Wang Yi, China’s director of foreign affairs, with Saudi Arabia’s minister of state Musaad bin Mohammed Al-Aiban and Admiral Ali Shamkhani, secretary of the Supreme National Security Council of Iran last Friday (Alamy/ Xinhua)

Believe it or not, the most important news story last Friday may not have been the BBC’s decision to cave in to a far right leaning Tory government and suspend Gary Lineker. In the longer run it’s probably more important that it’s the same day China announced it had brokered an agreement between Iran and Saudi Arabia to restore diplomatic relations.

There are two important elements to this deal. The first is that it’s between Iran and Saudi Arabia. Since the United States was defeated in Iraq—which it invaded 20 years ago next weekend—there has been a struggle among local sub-imperialisms to fill the resulting vacuum. The most important of these powers are Iran, Saudi Arabia, and Turkey, with Israel playing a role. But the main antagonism has been between the Islamic Republican regime in Iran and the Saudi royal family. 

They have been fighting proxy wars in Syria and Yemen. Shared fear of Iran allowed Israel to draw closer to the Gulf sheikhdoms, with the strong encouragement of Donald Trump. This led notably to the Abraham Accords of September 2020, under which both the United Arab Emirates and Bahrain recognised Israel.

Karim Sadjadpour of the Carnegie Endowment think tank provides this crisp explanation of why these two rivals are now willing to normalise their relations. “What’s in it for Tehran? Iran is deeply isolated, humiliated by months of protests, and heavily reliant on China strategically/economically. This deal lessens its isolation, gains legitimacy for the regime, and strengthens China’s regional influence at the expense of the US.

“What’s in it for Riyadh? The 2019 attack on Saudi Aramco taught Riyadh the US can’t protect them from Iran. Given China’s enormous leverage over Iran and its interest in regional stability, Riyadh likely hopes this deal provides them a Chinese shield against Iranian aggression.” But then we come to the second striking element—it was China that brokered the agreement. Wang Yi, the top Chinese diplomat who chaired the Iran-Saudi talks, pointedly said, “The world is not just limited to the Ukraine issue.”

According to the Washington Post newspaper, “Though some in Washington expressed alarm at Beijing’s involvement in the deal, it’s unclear if the Biden administration would have been able to broker it even if it wanted to. Tehran and Washington are barely on speaking terms following the Trump administration’s decisions to pull out of the Iran nuclear deal and assassinate the country’s top military commander, Qasem Solemaini.”

From the time of the Iranian Revolution of 1978-9 onwards, the US has repeatedly used its military power to maintain its dominance of the Gulf. That’s fundamentally because of the importance of the region’s oil exports. But US dependence on Gulf oil has fallen dramatically in the past two decades. 

This is thanks to the shale revolution that has made the US self-sufficient in energy production. It’s now a major rival of Saudi Arabia, Russia, and Iran in global energy markets. Meanwhile, China has become the biggest importer of Gulf oil, and the leading exporter of manufacturing goods, to the region as elsewhere. It is now Saudi Arabia’s main trading partner. 

Relations between the US and the Gulf states have also been deteriorating. To quote the Washington Post again, “America’s Arab allies in Saudi Arabia and the broader Persian Gulf often lament the criticisms they receive from Washington over human rights abuses and a lack of political freedoms and elections—complaints they do not receive from Beijing.”

China’s president Xi Jinping visited Saudi Arabia in December and last month signed a strategic cooperation agreement with his Iranian counterpart, Ebrahim Raisi. Saudi Arabia refused to follow the US in isolating Russia in response to the invasion of Ukraine. The US retains a massive military presence in the wider Middle East. Central Command has 40-60,000 troops and nearly 30 major bases in the region. Nevertheless, as Kristin Smith Diwan of the Arab Gulf States Institute says, “China has truly arrived as a strategic actor in the Gulf.”

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