The Geopolitical Risks of the US-Iran Crisis: a Saudi standpoint

Anastasia is a third-year International Relations student at King’s College London. With a special interest in the Middle East-North Africa (MENA) region, she uses this article to examine the implications of recent US-Iranian confrontation for another regional power – Saudi Arabia. 

With the new year barely begun, United States (US) forces have assassinated Qasem Soleimani , commander of the Iranian Quds Force, signaling an escalation of longstanding tensions between the two powers. US unilateral withdrawal from the 2015 Iran Nuclear Deal – brokered by President Obama – as well as Washington’s blacklisting of Iran’s Islamic Revolutionary Guards Corps, has left the US-Iranian relationship at an all-time low[1]. Recent events, including Iran’s retaliatory strike on US-occupied bases in Iraq, have set in motion a process of frantic diplomacy among neighbouring Middle Eastern states. With the situation seemingly de-escalated, and the US proceeding to impose additional sanctions on Iran, there are still notable concerns for parties beyond those directly involved[2]. Now that attention has been diverted from the possibility of an outright US-Iranian war, the aggravation of regional tensions is expected to manifest itself in more subtle, indirect means of subversion and conflict. This article will analyse the potential consequences of the crisis triggered by the US strike on Soleimani for Iran’s prominent regional rival: Saudi Arabia. Through looking at its complex relations with Iran, stemming from historical enmity and deep sectarian divisions, potential risks to Saudi Arabia will be analysed in the wake of the first geopolitical crisis of 2020.

 

Iran and Saudi Arabia’s relationship has been characterised by fierce competition. This can be traced back to at least the events of the Iranian Revolution of 1979 and the subsequent Iran-Iraq war between 1980-1988, which reinforced Saudi’s concerns regarding Iranian regional ambitions[3]. There are two principle reasons for such hostility. Firstly, Iran and Saudi Arabia are involved in a state of direct competition for regional resources and hegemony, in which both attempt to reduce their rival’s respective sphere of influence through proxy conflicts and subversive techniques[4]. Further intensifying this rivalry is the deep sectarian divide between Shia Iran and Sunni Saudi Arabia, along with their fundamentally differing political systems and foreign policy alignments[5]. In recent years, the relationship between the two key regional actors has deteriorated into what some describe as a ‘Cold War-style stand-off’ – at risk of boiling over[6]. Tensions escalated in 2019 when Saudi Aramco – the kingdom’s primary oil company – facilities fell victim to drone and missile strikes. Evidence produced by United Nations (UN) investigators dismissed the possibility of the missiles originating from Houthi-occupied areas in Yemen, and bolstered arguments proposed by the US and Saudi Arabia that Iran was responsible[7]. The recent developments have seen Saudi Arabia increasingly relying upon, and encouraging, the US to engage in hardline policies against Iran in order to ‘isolate and cripple’ the state[8]. This strategy, however, appears to be a double-edged sword. Unable to consistently rely upon the Trump Administration to act in the name of interests other than its own, the escalatory sequence of events in the first week of January have highlighted the vulnerability of Saudi Arabia.

 

Considering the history of Iran-Saudi relations, Saudi Arabia’s response to the assassination of General Qasem Soleimani may appear contradictory. Saudi officials are likely to have privately celebrated the death of a military leader seen as synonymous with the Iranian pursuit of regional hegemony and the dangers posed by the Shia Crescent[9]. Despite this, its public response has been extremely cautious and muted. In the aftermath of the US strike, Saudi deputy defence minister, Prince Khalid bin Salman, engaged in multiple meetings with representatives of both the US and the United Kingdom (UK) in the pursuit of a de-escalation of the situation. Acutely aware of its own susceptibility to attack as a US ally, Saudi interests were clearly in the realm of conflict prevention. In order to detract attention from the presence of US military forces on its territory, Saudi newspapers argued that the US drones which took out Soleimani originated from a military base in Qatar, with whom Saudi Arabia has been engaged in an intense dispute regarding the former’s alleged easing of relations with Iran[10]. The attempt to calm the crisis appears to be in line with a clear trend in Riyadh’s foreign policy over the past year or so. Saudi Arabia has been slowly, but surely, trying to reduce its involvement in proxy conflicts against Iran and foster an attractive and unaggressive international image. It is here where General Soleimani’s death gains new relevance. Reports have emerged of Saudi Arabia having been in the process of engaging in dialogue with Iran for the purpose of easing tensions. Moreover, Iraqi Prime Minister Abdul Abdul-Mahdi stated that Soleimani had been passing messages between Iran and Saudi on the day of his killing in Baghdad[11]. Although this was disrupted by US Secretary of State Mike Pompeo, this revelation (as well as the US strike itself) brings with it uncomfortable possibilities for the future of Saudi-Iranian relations.

