Officials from Iran and Saudi Arabia on 10 March signed an agreement to re-establish formal diplomatic relations within the next two months, restoring formal ties severed in 2016.

  • The breakthrough follows nearly two years of tentative talks and will ease the ability of both states – which will remain rivals – to deconflict on geopolitical and security issues.
  • The deal was brokered by China and underscores Beijing’s willingness to leverage its close economic ties to both states to facilitate – and advertise – its diplomacy separate from US influence.
  • While the restoration of formal relations is likely to facilitate follow-on accords, such as a peace deal in Yemen, it is highly unlikely to lead to a broader and stable reduction in the geopolitical and security rivalry between the two.
  • Similarly, the agreement is highly unlikely to lead to the US significantly altering its containment posture toward Iran, but is likely to mitigate regional threats from US-Iran tensions.

Restoring relations

According to a trilateral Iran-Saudi Arabia-China statement, Iran and Saudi Arabia will re-open their embassies and consulates within two months and restore diplomatic relations. They affirmed mutual respect for each other’s state sovereignty and commitment to avoid interference in the internal affairs of other states.

The two sides also agreed to resurrect dormant bilateral agreements on security cooperation, economic development, trade, investment, technology, science, culture and sports that were suspended with the curtailment of diplomatic relations in 2016. The respective foreign ministers will meet over the coming weeks to discuss implementation and “means of enhancing bilateral relations”. The agreement did not, however, include a public roadmap for specific policy outcomes beyond reopening embassies.

Further bilateral implementation meetings will follow. In the days following the agreement, Iran has reportedly agreed to halt arms shipments to the rebel Houthi group in Yemen, while making overtures to Egypt and Bahrain to normalize relations. Saudi Arabia reportedly agreed to soften critical news coverage about the Islamic Republic. Iranian media has reported that Saudi Arabia's King Salman bin Abdulaziz had invited Iranian president President Ibrahim Raisi to Riyadh.

Saudi Arabia broke off diplomatic relations with Iran in January 2016 after the kingdom’s Tehran embassy was stormed and set alight by protesters following the execution by Saudi Arabia of 47 Shia activists and other figures, including a prominent Saudi Shia cleric. Security tensions subsequently escalated, with attacks by Iran and its affiliated paramilitary groups in Iraq and Yemen targeting Saudi Arabia’s civil and energy infrastructure. The two have funded and armed opposing sides in Syria’s civil war and remain effectively on opposing sides of the ongoing war in Yemen.

China’s influence

The deal followed trilateral discussions in Beijing on 6-10 March, but was likely the fruit of nearly two years of talks between Iranian and Saudi security officials, mainly hosted by Iraq and Oman.

The deal is China’s most significant diplomatic engagement in the Middle East and is of a kind that the US would not have been able to broker. The US has not had formal diplomatic relations with Iran since 1980. Both Riyadh and Tehran have strong economic ties to Beijing, and with them incentives to play up China’s role in bringing them together. However, Riyadh and Tehran were likely already willing to re-establish relations before China’s involvement. Beijing’s role was officially described as “hosting and sponsoring talks” between the two sides – making the agreement an easy public relations win for Beijing – but there is not yet any sign that China will act as a guarantor or referee of relations.

As such, the deal demonstrates the room available to other external powers to operate as Riyadh seeks to consolidate an independent multi-polar foreign policy strategy. However, it marks an incremental change: the US will remain the region’s primary security guarantor, while China’s appetite and capacity for regional diplomacy will remain limited.


The restoration of formal bilateral relations will allow Tehran and Riyadh to coordinate directly on de-escalation initiatives. In particular, the move significantly increases the likelihood of a formal peace agreement between warring factions in Yemen, and with it a reduction in cross-border attack threats to the kingdom from Yemen’s Iran-backed rebel Houthi group. Greater engagement between Riyadh and Tehran is also likely to have ameliorating political impacts across the region, for example in resolving the stalemate in Lebanon over the appointment of a new president, restoring formal Iran-Bahrain and Iran-Egypt relations and managing a gradual diplomatic reintegration of Syria.

However, the agreement is likely to disrupt nascent Saudi-Israel talks to normalise relations, which the US has reportedly concertedly encouraged. That US effort has reportedly already hit snags as Riyadh has demanded blanket US security and civilian nuclear development guarantees in return for normalisation, while condemning recent Israeli security operations in the Palestinian Territories. Israel advocates unilateral military action against Iran if it pursues further nuclear enrichment and has sought to consolidate a regional security coalition, including Saudi Arabia, to confront Iran’s nuclear programme and regional threat posture. The deal therefore moderately reduces the credibility of Israel’s unilateral strike threat against Iran.

For Saudi Arabia, restored relations will likely make it easier to limit the kingdom’s security exposure in the event of a material escalation of tensions with Israel, the US and other Western states in the coming months over Iran’s runaway nuclear enrichment, support for Russia’s military campaign in Ukraine and domestic repression. However, the agreement is unlikely to mark the start of a broad reduction in bilateral geopolitical and security rivalry, given longstanding enmity and mistrust between the countries that ran deep even when bilateral relations were open. The threat of Iran-derived attacks in the region will be reduced, but not removed, in the coming months.

The US is likely to be disquieted by the agreement, including by the prospect that Riyadh and other Gulf Arab states are signalling a steadfast refusal to come onside regarding the Russia-Ukraine conflict. There is also a low – but not negligible – prospect that, having compartmentalised its tensions with Saudi Arabia, Iran will be encouraged to double down on an escalatory nuclear enrichment strategy and confrontation with Israel and the US.

However, ultimately the agreement is more complementary – rather than counter – to US interests in the region, and a US-Saudi rift over the issue is unlikely. As the US looks to confront Iran over its uncontrolled nuclear enrichment and build momentum for the snapback of UN sanctions against Iran in October driven by Iran’s military supplies to Russia, it will benefit from Saudi-Iran deconfliction capacities to mitigate the fallout among US regional partners.

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