The revival of diplomatic ties between the two long-standing rivals Iran and Saudi Arabia, in a deal brokered by China, has far-reaching implications for global geopolitics in general and the West Asian region in particular. The rapprochement, which came after years of proxy conflicts that the two major Islamic countries are engaged in, reflects a diplomatic coup by China and demonstrates how it has successfully translated its economic influence into diplomatic heft. The agreement, announced in Beijing, is also a sign of shifting power dynamics in the region with the steady decline in the US clout. A more aggressive and assertive China has been flexing its muscles and expanding its area of influence in the oil-rich Persian Gulf. It has leveraged its ties with Iran, which has been battling American sanctions and deteriorating ties with Europe over its military support to Russia, and played a decisive role in hammering out the historic agreement. For India, the development provides a reality check on Beijing’s growing role in shaping global events. However, New Delhi stands to gain in the bargain. Iran and Saudi Arabia are two major oil producers in the world, and any conflict between them can lead to oil price spikes that can have a significant impact on India’s energy security. Normalising ties between them could help stabilise global oil prices and ensure a consistent supply of oil to India. Moreover, both the Islamic powers are important trading partners for India which has strong economic and strategic interests in the Middle East including the International North-South Transport Corridor.
While being vigilant about the increasing Chinese influence in the region and working towards securing its strategic interests in the Middle East, India can play a constructive role in promoting dialogue and cooperation between Iran and Saudi, which can help in achieving regional stability. As per the Beijing-brokered deal, Iran and Saudi Arabia would reopen their respective embassies in Tehran and Riyadh, respect each other’s sovereignty and also activate a 2001 security cooperation agreement, as well as a general economy, trade and investment agreement signed in 1998. The agreement may have implications for a US-led effort to isolate Iran economically through sanctions. Saudi Arabia broke off ties with Iran in 2016 after protesters invaded Saudi diplomatic posts in the wake of Riyadh executing a prominent Shiite cleric. Saudi Arabia has long portrayed itself as the world’s leading Sunni nation while Iran views itself as the protector of Islam’s Shiite minority. Both countries are engaged in a plethora of proxy wars in Yemen, Syria and Bahrain. The first and most critical test of the agreement will be played out in Yemen, where a Saudi-led coalition has been fighting the Iran-backed Houthi rebels since 2015. Riyadh is keen on ending the conflict which has claimed thousands of lives.