 

So, what is to be expected after the recent US-Iran crisis? In sum, the uncertainty generated by recent events is likely to pose a threat to the diversification of the Saudi oil-dependent economy. Whilst oil prices jumped 1.4% to $69.21 in the aftermath of the Iranian retaliation to the US strike, it would be a stretch to claim that this is sufficient to pose a considerable threat to Saudi interests[12]. What is cause for concern, however, is the attitude of investors in the non-oil economy. Saudi Aramco shares dropped close to their lowest point since they first debuted on the Riyadh market on December 11th, 2019.  Although this is only a temporary disruption in all likelihood, the drop in share prices may reflect growing anxiety among private investors. With most Aramco shareholders being either Saudi investors or fellow Gulf state members, the trend of increasing regional instability is likely to affect the risk calculus of their investments. This poses a problem for Saudi ambitions. The listing of a small percentage of Aramco on the Riyadh stock exchange was part of Crown Prince Mohammad bin Salman’s Vision 2030; a grand plan to move their economy past its reliance on oil and the unpredictability this entails in today’s political and environmental circumstances[13]. With a slump in Aramco’s stock, this holds potential for plans to be disrupted and for investment into the non-oil economy to be curtailed.

 

Threats to Saudi interests are not one-dimensional. A key concern for the Sunni-dominant state is retaliation for its close ties to the US by Shi’ite militia factions operating both internally and in neighbouring states such as Bahrain. In response to the strike against Soleimani, the Hizbullah Al-Hijaz Brigades produced a statement calling for the removal of US influence and troops from the region and the ousting of the current Saudi regime[14]. Although unlikely to pose a significant existential threat to Saudi Arabia’s political system, the escalation in regional tensions may spur an intensification of violence on the part of Iranian-allied militias. Saudi Arabia has already been a victim of multiple terror attacks (from not only Iran-affiliated groups, but also Al Qaeda and Islamic State, or ‘IS’), and it is possible that such groups may exploit the recent instability.

 

Finally, the US-Iran crisis will affect the trajectory of future relations between Tehran and Riyadh. Reports suggest that on the day of his assassination, General Soleimani was in Baghdad passing messages between Iran and Saudi Arabia as part of dialogue aimed at inducing a detente in hostilities.  Having had its resources and territory threatened by Iran, and unable to count on decisive US military support, Saudi Arabia may well conclude that it is in its best interests to attempt to manage the divides which have brought so much destruction and uncertainty to the region.  This, however, is partially dependent upon Iran’s willingness to engage in dialogue. It is likely that the killing of Soleimani has hindered any productive exchange between Saudi and Iran. Whilst Iran understands that a direct strike on US assets or personnel is likely to bring painful retribution, it is also aware of the unpredictability of US response when its interests are secondary. Trump’s inflammatory announcement of the imposition of new sanctions upon Iran does not bode well for the possibility of long-term de-escalation and may trigger a reactionary move from Iran, which is likely to be aimed at US allies.

 

To conclude, the assassination of Iran’s celebrated military commander has put Saudi Arabia in a very difficult position. Whilst Saudi is likely to have privately celebrated the death of Soleimani, whom it considered an instrument of Iranian expansion, it has recognised that being an open ally to the US poses certain dangers. This article has outlined the historical relationship of rivalry between Saudi Arabia and Iran, and the threat Iran may pose to Saudi interests in the wake of developments in early 2020. It has been suggested that regional tensions and rising uncertainty may curtail investment, that Saudi Arabia may experience a threat from Shi’ite military factions, and that any opportunity for dialogue with Iran may have been lost as Iran seeks retribution for the loss of their revered military commander. It is clear that this regional Cold War must somehow move into a period of detente, or things may get very hot indeed.

