Where was the US when Iran and Saudi Arabia restored ties?

The news over the weekend that Iran and Saudi Arabia agreed to reestablish relations took many policymakers by surprise and is seen by some as potentially casting a shadow over the possibility of Israel and Saudi Arabia progressing in their relations.

It came just days after the Wall Street Journal reported that peace between Saudi Arabia and Israel is contingent on assistance from Washington in developing the Saudi civilian nuclear program and the provision of security guarantees.

A senior official traveling with Prime Minister Benjamin Netanyahu’s entourage to Italy naturally put the blame on his predecessors, as well as on the Biden administration.

“There was a feeling of American and Israeli weakness, so Saudi Arabia turned to other channels,” said the senior Israeli official, who briefed reporters in Italy.

Other observers said the rapprochement between the long-strained countries was in part due to Israel’s increasingly right-wing turn and political chaos unfolding due to the judicial reforms.

The move certainly must have been a surprise for Netanyahu, who has often portrayed Israel’s strength as a ticket to more relations in the region.

While all the critics of the Iran-Saudi deal may be correct, it would be wise to urge caution in how Israel moves forward. It would be good for the government to welcome the deal cautiously but to also draw the necessary conclusions.

First and foremost, the fact that China mediated a deal between two Middle Eastern powers says something about the US.

China is a rival to America and the countries have been vying for influence over the region for decades.

China’s ability to enter into the Iranian-Saudi standoff is a result of the vacuum created by the lack of US engagement in the region.

It is no secret that the Biden administration – and the Obama administration before it – viewed their role as moving away from the Middle East.

Obama did this by setting redlines in Syria that were never enforced, allowing Russia to enter the country. The Biden administration has done the same by signaling to the Saudis and Emiratis that they are on their own when it comes to fighting the Houthis in Yemen.

China has outshone the US in the Middle East and that will have repercussions on Israel, whose alliance with America directly affects its own standing in the region.

It has been long argued, when the US is strong and perceived as engaged in the region, this empowers Israel and vice versa.

On the other hand, Israel will need to wait and see if the normalization of ties between Iran and Saudi Arabia means that Riyadh will have more influence and connections when it comes to reining in Iran.

When Iran is more aggressive, whether in weapons trafficking to Lebanon or Yemen, or destabilizing Iraq and Syria, then Israel and Saudi Arabia are both threatened. Saudi Arabia cares deeply about Yemen and Lebanon, and also Iraq and Syria; and this means that Iran’s actions will be in the spotlight after the agreement.

We should welcome diplomacy as a pathway toward peace and stability in the region. At the same time, we should make it clear that the redlines relating to nuclear weapons production remain the same as in the past.

Riyadh does not want Iran to have a nuclear weapons program. It is likely true that China also does not want an Iranian bomb, even if Beijing has chosen to remain silent on this issue, or appear to support Iran against US sanctions in the past.

Israel’s other interest is to maintain its track of emerging and potential ties with Saudi Arabia. As we have seen with reconciliation with Turkey – which has warm relations with Tehran – relationships can evolve on separate tracks.

Courtesy: The Jerusalem Post

 

Saudi-Iranian agreement underscores the desire to resolve disputes

Minister of Foreign Affairs Prince Faisal bin Farhan said that Saudi Arabia’s agreement with Iran to restore diplomatic ties does not mean that both countries have reached a solution to all disputes between them. He emphasized that the Saudi-Iranian agreement to restore diplomatic relations underscores the joint desire by both sides to resolve disputes through communication and dialogue.

Prince Faisal said this in an interview with Asharq Al-Awsat newspaper following the recent decision of Saudi Arabia and Iran to restore diplomatic ties that were severed in 2016. Riyadh and Tehran also agreed to reopen their embassies within two months.

In his first interview since the China-sponsored agreement was reached, Prince Faisal said he was looking forward to meeting his Iranian counterpart soon to build on the deal. “We are preparing to restore our diplomatic ties within two months, so it is normal for us to exchange visits in the future,” he said.

Prince Faisal noted that diplomatic ties are at the core of relations between countries. “This is doubly significant for two neighboring countries of the size of Saudi Arabia and Iran. They share several religious, historic, and cultural ties, and so the agreement was reached through China’s sponsorship and mediation, and that was after several rounds of talks over the past two years in Iraq and Oman.”

Prince Faisal reaffirmed that Saudi Arabia is forging ahead in the path of de-escalation it has chosen because of its sense of responsibility in bolstering regional and international security and stability. “We, in the Kingdom, hope to open a new chapter with Iran and bolster cooperation that would consolidate security and stability and push forward development and prosperity, not just in both our countries, but the entire region,” he said.

Referring to Iran’s commitment to non-interference in the affairs of other countries, Prince Faisal explained that one of the most important demands for opening a new chapter in ties with Iran is committing to the agreement signed between the two countries.

