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HomeBlogIran-Saudi Talks: What Lies Ahead for Bilateral Relations & Regional Security

Iran-Saudi Talks: What Lies Ahead for Bilateral Relations & Regional Security

By Younes Zangiabadi and Pouyan Kimiayjan

Background

On August 4, 2022, the Institute for Peace & Diplomacy (IPD) hosted the inaugural expert discussion for a new project launched by the Middle East program called “Iran Strategy Deconstructed”. This project aims to create an international network of experts and scholars and organize regular strategic discussions on Iran, its foreign affairs and regional policies. In different forms and capacities, these experts engage with one another to deconstruct various dimensions of Iranian foreign policy and help gain a multi-faceted understanding of the challenges and opportunities for sustainable peace and security in the Middle East region.

In the first discussion session, IPD hosted high-level presenters from Riyadh and Tehran who provided insider views of the strategic debates in their capitals on the following topics: the state of Iran-Saudi talks, prospects for rapprochement between the two counties, and its regional and international implications.

Thus far, Iran and Saudi Arabia have held five rounds of direct negotiations through Iraqi mediation in Baghdad. In recent weeks, there have been reports indicating a mutual desire by the two sides to elevate their negotiations to the political level and move towards re-establishing diplomatic relations.

Around 30 senior experts invited from Canada, the United States, Europe, Iran, Saudi Arabia, and other regional countries participated in this session and some contributed to the discussion following the presentations delivered by the speakers from Riyadh and Tehran. The discussion was held under the Chatham House Rule. The following is a summary of the key points raised by the participating experts.

Executive Summary

  • After a series of intense bilateral talks between Tehran and Riyadh, a diplomatic breakthrough is just around the corner with both countries prepared to re-establish diplomatic relations.
  • The Baghdad talks mark a strategic shift in Saudi regional policy — not a tactical one with the Kingdom displaying increasing interest to work on initiatives born out of the region to balance the Abraham Accords — an initiative spearheaded by the United States for the region.
  • The Kingdom no longer considers Washington as a reliable partner in dealing with the Islamic Republic following the US’s hesitation to back the country in responding to Iran-linked attacks in recent years. Moreover, Saudi Arabia views tensions with Iran as a significant obstacle to reaching its Vision 2030 targets.
  • While Tehran carefully welcomes such a shift in Saudi regional approach, it still expects no more than a detente and a return to the pre-Arab Spring era with Riyadh.
  • Threatened by Israel’s growing influence in the GCC region, Iran understands that the continuation of animosity with Saudi Arabia may push the Kingdom closer to Israel and facilitate the formation of an Arab-Israeli coalition against the country.
  • Even in the case of renewed diplomatic relations, there will be other contentious issues that remain unresolved between the two countries such as the civil war in Syria, Hezbollah operations in Lebanon, and the presence of Iranian-backed militias in Iraq and Yemen. Following the normalization of relations, there is a higher chance of resolving these issues diplomatically.

Wending Through the Trust-Building Phase

As regional rivals predating the establishment of the Islamic Republic, Iran and Saudi Arabia have long viewed each other as strategic competitors that aim to shift the regional balance of power against the other. Nonetheless, their leaders, for the most part, managed to prioritize restraint in engaging with one another to avoid costly conflicts.

From Iran’s perspective, this status quo in bilateral relations changed in the aftermath of the 2011 Arab uprisings when the Saudis became more disruptive and assertive in several Arab theatres across the Middle East and North Africa region.

From sending troops to Bahrain and intervening in Egypt in support of Abdel Fattah El-Sisi to backing opposition forces in Syria and Lebanon, Iran found it necessary to update its regional strategy and posturing to match the new reality on the ground.

Calling it a regional containment policy, Iran became more active in expanding its regional influence through its proxies from Iraq and Syria to Lebanon and Yemen to push back against the Saudi influence in the region. Occasionally, Iran-backed forces extended the war into Saudi territory by targetting the oil facilities in the country. Under unprecedented economic pressure by President Trump’s maximum pressure campaign, Iran was paying a heavy price for overusing its limited resources to deter Saudi regional ambition under the leadership of the new Crown Prince Mohammed bin Salman.

