The agreement between Saudi Arabia and Iran to restore diplomatic relations, facilitated by China and signed in Beijing on 11 March, was a jolt to the geopolitics of the Middle East. While much attention is rightly focused on what the agreement – and China’s role in it, in particular – says about US influence in the region, it also has significant implications for the UK, for which the Gulf remains of high strategic importance.
Saudi Arabia and Iran’s commitment to work towards normalising their relations is an important development for the security and stability of the Middle East. Riyadh and Tehran are unlikely to resolve all their considerable differences anytime soon, but the exchange of ambassadors and reopening of diplomatic missions should create a channel through which they can discuss them in a more direct and straightforward manner. That is good for Gulf security, and provides at least a glimmer of hope for Yemen, Syria, Iraq, Lebanon and other parts of the region where the decades-old Saudi-Iranian rivalry has contributed to conflict and instability.
The fact that the agreement was signed under the auspices of China is just as significant. It is important to note that China cannot claim all the credit. The agreement is ultimately the culmination of a three-year process in which Saudi and Iranian officials repeatedly met publicly in Iraq, and much more quietly in Oman. China effectively stepped in towards the end to help the two sides over the line and formally commit to restoring diplomatic ties. How exactly Beijing has done this remains shrouded in mystery. There have been suggestions that it has offered some economic incentives to Iran, and that Saudi Arabia hopes that Chinese influence can moderate Iran’s regional behaviour, but whether Beijing has actually given any guarantees is unknown.
China, Iran and Saudi Arabia’s Interests Align
What is clear is that the agreement is in all three parties’ interests. For China, the single largest importer of Middle Eastern oil and gas, the security and stability of the Gulf is of vital importance. Reducing the likelihood that tensions between Saudi Arabia and Iran spill over into disruptions of oil and gas flows from the region by helping Riyadh and Tehran to talk to each other is sensible energy security risk management for Beijing.
Meanwhile, Saudi Arabia and Iran also have a mutual interest in putting their bilateral relations on a more regular footing. Ever since being elected in 2021, Iranian President Ebrahim Raisi has emphasised his desire for more engagement with the Islamic Republic’s neighbours, not least to defuse anti-Iran coalition-building between Western and regional states.
Saudi Arabia, on the other hand, is determined to make the most of its windfall oil revenues and build momentum in its economic development and diversification efforts, to which instability in the region and conflict with Iran pose a major threat. In fact, fearing that tensions over the Iranian nuclear programme – particularly with Israel and the US – could escalate, Saudi Arabia wants to ensure that Tehran understands and believes that Riyadh will not support military action against Iran and thereby avert potential retaliatory strikes against the Kingdom. In the past, Iranian officials have repeatedly declared that they would respond to any Israeli or US attacks by hitting back at targets in the Gulf – a threat that Saudi Arabia and its fellow Gulf Arab monarchies are taking seriously.
The Chinese-brokered agreement represents a watershed moment for the US role in the Gulf and wider Middle East, but also one that should not be blown out of proportion
Finally, Saudi Arabia and Iran have an obvious shared interest in expanding their ties with China, which both regard as their most important economic partner, and which they hope will take on a larger role in regional politics – from Tehran’s perspective so as to reduce US dominance in the region, and from Riyadh’s perspective as a hedge against further US disengagement and as a power potentially capable of keeping Iran in check.
US Disinterested Pragmatism
As for the US role in the Gulf and wider Middle East, the agreement does represent a watershed moment, but also one that should not be blown out of proportion. It is the first time that China – identified by the US as its great systemic competitor of the day and the coming decades – has made such a bold foray into the politics of the region, in which the US has long been the dominant global power. The agreement demonstrates the extent to which others – regional and international powers – are now setting the regional agenda.
However, it is also important to stress that this Saudi-Iranian agreement does not contradict US interests. Quite the opposite: Washington, and particularly Democratic administrations, have long urged Saudi Arabia and other traditional US partners in the region to find modes of accommodation with Iran. Former President Barack Obama’s 2016 call for ‘the Saudis and Iranians […] to find an effective way to share the neighbourhood’ still reverberates today. Furthermore, given the state of US–Iran relations and the fact that the Islamic Republic regards the US as posing a significant threat to its survival, Washington was hardly going to be able to mediate between Tehran and Riyadh. In other words, in this instance, China has taken on a role that the US simply could not play.