“There is no doubt that both our countries and the region have an interest in activating joint cooperation and coordination and focusing on development instead of hegemony. Such an approach will achieve the aspirations and hopes of our peoples and generations to come for a better future that is secure, stable, and prosperous,” he said while hoping that “the Iranians share our hope and goals and we look forward to working with them to achieve them.”

The foreign minister emphasized that as a neighboring country, Iran’s stability and development will benefit the interest and development of the region and Saudi Arabia wishes it well. Prince Faisal said that Iran’s continued development of its nuclear capabilities is a cause for alarm.

“We have repeatedly called for the Gulf region and the Middle East to be free of weapons of mass destruction. We call on Iran to commit to its nuclear pledges and intensify its cooperation with the International Atomic Energy Agency, and we will continue to work with allies and friends to ensure that,” he said.

Prince Faisal said that China’s sponsorship of the agreement would bolster coexistence and security in the region, and good neighborliness between countries.

“The three countries have a joint interest in preparing a regional environment that is marked by peace, security and stability so that they can work on building and developing regional and international partnerships that achieve economic development and prosperity for the people.”

The minister noted that Saudi Arabia welcomed the initiative proposed by Chinese President Xi Jinping. “The initiative worked with it as an extension of the negotiations that it has been holding with the Iranians for two years. It is no secret that China enjoys positive relations with Saudi Arabia and Iran that has helped achieve rapprochement and highlight the Kingdom’s legitimate concerns,” he said.

On his latest visit to Kyiv and Moscow and talks about a Saudi mediation to stop the Ukraine-Russia war, Prince Faisal stressed that the Kingdom was prepared to exert efforts and work with the two countries to reach a political solution that ends the crisis and fighting and saves lives.

“We were and are still ready to exert efforts and to work with both countries to reach a political solution that would end the crisis and fighting and save lives.”

Prince Faisal noted that the efforts of Crown Prince and Prime Minister Mohammed bin Salman led to a prisoner exchange between the two sides.

“The Kingdom has been focusing on meeting the immediate humanitarian needs that emerged from the war, and our humanitarian response in Ukraine is evidence of this drive. The situation requires both parties, as well as the international community, to stop the dangerous escalation that has harmed the two countries and Europe’s security and weakened international cooperation,” he added.

 

Iran: One agreement seven achievements

The agreement between the Islamic Republic of Iran and Saudi Arabia to resume bilateral relations after seven years is tangible and analyzable from various aspects. Except for the Israeli regime and to some extent the United States, the reactions have been positive, and regional and international actors have welcomed this agreement.

This agreement is considered a victory for the Islamic Republic from various perspectives. Of course, one should be cautious about the depth and scope of this victory and wait to see how the details of the agreement will play out in practice, but so far, some of its achievements for Tehran can be listed. 

The first achievement for Iran shows Tehran is willing to engage in dialogue. And tensions, no matter how extensive and complicated they may be, can be managed if both sides show flexibility and rationality. This demonstrates that contrary to Western propaganda and claims, the deadlock between America and Europe with Iran has not been due to Tehran's obstinacy, but rather these Western countries lack interest or readiness to resolve issues and differences due to various reasons.

The second achievement goes back to America's efforts to isolate Iran. The agreement with Saudi Arabia, which was achieved through the mediation of various countries led by China, is the latest evidence of the failure of this effort. Iran's dynamic diplomacy from East Asia to Latin America indicates that most countries prefer their national interests over US dictates when interacting with Iran.

The third point relates to the strategic alliance of Islamic countries. Although, one should not be delusional about the agreement between Iran and Saudi Arabia, it cannot be denied that these two countries are important and influential in the Islamic world. The closer Tehran and Riyadh get to each other, the less successful will be those who seek to create divisions among Muslims. one must not forget that uniting sects and Islamic countries has always been a permanent strategy for Iran.

The fourth achievement concerns the situation of the Zionist regime and its relation to the aforementioned agreement. Israelis, especially in the past decade, have intensified their efforts to demonize Iran and form alliances against Tehran in the region. The "Abraham Accords" is at the peak of these efforts. They seek to change friends and foes in Muslim countries. The agreement between Iran and Saudi Arabia is an undeniable blow to this Zionist effort.

The fifth achievement is related to Iran-US relations. America is trying to deceive Iranian society into believing that there is no way out other than a bigger JCPOA, i.e. surrendering to the White House’s extortion or that Iran has no choice but to kiss the wolf's paw to solve its problems. The agreement with Saudi Arabia, which was struck in Beijing outside US equations, shows that it is possible to reach an agreement without the involvement of a self-proclaimed master. This was in contrast to the previous government's mistaken belief that if it reach an agreement with the US, relations with others, including regional countries, would also improve. However, in practice, the opposite happened. 