Having experienced the devastating consequences of proxy war complemented by the departure of President Trump from the White House, both countries, thanks to Iraqi mediation, launched the Baghdad dialogue process, engaging in bilateral talks to resolve their security concerns in the region.

With the most Arabist administration in Iranian history, President Ebrahim Raisi and Foreign Minister Hossein Amir-Abdollahian are more eager and interested in engaging the Arab world than any of their predecessors. Trusted by the establishment, this government has real potential to bring about major changes in Iran’s relations with its Arab neighbours including Saudi Arabia in particular.

Saudi Arabia’s willingness to engage Iran and resist joining the Abraham Accords must be viewed as the Kingdom’s new regional strategy to balance forces and sustain peace and security in the region. The recent rejection of Washington’s initiative to form an Arab-Israeli alliance against Iran — proposed during President Biden’s recent trip to the Kingdom — indicates Saudi’s seriousness in pursuing an independent regional policy.

Overall, these new developments can be seen as trust-building measures taken by both countries to pave the way for re-establishing diplomatic relations and returning to the pre-Arab Spring era.

The Regional & International Factors at Play

The Baghdad dialogue marks a shift in Iran’s regional policy. Tehran will continue these talks under a ‘containment through engagement’ strategy until there is detente in bilateral relations and the two countries can move toward stabilization–as seen in the 2001 security agreement between Iran and Saudi Arabia. Although returning to President Khatami-era’s level of bilateral relations will be an unlikely scenario due to the new security arrangements in the region.

Defined by Raisi’s “Neighborhood Policy” — which mainly rests on fostering economic relations with neighbouring countries and non-Western powers — Tehran seeks new partnerships in the region as its hope for a partnership with Western powers was dashed following US withdrawal from the nuclear deal.

Iran also sees real benefits in engaging with Saudi Arabia as the country aims to reduce American presence in the region and defuse possible Western pressure in the future. To achieve such objectives, Tehran needs to resolve its tensions with Saudi Arabia.

In the case of the nuclear deal, it is in Iran’s interest to have the Saudis onboard with the deal or at least in a neutral position. It is important to note that the GCC states including Saudi Arabia, unlike in 2015, are now in favour of reviving the nuclear deal as a positive development for their national security and regional stability.

For Tehran, the strengthening of ties with GCC countries, except for Qatar, largely depends on relations with the Saudis, which Iran finds strategically vital to ensure a GCC neutral position in case of a military confrontation with Israel. The same logic applies in case there is another Republican administration in power in 2024.

Meanwhile, the conflict in Ukraine has spurred opportunities for oil-producing nations in the Middle East — including Iran and Saudi Arabia. This new dynamic encourages a more pragmatic relationship between the two countries beyond security matters.

The Impact of Nuclear Talks on Baghdad Dialogue

The restart of JCPOA negotiations has impacted the security dialogue between Tehran and Riyadh. The US tendency to rejoin the JCPOA has provided room for regional dialogue, as regional powers have a fear of being left out–particularly with the prospect of an emboldened Iran following the revived nuclear deal.

Amid the bilateral talks, Saudi Arabia wants to be seen as a constructive player to secure briefings by the negotiating parties on the latest developments in the nuclear talks. The Saudis also view the JCPOA, if revived, as a foundation upon which other issues of concern can be addressed with Iran. Thus, a failure of the talks, from their perspective, will be destructive and costly for the region as experienced during the Trump years.

While Saudi Arabia claims that diplomatic relations will be likely renewed regardless of the outcomes of the Vienna talks, the common understanding in Tehran is that Riyadh, will not extend a helping hand when finds Iran vulnerable under US pressure. As a result, Islamic Republic is not considering speeding up the upgrading of bilateral ties beyond re-establishing diplomatic relations.

Conclusion

The Baghdad dialogue will likely soon move from the security track to a political one, leading to the revival of diplomatic relations between Iran and Saudi Arabia. This provides a unique opening for both countries to engage in direct diplomacy — without a need for a mediator — to reach a compromise on other remaining issues of mutual concern across the region.