Another US administration might have taken a different, more emotional and zero-sum view regarding any sign of expanding Chinese influence in the region and diminishing pressure on Iran, seeing it as a loss of – or afront to – US power. But the Biden administration has adopted a more pragmatic approach and deprioritised the Middle East even more than its predecessors. That said, with its still enormous military presence in the region, the US nevertheless remains by far the most dominant security provider in the Middle East – including for the oil and gas traversing the Gulf on its way to China.
Where Does This Leave the UK?
The changing geopolitical landscape in the Middle East inevitably has significant implications for the UK and its interests in the region, particularly in the Gulf. The six Gulf monarchies collectively make up the fourth largest export market for the UK, and they are also critically important partners for the UK’s energy security and major sources of investment in UK real estate and businesses.
The importance of the Gulf to UK national interests was re-emphasised in the Integrated Review Refresh published last week, with the government declaring its commitment to ‘further deepening and strengthening’ relations with partners in the Gulf. The review further recognises the Middle East as a region ‘where there is significant competition for influence in the context of wider geopolitical shifts’, and identifies the Gulf as an area in which the UK and other allies of the US ‘need to step up our collective contribution to burden sharing’.
Beijing may not match the UK’s military assets in the Gulf anytime soon, but economically, its sway already far outweighs that of London
These are not new pledges. A decade ago, the government of David Cameron set out plans to return to ‘East of Suez’, but the strategy to expand the UK’s role in the Gulf lost momentum in the maelstrom of Brexit. Bilateral ties with individual Gulf monarchies have grown stronger over the past few years. With Saudi Arabia, for example, the UK has established a Strategic Partnership Council to strengthen collaboration in a range of fields including defence, energy, trade and investment; and with Qatar, it launched an annual Strategic Dialogue last month. But overall, UK–Gulf relations remain relatively piecemeal and devoid of a coherent strategic framework.
In 2016, then-Prime Minister Theresa May told Gulf leaders that ‘Gulf security is our security’. The Chinese-brokered Saudi-Iranian agreement to restore diplomatic relations should provide the impetus to re-examine what this means.
To date, the UK has generally regarded itself as the number two external power in the Gulf, perhaps alongside France, with a military presence in the region second only to that of the US (though by a considerable distance). An expanding Chinese role in the region could change this. Beijing may not match the UK’s military assets in the Gulf anytime soon, but economically, its sway already far outweighs that of London, and by bringing Riyadh and Tehran together it has demonstrated its ability to influence and shape regional politics in significant ways. This does not have to translate into a loss of UK influence, but it does highlight the need for the UK to more clearly define what its own objectives are in the region, whether and how they are affected by China, and how much it is willing to invest to pursue them.
This is arguably most pressing with regard to the UK’s policy towards Iran. Riyadh and Tehran’s declared intention to work towards reducing their tensions is generally in line with UK interests to reduce the likelihood of conflict in the region. However, it also comes at a time when London – together with its partners in Washington, Paris and Berlin – is adopting a more adversarial position towards Iran in response to Tehran’s support for Russia’s war in Ukraine, the renewed violent crackdown by the Iranian regime on its own people in recent months, and – perhaps most importantly – what appear to be further advances in Iran’s nuclear programme.
With the negotiations to revive the 2016 Iran nuclear deal – the Joint Comprehensive Plan of Action (JCPOA) – all but dead, the UK and its partners are scrambling to come up with new – ideally non-military – ways to prevent Iran from pursuing nuclear weaponisation. Past Western efforts to constrain Iran’s nuclear programme have generally relegated the Gulf monarchies to the role of bystanders. A core assumption of the JCPOA negotiations was that a deal between international powers and Iran would pave the way for a process to address regional security issues. With the Saudi-Iranian agreement, almost all Gulf monarchies now have their own direct channels of engagement with Iran. Whether and how these can become a foundation for a wider process that could include the nuclear file is at least worth exploring.
Such a process would inevitably also have to include China. In the Integrated Review Refresh, the UK speaks of its vison of ‘well-managed competition’ with China and other non-allied states, and suggests that there may be space to ‘engage constructively with the Chinese government’ on ‘shared priorities’. In the rapidly changing geopolitics of the Middle East, the Iranian nuclear programme – and Gulf security more generally – may well be one of the areas in which this intention to find a balance between competition and collaboration will be put to the test.