May 5, 2022

IntelBrief: Dialogue Between Iran and Saudi Arabia Advances

Iran and Saudi Arabia flags

Bottom Line up Front

  • Saudi Arabia’s dialogue with Iran reflects the Kingdom’s uncertainty about the U.S. role in ensuring the security of the Persian Gulf.
  • Talks between the two traditional adversaries have made progress on relatively manageable issues, including the upcoming Hajj pilgrimage.
  • U.S. officials are hoping that the talks could advance a political solution to the brutal conflict in Yemen.
  • The Saudi-Iran talks could help break a stalemate in multilateral negotiations to restore the 2015 Iran nuclear agreement.

In late April, Iran revealed that it held a fifth round of talks with Saudi Arabia in Baghdad, Iraq, the site of most of the previous rounds of meetings in 2021. Iranian media reported that the latest talks were attended by "senior officials from the secretariat of Iran's Supreme National Security Council and the head of the Saudi intelligence service," and Foreign Ministry spokesperson Saeed Khatibzadeh stated that the latest discussions were “positive and serious and saw progress.” Iranian media added that the foreign ministers of the two countries are expected to meet in the near future—a potentially significant elevation of the talks. To prepare for that high-level meeting, officials from the two countries are anticipate meeting in Oman, which has closer relations with Iran than does any of the other Gulf states. Some minor agreements reportedly were reached in Baghdad; for example, Iran will send 40,000 Iranian pilgrims to the Hajj in the Saudi city of Mecca later this year. In some previous years, Saudi authorities have cracked down on Iranian pilgrims who used the religious occasion to demonstrate against Saudi policies.

Yet, difficult bargaining is ahead for the two countries, which each represent two major Islamic sects: Saudi Arabia, as a Sunni Muslim power, and Iran as pre-eminent among Shias. Tehran is pressing to re-establish diplomatic relations, which Saudi Arabia cut off in January 2016 after Iranian protesters stormed Saudi diplomatic facilities in Tehran over Riyadh’s execution of dissident Shia cleric Nimr al-Nimr. Indicating the sensitivity that Tehran attaches to Saudi treatment of the Shia community, the fifth round, set to convene in March, was postponed by Iran after Saudi Arabia’s execution of Shia dissidents. The Kingdom appears to want to wrest substantial concessions from Tehran on regional issues, and it has agreed to allow Iran to reopen its embassy in Riyadh, but only for activities related to the Jeddah-based Organization for Islamic Cooperation (OIC).

Saudi officials are seeking consessions on the Yemen conflict. Since 2015, the Kingdom and its key Gulf ally, the United Arab Emirates (UAE), have been helping the government of Yemen battle the Iran-backed Houthi movement that took over much of northern and central Yemen in 2014. Iran has supplied the Houthis with missile technology that the group uses frequently against Saudi targets; in January, they fired on targets near Abu Dhabi International Airport. Both Gulf states have bemoaned the lack of U.S. retaliation against Iran for missile attacks on their territories by Tehran and Tehran’s proxies, including the September 2019 Iranian strike that knocked out almost half of Saudi oil production for several weeks. The United States has, however, provided both countries with advanced missile defense systems, including the system that intercepted the Houthi missile attacks on the UAE.

International diplomats hope that the Saudi-Iran talks produce, at the very least, an extension of the two-month ceasefire in Yemen that began in early April, and perhaps ultimately a political solution. Prior to the April round of talks with Iran, Saudi Arabia signaled its potential willingness to end its involvement in the long conflict by engineering a restructuring of the Yemen government. Iran is widely known to be frustrated with recent setbacks suffered by Houthi forces in the central province of Marib at the hands of UAE-backed Yemeni militia forces. However, it is not clear that the Saudi-Iran dialogue has meaningfully narrowed their differences. At the talks in Baghdad, Saudi officials reportedly expressed disappointment with Iran’s role in Yemen and accused Tehran of failing to facilitate a ceasefire extension. Iran has publicly expressed support for the ceasefire, but Iran’s representatives in Baghdad stressed that Saudi Arabia needs to take practical steps to move toward sustainable peace—a formulation taken to mean a reduction of Saudi and UAE support for the Yemen government ground forces and a curtailment of Saudi and UAE airstrikes there.

The Saudi-Iran dialogue takes place in the context of ongoing talks between Iran and the United States and other global powers to restore full compliance with the 2015 multilateral Iran nuclear agreement. Saudi Arabia and its Gulf allies—as well as U.S. critics of the deal—have long questioned that pact’s narrow focus on Iran’s nuclear program and absence of restrictions on Iran’s support for regional armed groups, including the Houthis, Lebanese Hezbollah, and Iraqi Shia militia forces. Saudi officials cite the Iran nuclear deal as evidence for their assertion that the United States intends to reduce its role in Gulf security and rely on Gulf states to defend themselves against Iran’s growing strategic power. The multilateral talks have been stalled for months over Iran’s insistence that the United States revoke the 2019 U.S. designation of Iran’s Islamic Revolutionary Guard Corps (IRGC) as a foreign terrorist organization (FTO)—a designation the Trump administration imposed because of the role of the IRGC’s Qods Force in supporting regional armed groups. A Saudi-Iranian diplomatic breakthrough that ends the Yemen war might meet a U.S. requirement that Iran “de-escalate” in the region in exchange for the lifting of the IRGC terrorism designation. U.S. officials are searching for a formula that can finalize a nuclear agreement and, in so doing, ushers more Iranian oil into global markets, particularly as Russian supplies face more restrictions, and brings Iran’s expanding nuclear program back under firm international scrutiny and control.