The outcome of the Iran nuclear deal will be the most important element, impacting the prospect of Iran-Saudi relations. If revived, it will help accelerate regional diplomacy between Tehran and Riyadh in the short term, which would also serve Raisi’s regionalist administration in pursuing its neighbourhood policy. If not revived, Saudis seem to be still willing to establish a direct diplomatic channel with Iran to discuss regional issues while Iranians seriously doubt such cooperative engagement is a possibility if Washington is not onboard.

Irrespective of all the regional and international developments, both countries seem to have concluded that the continuation of their proxy war in the region is a zero-sum game with no ultimate winner. Indeed, this mutual understanding is what is deriving this rapprochement between Iran and Saudi Arabia. Whether this mutual understanding stands in the long term is a strategic question that decision-makers are assessing in Tehran and Riyadh to update their threat perception of a regional rival

Younes Zangiabadi (@YounesZangi) is the co-founder and Executive Vice President of the Institute for Peace & Diplomacy.

Pouyan Kimiayjan (@k_pouyan) is a Research Associate at the Institute for Peace & Diplomacy.

Panel 4: Pathways to Manage Non-Proliferation in the Middle East (4:30 PM - 5:45 PM ET)

The Western powers have failed to effectively manage the increasing threat of proliferation in the Middle East. While the international community is concerned with Iran’s nuclear program, Saudi Arabia has moved forward with developing its own nuclear program, and independent studies show that Israel has longed possessed dozens of nuclear warheads. The former is a member of the treaty on the Non-Proliferation of Nuclear Weapons (NPT), while the latter has refused to sign the international agreement. 

On Middle East policy, the Biden campaign had staunchly criticized the Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal and it has begun re-engaging Iran on the nuclear dossier since assuming office in January 2021. However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East. 

This panel will discuss how Western powers and multilateral institutions, such as the IAEA, can play a more effective role in managing non-proliferation efforts in the Middle East.  

Panelists:

Peggy Mason: Canada’s former Ambassador to the UN for Disarmament

Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)

Ali Vaez: Iran Project Director, International Crisis Group

Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast

David Albright: Founder and President of the Institute for Science and International Security

 

Closing (5:45 PM – 6:00 PM ET)

Panel 3: Trade and Business Diplomacy in the Middle East (3:00 PM - 4:15 PM ET)

What is the current economic landscape in the Middle East? While global foreign direct investment is expected to fall drastically in the post-COVID era, the World Bank reported a 5% contraction in the economic output of the Middle East and North African (MENA) countries in 2020 due to the pandemic. While oil prices are expected to rebound with normalization in demand, political instability, regional and geopolitical tensions, domestic corruption, and a volatile regulatory and legal environment all threaten economic recovery in the Middle East. What is the prospect for economic growth and development in the region post-pandemic, and how could MENA nations promote sustainable growth and regional trade moving forward?

At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic.

This panel will investigate the trade and investment opportunities in the Middle East, discuss how facilitating economic engagement with the region can benefit Canadian and American national interests, and explore relevant policy prescriptions.

Panelists:

Hon. Sergio Marchi: Canada’s Former Minister of International Trade

Scott Jolliffe: Chairperson, Canada Arab Business Council

Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar

Nizar Ghanem: Director of Research and Co-founder at Triangle

Nicki Siamaki: Researcher at Control Risks

Panel 2: Arms Race and Terrorism in the Middle East (12:00 PM - 1:15 PM ET)

The Middle East continues to grapple with violence and instability, particularly in Yemen, Syria and Iraq. Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel. 

On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region. This panel will primarily discuss the implications of the ongoing arms race in the region and the role of Western powers and multilateral organizations in facilitating trust-building security arrangements among regional stakeholders to limit the proliferation of arms across the Middle East.

 

Panelists:

Luciano Zaccara: Assistant Professor, Qatar University

Dania Thafer: Executive Director, Gulf International Forum

Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University

Barbara Slavin: Director of Iran Initiative, Atlantic Council

Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters

Panel 1: Future of Diplomacy and Engagement in the Middle East (10:30 AM-11:45 AM ET)

The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table. From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges. 