 

Citations:

[1] “Profile: Iran’s Revolutionary Guards”. BBC News. 3rd January 2020. https://www.bbc.co.uk/news/world-middle-east-47852262; “US-Iran Relations: A Brief History”. BBC News. 6th January 2020. https://www.bbc.co.uk/news/world-middle-east-24316661.

[2] “Trump: Iran ‘Standing Down’ After Missile Strikes”. BBC News. 9th January 2020. https://www.bbc.co.uk/news/world-us-canada-51039520.

[3] W. Andrew Terrill. The Saudi-Iranian rivalry and the future of Middle East security. Army War College Strategic Studies Institute Carlisle Barracks PA, (2011), p. ix.

[4] Atif Ejaz. The Saudi-Iranian Rivalry and its Regional Effects. Naval Postgraduate School Monterey United States, (2018), pp.4-6.

[5] Danny Postel and Nader Hashemi. “Playing with Fire: Trump, the Saudi-Iranian Rivalry, and the Geopolitics of Sectarianization in the Middle East.” Mediterranean Yearbook 2018 (2018), p.60.

[6] Jeremy Cliffe. “Iran And Saudi Arabia Are Locked In A Cold War-Style Stand-Off – But The Situation Is Even More Volatile”. Newstatesman.Com. 8th January 2020. https://www.newstatesman.com/world/2020/01/iran-and-saudi-arabia-are-locked-cold-war-style-stand-situation-even-more-volatile.

[7] Michelle Nichols. “Exclusive: U.N. Investigators Find Yemen’s Houthis Did Not Carry Out Saudi Oil Attack”. Reuters.Com. 8th January 2020. https://www.reuters.com/article/us-saudi-aramco-attacks-un-exclusive/exclusive-un-investigators-find-yemens-houthis-did-not-carry-out-saudi-oil-attack-idUSKBN1Z72VX.; “Saudi Arabia Oil Attacks: UN ‘Unable To Confirm Iranian Involvement'”. BBC News. 11th December 2019. https://www.bbc.co.uk/news/world-middle-east-50742224.

[8] “Risky Gulf Arab Strategy Tested By Killing Of Iran General”. Haaretz.Com. 9th January 2020. https://www.haaretz.com/middle-east-news/risky-gulf-arab-strategy-tested-by-killing-of-iran-general-1.8377470.

[9] Postel and Hashemi. “Playing with Fire”, p.60.

[10] “Is Saudi Arabia Now In Iran’s Crosshairs After The Death Of Qasem Soleimani?”. Global Village Space. 8th January 2020. https://www.globalvillagespace.com/is-saudi-arabia-now-in-irans-crosshairs-after-the-death-of-qasem-soleimani/.

[11] Jackie Northam. “Saudi Arabia Sought Dialogue With Iran. Then The U.S.-Iranian Conflict Escalated”. Npr.Org. 9th January 2020. https://www.npr.org/2020/01/09/794519810/saudi-arabia-sought-dialogue-with-iran-then-the-u-s-iranian-conflict-escalated.

[12] Sam Meredith. “Energy Infrastructure Attacks Are ‘Probable’: Oil Traders Fear Supply Disruptions In The Middle East”. CNBC. 7th January 2020. https://www.cnbc.com/2020/01/07/us-iran-tensions-oil-traders-fear-supply-disruptions-in-middle-east.html.

[13] “Saudi Vision 2030”. Vision2030.Gov.Sa. January 2020. https://www.vision2030.gov.sa/en.

[14] “Shi’ite Militias In Bahrain And Saudi Arabia Threaten To Avenge Soleiman”. MEMRI. 6th January 2020. https://www.memri.org/jttm/shiite-militias-bahrain-and-saudi-arabia-threaten-avenge-soleimani-and-al-muhandis-targeting-us.

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