19.03.2024 Author: Yuriy Zinin

The Saudi-Iranian agreement in Beijing: on the anniversary of its conclusion

The Saudi-Iranian agreement in Beijing

A joint Saudi-Iranian-Chinese trilateral statement was signed in Beijing on 10 March last year. In the statement, Riyadh and Tehran agreed to resume diplomatic relations and open their official missions.

They were suspended in 2016 following attacks on Saudi institutions in Iran during protests against Riyadh’s execution of cleric Nimr al-Nimr on terrorism charges.

The terms of the agreement also included the unblocking of cooperation in various fields, which was signed 20 years ago. The March agreement came as a surprise, with a number of Middle East experts describing it as “historic”. Over the decades, the two states of the region, the largest in terms of territory, hydrocarbon production, world reserves and political weight in the Islamic world, have accumulated strong animosities, many prejudices and antipathies, fuelled from outside.

After the victory of the Islamic Revolution and the overthrow of the Shah in Iran in 1979, the United States promoted the thesis that Tehran posed a military and other threat to its neighbours and American allies. This policy served the purpose of keeping these countries in Washington’s orbit, using their natural wealth and financial resources, and maintaining overseas military bases in the region. The year since the adoption of the Beijing Statement has been marked by efforts to normalise relations between the KSA and the IRI and by moves towards detente. Ambassadors of the two states were exchanged. The Iranian embassy in Riyadh was reopened in June and the KSA embassy in Tehran in August.

Contacts and visits between politicians, diplomats, economists and businessmen of the two countries at various levels began to gain momentum. The first visit of an Iranian official to the KSA, Iranian Finance and Economic Affairs Minister Ehsan Khandozi, took place in May. In November, Iranian President Ebrahim Raisi and Saudi Crown Prince Mohammed bin Salman met on the sidelines of the joint summit of the Organisation of Islamic Cooperation and the League of Arab States in Riyadh. It was the first visit by an Iranian president to the KSA in 11 years.

The de-escalation was also fuelled by the Saudi king’s decision to set up working groups to develop relations with Iran.

We can talk about a certain trajectory of establishing and restoring trade, economic and transport ties. After the Beijing meeting, Iran exported a shipment of steel worth $14 million to the KSA. Some companies in the agricultural and food sectors have resumed cooperation with the Islamic Republic of Iran.

A bilateral agreement was signed to organise flights for Iranian pilgrims to KSA for Hajj and Umrah. According to the agreements, 70,000 pilgrims should be flown to the Kingdom by the end of 2023.

Iranian delegations have been actively participating in international trade events in Saudi cities. The rebuilding of bridges between Saudi Arabia and Iran touches on a number of areas, including sport, and the two countries have agreed that the Asian Football Confederation (AFC) Champions League matches between the two countries’ football teams will be played in Iran and Saudi Arabia. Previously, they were held in third countries.

There are signs that the mutual attacks by both sides’ media and affiliated groups, including on social media, are toning down. According to Saad Bin Omar, head of the Arab Century Research Centre in Riyadh, the Saudi-Iranian deal brings stability to the sides because it is sponsored by a third party, China, which has extensive economic ties with both partners.

The expert drew attention to a project to build a 33-kilometre tunnel in the Strait of Hormuz linking Iran to the Arabian Peninsula, called the “Peace Tunnel”. Its implementation could take three years, cost about $10 billion and include the laying of a railway line.

According to the scholar, the “Peace Tunnel” can play a key role in facilitating mutual access and subsequently lead to the resolution of political problems in the region.

It is clear that the obstacles to implementing the Beijing agreement are great. The differences between the two states touch on sensitivities related to ideological choices, national security and geopolitical issues. For four decades, both countries have been indirectly involved in conflict situations in the Middle East, supporting opposing sides, whether in Syria, Yemen, Lebanon or Iraq, while avoiding direct military confrontation.

At the same time, the rise of economic cooperation between Tehran and Riyadh may bring more dividends and benefits than continued involvement in regional crises to support proxy partners. The bridge-building talks between the two sides in March last year were primarily driven by economic motives. Many observers and experts on the region agree with this thesis.

The Saudi leadership is focused on implementing the ambitious Saudi Vision 2030 socio-economic development programme. It charts a course for diversifying the oil-dependent economy to the frontiers of post-industrial and high-tech development. According to Crown Prince Mohammed bin Salman, the essence of the Saudi idea is economic, and diplomacy should be used to implement it.

Billions of dollars are at stake, and a stable, secure and peaceful environment is needed to guarantee foreign capital. In this context, it is worth recalling the Houthi UAV attacks on KSA oil installations in 2019, which damaged the oil giant Aramco. Riyadh then accused Tehran of providing logistical and intelligence support for the sabotage.

For Tehran, improving relations with Riyadh means partially overcoming the consequences of the political isolation and numerous sanctions that Iran has suffered over the past decades. The withdrawal of the US under President D. Trump in 2018 from the agreement on Iran’s nuclear programme has exacerbated the impact of sanctions, the volume of oil exports has fallen, leading to a deterioration in the economic situation and increasing social hardship for the population.

The March agreement between Riyadh and Tehran reflects the growing willingness of regional actors in recent years to capitalise on the growing presence of “alternative powers” in the region, notably China and Russia, and the consequent weakening of the influence of the US and the West as a whole.


Yuri ZININ – Senior Researcher, Institute for International Studies (IfIS), especially for the online magazine “New Eastern Outlook

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