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The China-mediated Saudi-Iran peace agreement, inked on 10 March in Beijing, marks a significant geopolitical shift with far-reaching implications for the Persian Gulf and Irans neighboring countries. For decades, Saudi Arabia and Iran have been engaged in ideological and economic competition on the territories of their neighbors, causing regional tensions to escalate.

If the agreement is successful and relations between Riyadh and Tehran improve as envisioned, tensions will likely begin to significantly subside in the Persian Gulf, Levant, and further afield in neighboring Pakistan and Afghanistan. The former, long concerned about its security and energy supply vulnerabilities, will potentially benefit from improved relations between Saudi Arabia and Iran, which could help address its oil and gas crises.

Similarly, Afghanistan, whose Taliban-led government is still struggling to gain international recognition and is in dire need of reconstruction and investment initiatives, may also benefit from the kingdoms rapprochement with the Islamic Republic.

Persian Gulf States

An early litmus test for the Saudi-Iranian reconciliation will be its impact on Lebanon, Iraq, Syria, and Yemen, where a perceived proxy war has wreaked havoc on their respective economies and in their public spheres.

One of the most critical areas where the impact of the peace agreement will be tested is Yemen, where Iran and Saudi Arabia have backed opposing sides in the countrys eight-year war. The conflict has resulted in one of the worlds worst humanitarian crises aftera Saudi-UAE-led coalition in 2015 launched military attacks against Yemens pro-Iran Ansarallah movement, which had seized control of the capital, Sanaa.

Irans permanent mission to the UN said in a statement that the Iran-Saudi dealwill accelerate the ceasefire, help start a national dialogue, and form an inclusive national government in Yemen.

Meanwhile, in the Levant, Lebanon is deeply mired in an unprecedented economic crisis, exacerbated by the deterioration of ties between Riyadh and Beirut. This divide has been fueled by the expansion of Iran-backed Lebanese resistance group Hezbollahs power in Lebanon. The World Bank has reported that Lebanons economic crisis is among the worst globally in a century, and the situation continues to deteriorate as quickly as the countrys free-falling lira.

Tensions came to a head in 2017 when then-Prime Minister Saad Hariri, who had previously been Saudi Arabias closest ally in Lebanon, announced his resignation in a televised statement from Riyadh. Lebanese lawmakers charged that he was forced to step down after being detained and roughed up by his Saudi hosts.

The rivalry between Iran and Saudi Arabia has also impacted Iraq, which has suffered greatly since the illegal US-led invasion in 2003. Despite various domestic and foreign initiatives to stabilize matters and reach a consensus on vital issues of governance, the Iraq arena remains volatile, with ongoing violence and political instability.

The crisis in Syria is often viewed as a collection of proxy wars between regional and international powers. The 12-year conflict has been fueled by the involvement of various foreign actors, including the US, UK, Russia, Iran, Turkey, Qatar, France, and Saudi Arabia. These powers have politically and militarily backed different sides in the conflict and in the case of the west, imposed oppressive economic sanctions leading to a complex and ongoing crisis that has caused significant suffering for the Syrian people.

Relief for Pakistan?

Pakistans top policymakers are optimistic about the resumption of work on the Peace Gas Pipeline following the restoration of diplomatic ties between Iran and Saudi Arabia. A source in the Pakistani Foreign Office informs The Cradle that Riyadhs opposition was the main reason the project stalled.

Geopolitical analyst Andrew Korybko goes a step further, predicting that the reconciliation between Tehran and Riyadh will unlock the full potential of a Russia-Iran-India led trade route project the International North-South Transport Corridor (INSTC) by connecting the Gulf Cooperation Council (GCC) to a series of promising Eurasian megaprojects. These projects will run through Pakistan and connect Russia and India by road, making it a significant development for the regions transportation infrastructure.

Authorities in Islamabad also believe that the Saudi-Iran agreement will help reduce the activities of Saudi-sponsored sectarian militant groups, such as Lashkar-e-Jhangvi and Sippa-e-Sahaba (later renamed Ahle Sunnat Wal Jamaat), as well as the Sunni militia Jundallah, based in Irans Sistan and Baluchistan province, which has claimed to have killed hundreds of Iranian security personnel. These organizations have been involved in terrorist activities in Pakistan, particularly targeting the Shia community.According to Korybko:

Inadvertently, the Baloch element of Pakistans security issues may worsen soon. After being cut off by Riyadh and losing their jobs, these militants may join other extremist groups like the Tehrik-e-Taliban Pakistan (TTP) or sub-nationalist groups like the Balochistan Liberation Army (BLA), unless Islamabad detains them or initiates their disarmament, demobilization, and reintegration.

