Arch-rivals Iran and Saudi Arabia agree to revive ties, reopen embassies in China-brokered deal

DUBAI, United Arab Emirates — Long-time regional foes Iran and Saudi Arabia agreed to resume diplomatic relations and reopen embassies in each other’s countries following China-led negotiations in Beijing, both governments announced via their respective state media agencies.

“As a result of the talks, Iran and Saudi Arabia agreed to resume diplomatic relations and re-open embassies … within two months,” Iran’s news agency IRNA reported Friday.

Saudi Arabia’s state Saudi Press Agency confirmed the announcement in its own statement.

The Saudi statement profusely thanked Beijing for its leadership in the talks.

“In response to the noble initiative of His Excellency President Xi Jinping, President of the People’s Republic of China, of China’s support for developing good neighborly relations between the Kingdom of Saudi Arabia and the Islamic Republic of Iran… The delegations from the two countries held talks during the period 6-10 March 2023 in Beijing,” the SPA statement said.

It emphasized the Chinese leader’s role in hosting and sponsoring talks between the Saudi Kingdom and Iran, a process that Riyadh described as “proceeding from their shared desire to resolve the disagreements between them through dialogue and diplomacy, and in light of their brotherly ties.”

Iranian state media published images of Iran’s Supreme National Security Council Secretary Ali Shamkhani with Saudi national security adviser Musaad bin Mohammed al-Aiban and top Chinese diplomat Wang Yi.

In addition to resuming diplomatic relations and reopening their embassies and missions in each other’s countries, Iran and Saudi Arabia agreed to affirm “the respect for the sovereignty of states and the non-interference in internal affairs of states.”

They also agreed that the foreign ministers of both countries would meet to implement this and improve bilateral relations, and that previous cooperation accords — namely a “Security Cooperation Agreement” from 2001 and a “General Agreement for Cooperation” from 1998 covering the fields of trade, economy, sports, technology, science, culture, sports and youth — would be revived.

“The three countries expressed their keenness to exert all efforts towards enhancing regional and international peace and security,” the Saudi statement said.

Iran’s IRNA quoted Shamkhani calling the talks in Beijing “clear, transparent, comprehensive and constructive.”

The Saudi statement also expressed thanks to Riyadh’s neighbors Iraq and Oman, which it said had hosted “rounds of dialogue that took place between both sides during the years 2021-2022.”

Oman’s foreign ministry welcomed the Friday development on Twitter, expressing hope that it will “contribute to strengthening the pillars of security and stability in the region and consolidating positive and constructive cooperation that benefits all peoples of the region and the world,” according to a Google translation.

Iran and Saudi Arabia have long accused each other of destabilizing the region and regarded one another as grave security threats, often on opposite sides of regional conflicts such as those in Yemen, Lebanon and Syria. Riyadh and Washington both accuse Tehran of being behind several attacks on Saudi ships, territory and energy infrastructure in the past few years.

Saudi Arabia cut diplomatic ties with Iran in 2016, after Iranian protesters stormed the Saudi embassy in Tehran in response to Saudi authorities executing 47 dissidents, including a leading Shia cleric.

The Saudis kept Washington informed of the deal, National Security Council spokesman John Kirby told CNBC during a press call.

“We support any effort to de-escalate tensions in the region. We think it’s in our interests and it’s something that we worked on through our own effective combination of deterrence and diplomacy,” Kirby said, adding that “it really does remain to be seen if Iran is going to meet their obligations.”

The U.S. position is to see the war in Yemen end, he said, which is something that may be more likely to happen in light of Friday’s agreement.

He meanwhile appeared to downplay China’s role in the deal. “This is not about China and I’m not going to characterize here whatever China’s role is,” Kirby said, adding that “it appears to us that this roadmap announced today was the result of multiple rounds of talks.”

The breakthrough is good news for the region, said Anna Jacobs, senior Gulf analyst at the International Crisis Group.

“It’s hugely positive news,” she said, which signals that there has been enough dialogue “to start some serious confidence building measures and agree to this roadmap to restore full diplomatic relations. The news also suggests we are likely to some positive movement on the Yemen ceasefire.”

The development “shows that Saudi-Iran dialogue has succeeded after many years, and it’s succeeded with support from regional powers like Iraq and Oman, but also global powers like China,” Jacobs told CNBC.

The agreement also illustrates that China has stepped up its role in the region in new ways, particularly in mediation, Jacobs added. “For China, this is a huge win.”

Michael Stephens, an associate fellow at London’s Royal United Services Institute, agreed.

“This is a serious moment in which the region itself and the two biggest powers in the region acknowledged the influence, the diplomatic presence, and the leverage of Beijing as their key arbiter in the region,” he said, noting that this is the first such instance for China as a mediator in the Middle East.

“Now, that doesn’t mean that the U.S. is losing influence,” he said, pointing to the fact that the U.S. still has a far bigger military footprint than China in the region and its relationship with Israel is much stronger than Beijing’s.

“That is all understood, and nobody is challenging the power of the U.S. and what it could do,” he said. “What they are challenging is the notion that the U.S. is leading. And that it’s the only game in town.”

— CNBC’s Amanda Macias contributed to this report.