KSA-Iran rapprochement | By Shah Meer


KSA-Iran rapprochement

In a historic agreement facilitated by China, Saudi Arab and Iran agreed to restore diplomatic relations – the two parties to the agreement assented to reopen embassies and cooperate on a range of issues in the region including the Yemeni and the Syrian crises.

The agreement has ushered a new phase in the Middle Eastern politics and has changed the regional geopolitical landscape and security apparatus, redefined the roles of extra-regional actors and accelerated exorbitantly the global distribution of power in favour of China in International politics. Clearly, China is the ultimate beneficiary of the deal due to its growing foothold in the region.

Arguably, the unprecedented deal is one of the links of the chain of the Chinese engagement in the region. To begin with, China signed a colossal and gigantic deal with Iran in 2021 widely known as 25-year Iran-China agreement of $400 billion that flooded Iranian markets with inexpensive Chinese goods. Commentators claim that the deal sold Iran to China. Nonetheless, it increased Chinese influence in Iranian policy circles as it brought ease in Iran’s international isolation.

Beijing has also significantly increased Riyadh’s dependency on Chinese goods and trade. Their trade increased from $500 million in 1990 to $87 billion in 2022. As part of oil imports, China imports three-times more oil from KSA than the US.

The Beijing-Riyadh nexus does not stop here. The KSA has agreed to sell China oil in Yuan instead of dollar, which is a dramatic and historical shift in Riyadh’s foreign policy, and an exacerbation for dollar which is virtually declining given that the massive currency swap agreements and rise of petro-Yuan and petro-Ruble.

The KSA is also not onboard with Washington in the latter’s grand strategy for outcompeting China and containing Russia. Along with its OPEC+ confederates, Riyadh, despite the American incitation and threats of punitive measures, cut the global oil imports approximately to two million barrels of oil per day resulting in soaring inflation worldwide. It increased Russian oil and gas revenues 28% making Russia more persistent to continue its Ukrainian front.

The China-GCC engagement is unprecedented too. The last visit of Xi Jinping to Saudi Arabia and his summits with Middle Eastern counterparts resulted in over thirty energy and investment deals. According to the observers of Middle East Institute, “Xi’s visit has been described as China’s highest and largest diplomatic engagement with Arab world since the PRC’s founding”.

The growing Chinese economic and diplomatic engagement in the region has geopolitical implications too. In the Syrian civil war Beijing’s position is crystal clear which is antithetical to the West’s. For instance, Syria’s President Basher-al-Assad was re-elected with 95% of the vote in 2021, which the western capitals rejected, and China, along with Russia, Iran and Belarus, endorsed the results.

Unlike the Syrian civil war, China’s designs in Yemen are motivated not only by its strategic vision of BRI, as much of China’s trade passes through the Gulf of Aden and Red Sea and Chinese growing interest to have sway on strategically important Yemeni ports, but also Beijing’s prudence and rational foreign policy to not to alienate neither Riyadh nor Tehran given that their geopolitical tension over Yemen.

—The Quetta-based writer occasionally contributes for the national press.