Afghanistan

For years, Riyadh went head-to-head with Iran to shape Afghanistans internal governance and politics and limit Tehrans influence in its bordering state. Following the 1979 Soviet occupation of Afghanistan and the establishment of a communist government under the six-year leadership of Babrak Karmal, the Saudis used Afghan ethnic and religious groups to spread their Salafist, jihadi ideology.

Meanwhile, Iran supported several Shia groups that took over parts of Hazarajat in central Afghanistan near the western periphery of the Hindu Kush range, leading to the formation of Hezb-e Wahdat after Iranian Supreme Leader Ayatollah Ruhollah Khomeinis death in 1989.

The US, Saudi Arabia, and Pakistan formed a Pashtun jihadi fighter or mujahidin resistance force to fight the Soviet troops, with groups such as Gulbuddin Hikmatyars Hizb-i Islami and Abdul Rasul Sayyafs Ittihad-i Islami joining the US-backed war against the communist Afghan government.

Saudi Arabias rivalry with Iran led to the funding of an Islamic complex in Kabul in 2012, with the intention of competing against Irans Khatam al-Nabyeen mosque and Islamic University, built in 2006.

With diplomatic relations set to resume between Iran and Saudi Arabia in two months, it remains to be seen whether Afghanistan will benefit from this detente. While some experts are skeptical that Afghanistan will see any immediate relief from this rivalry, they note that the country is likely to benefit from the progress made in Irans Chabahar Port co-developed with India which is expected to accelerate in the near future.

Nonetheless, the Talibans international and especially regional recognition will likely be a key factor in determining whether Afghanistan can benefit from the resumption of diplomatic ties between Iran and Saudi Arabia.

The Asian Century

On 17 March, Pakistan announced that it facilitated communication between Saudi Arabia and Iran during the Organisation of Islamic Cooperation (OIC) meeting in Islamabad in March last year. During a recent weekly briefing, a Foreign Office spokesperson stated: We applaud this advancement. Together with various other countries and supporters of both Iran and Saudi Arabia, Pakistan encouraged the talks.

Mushahid Hussain Syed, Chairman of Pakistans Senate Defense Standing Committee, tellsThe Cradle that the Iran-Saudi peace deal is a clear setback for the US and Israel, noting that there is little they can now do about the trend of declining US influence in West Asia and the concurrent rise of China in what is now being termed the Asian Century.

The world has rejected the notion of a new cold war, which some hawkish elements in the west are peddling. The time has come when Asian hands must shape the Asian future, a process on which the region has already embarked, emphasizes Syed.

He also adds that for Islamabad, this is excellent news, as China, Saudi Arabia, and Iran are close friends and partners.

China, Syed says, has achieved a major diplomatic victory in midwifing this agreement, which is a major step forward toward peace, stability, and harmony in the Muslim world and could bring proxy wars to an end in the volatile region.

China-led security paradigms

What motivated Beijing to take on the role of mediator in the Iran-Saudi peace talks and engage directly in Persian Gulf security matters?

In recent years, Chinas foreign policy has become more assertive, particularly since Xi Jinping became president in 2012. Analysts believe that Beijings decision to broker peace talks between Iran and Saudi Arabia is in line with its growing involvement in West Asia, which today extends beyond satisfying its energy needs, and includes conflict resolution, regional security, and domestic politics.

Another factor is Chinas substantial investments in its Belt and Road Initiative (BRI) projects across the region, with agreements and understandings signed by twenty Arab states.

Xi Jinpings Global Security Initiative (GSI) and the Middle Eastern security architecture have driven China to become more deeply involved in Persian Gulf politics and address the regions security concerns. At the Communist Partys annual congress in Hong Kong in 2022, President Xi stated that the GSIs security parameters could effectively handle geopolitical conflicts, the food crisis, and the COVID-19 epidemic.

Tuvia Gering, a nonresident fellow at the Atlantic Councils Global China Hub, explains to The Cradle that as China strives towards national rejuvenation and grows its vested interests in the Global South, top Chinese experts are debating whether to increase their involvement in political and security issues in West Asia and North Africa.

Yang Cheng, a former diplomat and expert on Sino-Russian relations, thinks that China might eventually be able to work with [West Asian] countries on security issues and may become a major provider of security-related public goods, Gering says, adding that the majority of Chinas intelligentsia is in favor of getting more involved in regional issues.

The normalization of relations between Iran and Saudi Arabia clearly has the potential to greatly impact West Asia and the wider region as a whole. By reducing political and sectarian rivalry, the deal could effectively neuter the tendency toward proxy wars and the spread of extremist ideologies.

Importantly, the rapid advancement of economic cooperation between the two countries and their regional neighbors could provide an excellent testing ground for Xis grand vision of replacing western-sponsored endless war with his peaceful modernization alternative for the Global South. While it is still too early to determine the extent of the deals impact, it is clear that this Iran-Saudi rapprochement is a positive step towards stability in West Asia.

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The Iran-Saudi deal: A bid to end endless war - The Cradle