman’s rights, curbing media are actually a mass reaction against the government’s failure to control the economic crisis, unemployment, inflation and decreasing standard of living. As the Iranian government has been spending lots of resources on regional proxy wars and Iranian involvement in Syria and Yemen, instead of domestic issues. Moreover, US sanctions have added to its economic difficulties. Thus, deterioration in US-Saudi relations seems to be an opportunity to re-evaluate its policies towards its regional neighbour Saudi Arabia. China’s growing economic relations with Iran and its participation in China-led connectivity projects have convinced Saudi Arabia that it is not possible to isolate Iran at the international level. Biden Administration’s decision to restart negotiations on US-Iran nuclear deal is indicative of its growing weakness in regional affairs. The US policies in Libya, Yemen, Syria and Iraq have caused so much resentment for it.
And despite recent US sanctions against Russia in the Russia-Ukraine crisis, could not prevent many regional powers to expand their oil trade with Russia. The fluctuation in oil and gas prices in the international market in the wake of the Ukraine crisis has increased pressure on Gulf countries for increasing oil production. In this scenario, US pressure to lower the oil prices and increase production is directly in conflict with the economic interests of Saudi Arabia. Such pressure proved counter-productive and instead paved the way for China’s growing role in the region by bridging the gap between two regional oil giants Saudi Arabia and Iran. It is equally a great blow to US and Israeli interests in the region. The recent Saudi-Iran deal is seen as a landmark in regional politics, an impressive show of Beijing’s growing role in the Middle East and eventually in global politics. Although time will prove its worth, it seems that the power dynamics of the Middle East are taking a decisive turn and a new chapter in regional politics is about to commence.
—The writers are Assistant Professor in the Department of International Relations at Federal Urdu University Karachi and Islamabad respectively.
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