In this evolving landscape, Western powers will be compelled to redefine their strategic priorities and adjust their policies with the new realities in the region. In this panel, we will discuss how the West, including the United States and its allies, can utilize multilateral diplomacy with its adversaries to prevent military escalation in the region. Most importantly, the panel will discuss if a multilateral security dialogue in the Persian Gulf region, proposed by some regional actors, can help reduce tensions among regional foes and produce sustainable peace and development for the region. 

Panelists:

Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University

Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft

Ebtesam Al-Ketbi: President, Emirates Policy Centre​

Jon Allen: Canada’s Former Ambassador to Israel

Elizabeth Hagedorn: Washington correspondent for Al-Monitor

Panel 4: Humanitarian Diplomacy: An Underused Foreign Policy Tool in the Middle East (4:30 PM - 5:30 PM ET)

Military interventions, political and economic instabilities, and civil unrest in the Middle East have led to a global refugee crisis with an increasing wave of refugees and asylum seekers to Europe and Canada. Moreover, the COVID-19 pandemic has, in myriad ways, exacerbated and contributed to the ongoing security threats and destabilization of the region.

While these challenges pose serious risks to Canadian security, Ottawa will also have the opportunity to limit such risks and prevent a spillover effect vis-à-vis effective humanitarian initiatives in the region. In this panel, we will primarily investigate Canada’s Middle East Strategy’s degree of success in providing humanitarian aid to the region. Secondly, the panel will discuss what programs and initiatives Canada can introduce to further build on the renewed strategy. and more specifically, how Canada can utilize its policy instruments to more effectively deal with the increasing influx of refugees from the Middle East. 

 

Panelists:

Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto

Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada

Amir Barmaki: Former Head of UN OCHA in Iran

Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross

Panel 3: A Review of Canada’s Middle East Engagement and Defense Strategy (3:00 PM - 4:15 PM ET)

In 2016, Canada launched an ambitious five-year “Middle East Engagement Strategy” (2016-2021), committing to investing CA$3.5 billion over five years to help establish the necessary conditions for security and stability, alleviate human suffering and enable stabilization programs in the region. In the latest development, during the meeting of the Global Coalition against ISIS, Minister of Foreign Affairs Marc Garneau announced more than $43.6 million in Peace and Stabilization Operations Program funding for 11 projects in Syria and Iraq.

With Canada’s Middle East Engagement Strategy expiring this year, it is time to examine and evaluate this massive investment in the Middle East region in the past five years. More importantly, the panel will discuss a principled and strategic roadmap for the future of Canada’s short-term and long-term engagement in the Middle East.

Panelists:

Ferry de Kerckhove: Canada’s Former Ambassador to Egypt

Dennis Horak: Canada’s Former Ambassador to Saudi Arabia

Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)

David Dewitt: University Professor Emeritus, York University

Panel 2: The Great Power Competition in the Middle East (12:00 PM - 1:15 PM ET)

While the United States continues to pull back from certain regional conflicts, reflected by the Biden administration’s decision to halt American backing for Saudi Arabia’s intervention in Yemen and the expected withdrawal from Afghanistan, US troops continue to be stationed across the region. Meanwhile, Russia and China have significantly maintained and even expanded their regional activities. On one hand, the Kremlin has maintained its military presence in Syria, and on the other hand, China has signed an unprecedented 25-year strategic agreement with Iran.

As the global power structure continues to shift, it is essential to analyze the future of the US regional presence under the Biden administration, explore the emerging global rivalry with Russia and China, and at last, investigate the implications of such competition for peace and security in the Middle East.

Panelists:

Dmitri Trenin: Director of Carnegie Moscow Center

Joost R. Hiltermann: Director of MENA Programme, International Crisis Group

Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge

Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center

Kelley Vlahos: Senior Advisor, Quincy Institute

Panel 1: A New Middle East Security Architecture in the Making (10:30 AM -11:45 AM ET)

The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.

With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence.

 

Panelists:

Sanam Vakil: Deputy Director of MENA Programme at Chatham House

Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University

Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran

Abdulaziz Sagar: Chairman, Gulf Research Center

Andrew Parasiliti: President, Al-Monitor