Saudi-Iran Rapprochement Signals Shifting Regional Power Dynamics in the Middle East
The gradual withdrawal of the Saudi-led coalition from Yemen and a diplomatic rapprochement between Saudi Arabia and Iran suggest a major geopolitical realignment in the Middle East, challenging US influence. This new alignment signals a regional shift towards greater independence, with Riyadh and Tehran turning their focus toward shared challenges and away from antagonistic competition.
Beginning in 2019, the gradual withdrawal of the Saudi-led coalition from its military engagement in Yemen has largely been interpreted as the conclusion to a devastating conflict. However, beneath the surface lies a far more complex geopolitical realignment in the Middle East; a rapprochement between Riyadh and Tehran, and the renewal of Pan-Arabism, poses a significant challenge to the established order, including the influence of the United States in the Middle East.
The Yemeni civil war has repeatedly been referred to as one of the greatest fronts of conflict through which Iran and Saudi Arabia have tried to consolidate their regional power. Iran has been implicated from the beginning, with regional experts alleging financial and organisational support to Houthi insurgents from as early as 2009. In 2015, Saudi Arabia intervened to support the internationally recognised government after Houthi rebels, likely financed and armed by Iran, took control of significant portions of the country. This was a decision viewed as imperative by Riyadh as part of a broader strategy to curtail Tehran’s authority from extending beyond Lebanon and Syria.
The Saudis viewed the Houthi insurgency as an extension of Iranian ambitions to establish a Shiite crescent, threatening the Sunni Arab monarchies in the Gulf. For Iran, the Houthis provided a clear opportunity to challenge Saudi dominance in the Arabian Peninsula and extend the reach of Tehran’s influence beyond the confines of the Levant. By bolstering the Houthis, Iran could exert indirect pressure on Saudi Arabia and keep its rival embroiled in an expensive and unpopular war. Yemen became a theatre for two great Middle Eastern actors unwilling to commit to direct confrontation, but eager to bleed the other dry through proxies.
However, the almost total withdrawal of the Saudi-led coalition from Yemen between 2019 and 2021, and the diplomatic détente between Saudi Arabia and Iran, brokered by China last year, has dramatically shifted the regional balance. Saudi Arabia has long been central to the US presence in the Middle East, and its rivalry with Iran has defined much of the region’s politics. However, recent diplomatic normalisation between Riyadh and Tehran suggests that both powers are beginning to recognise the limits of their antagonistic relationship. They now appear to be exploring alternative futures based on cooperation rather than conflict.
Having stepped back from Yemen, and engaged productively in brokering peace with Iran, Saudi Arabia is signalling that it no longer views Tehran as a direct threat to its southern borders. Moreover, Iran’s reduced support for the Houthis indicates that Tehran is willing to moderate its aggressive posture in exchange for greater regional stability.
The significance of China’s role as a mediator in the Saudi-Iranian détente cannot be understated. A significant economic and political partnership is emerging between Riyadh and Beijing, evidenced by their shared willingness to use the yuan for oil transactions, the high level of policy and infrastructure coordination across China’s Belt and Road Initiative, Saudi Arabia’s 2030 Vision, and Beijing’s central role in easing hostility between Tehran and Riyadh. The growing influence of an external power, such as China moreover, illustrates Saudi Arabia’s willingness to diversify its alliances and reduce its dependency on Washington. While Saudi Arabia’s increasing alignment with Beijing’s regional ambition cannot alone be said to eliminate US influence, it does signal a rebalancing of Saudi Arabia’s foreign policy in favour of a more multipolar approach.
Important to this claim is the fact that Saudi Arabia has spent much of the last three years signalling its intention to prioritise its own economic interests over Washington’s. This has not necessarily been a given in the past, where traditionally a level of economic sovereignty in the dictating of oil prices has been sacrificed by Riyadh in exchange for a level of security assurance from the US. However, Saudi Arabia’s recent decision to decrease oil production, in response to predictions that global crude oil demand may peak in the next decade, indicates a prioritisation of their own financial interests. This should raise significant concerns among US policymakers. Despite their energy independence, the US remains vulnerable to international market dynamics; a reduction in Saudi output will cost American consumers, despite the US being a net exporter since 2020.
This is primarily due to the fact that US refineries still import Saudi crude oil to fulfil the country’s domestic consumption needs. Refineries pass this cost on to independent and commercial consumers, increasing inflationary pressures on the cost of living for individuals, and also the cost of domestic production processes for American businesses. In prioritising their own financial interests, Saudi Arabia are deprioritising the shared interests on which their relationship with the US was previously balanced. If the US cannot secure a steady supply of Saudi oil, or rely on Riyadh to manage prices favourably, the value proposition of the trade on which their relationship has been balanced will be severely impacted. Thus, the US must reassess the value of its longstanding alliance with Saudi Arabia, especially as the strategic implications of oil production decisions become increasingly pronounced in a shifting global landscape.
Enhanced cooperation between Saudi Arabia and Iran will likely reduce the influence of the US in frameworks of regional stability going forward. Here, intensifying Saudi rhetoric toward Israel reflects an evolving movement away from Western sources of security. In a recent statement, Minister of Foreign Affairs Faisal bin Farhan made it clear that Saudi Arabia will “tirelessly work towards establishing an independent Palestinian state with East Jerusalem as its capital.” Faisal has also announced that Saudi Arabia will not engage Israel diplomatically without an independent Palestinian state, despite the US privately advising Riyadh to normalise relations with Israel. If Saudi Arabia continues to leverage its influence to promote Palestinian statehood, it may alter the regional dynamics in such a way that Israel feels pressured to make concessions more closely aligned to an Arab image of the region, undermining US diplomatic initiatives to broker stability. This development will complicate the US’s ability to navigate simultaneous relationships with Israel and Saudi Arabia, and further reduce its ability to realise strategic interests in the region.
In sum, the evolving Middle Eastern landscape reflects a strategic reorientation driven by Saudi Arabia’s recalibration of its alliances and priorities, indicating a profound shift in regional power dynamics. The rapprochement between Riyadh and Tehran demonstrates that Middle Eastern actors are increasingly keen on forging paths independent of US influence, potentially ushering in an era of more autonomous and multipolar diplomacy in the region. For the US, this shift challenges its longstanding role as the region’s primary security guarantor and complicates its balancing act between commitments to Israel, energy interests, and its influence over Arab states. As Saudi Arabia and Iran explore common ground, the region may see a renewed focus on cooperative Arab unity reminiscent of Pan-Arab ideals, potentially altering US influence and reshaping the dynamics of Middle Eastern politics.
Thomas McMullan studies Politics & International Relations and Political Economy at the University of Sydney. His academic focuses are the social and economic theories of capitalism, trade and development, conflict and security, with a particular emphasis on how these factors influence international relations.
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