The Iran-Saudi Arabia agreement signed in China can be considered as Beijing's first political-security entry into the complex relations in West Asia. This successful entry is a sign of transition and departure from the current global order. In the new global order, the US, unlike the past, will not have hegemony and will lose its leverage. It can no longer bully others through petrodollars. The marginalization of the US role in the region and its exclusion from negotiations and equations is a significant sixth achievement.

And finally, the seventh achievement, those who were dreaming of an easy regime change through media hype in autumn and enjoying the open and hidden support of the Saudi kingdom. Riyadh's sudden agreement with Tehran came down like an avalanche on this complacent and treacherous group and once again showed that mercenaries also have an expiration date for their masters.

 

Globalization to be reshaped by US-China power tussle

In an increasingly polarized world, the need for multilateral frameworks that enable countries to do business with each other, even if they do not always see eye to eye, is stronger than ever, said Singaporean Deputy Prime Minister Lawrence Wong.

“If we can forge stronger partnerships between the major powers and all countries in the region, we can help foster a more stable and prosperous Asia,” he stressed in a keynote speech at the 55th Wharton Global Forum on Saturday, calling for new working arrangements and international collaboration to tackle issues that affect everyone, such as climate change and future pandemics.

“We must all work together to fortify multilateralism, and the global rules of the game.” 

What happens over the next few decades will be defined by how the rivalry between China and the US unfolds, said Wong, describing Taiwan as a dangerous flashpoint, with the Ukraine war adding to tensions.

Speaking to 800 alumni of Wharton School of the University of Pennsylvania, business leaders and government officials at the Shangri-La Singapore, he noted that on the economic side, the era of untrammeled globalization we enjoyed over the last 30 years is over.

More and more multinationals are looking to move production back home or relocate to markets that have a bigger consumer base, where they are less likely to get caught in geostrategic crossfires.

“Governments are also embracing more muscular industrial policies. The US, China and European Union are stumping out more aggressive support, in the form of tax breaks and subsidies, to develop domestic strengths in what they assess to be critical industries like semiconductors and green energy. We are seeing the emergence of an industrial policy arms race, and a huge contest for leadership in key technologies, which is likely to escalate with time,” said Wong, who is also Singapore’s Finance Minister.

“Left unchecked, if this trend continues, we will see a more fragmented and dangerous global order.”

While the leaders of both the US and China have affirmed their intent to engage one another and said they do not want a new Cold War, more needs to be done, said Mr Wong, highlighting Singapore’s support for multilateral pacts such as the Regional Comprehensive Economic Partnership, the world’s largest free trade agreement, covering countries such as China, Japan, Australia and the 10 Asean nations.

“Meanwhile, the US has signaled its continued commitment to deepen its economic engagement of the region through the Indo-Pacific Economic Framework. Singapore has welcomed this too and hopes to work with partners to develop a framework which is open, inclusive, and flexible.”

Wong highlighted how an open, rules-based international order helped keep the world relatively stable.

While such an order was never perfect he said, “This stability fostered international cooperation and gave birth to an era of unparalleled economic transformation – many countries prospered, and millions were lifted out of poverty”.

“Today the world is more divided than ever before. But amidst these differences, we must find enough common ground to solve our collective problems.”

He added that multilateral institutions, like the World Bank, World Trade Organization and World Health Organization, which have helped define the rules-based international order over the decades, remain strong and relevant.

Wong said Singapore would do its part to advance these goals, while being realistic. “After all, we are really one of the smallest countries in Asia. We know that we have to adapt to the world as it is, not what we would like it to be.”

If not, he cautioned, Singapore might go the way of another Singapore – an American village founded in the 1830s in Michigan. Once a thriving lumber port town hoping to emulate the Asian city it was named after, it is now a ghost town after the lumber trade went into decline.

Wong, who is an alumnus of the University of Michigan, said Singapore is determined not to meet the same fate. “Singapore today may be in a stronger position than when we started out... but we will always be that little red dot in the world. And in this era of change, really, one can never take things for granted.”

To thrive and prosper, Singapore will do its best to stay relevant and add value in the global network as a key node for trade, finance, talent and ideas.

“We will continue to build a vast network of friends to promote peace and stability in our region, and, most of all, to preserve our sovereignty and right to determine our own future.”

Saudi Aramco posts highest annual profit

Saudi Aramco announced on Sunday its full-year 2022 financial results, reporting a record net income of US$161.1 billion — its highest annual profits as a listed company. Aramco also declared a fourth quarter dividend of US$19.5 billion, to be paid in the first quarter of 2023.

Commenting on the results, Aramco President and CEO Amin H. Nasser said, “Aramco delivered record financial performance in 2022, as oil prices strengthened due to increased demand around the world.

“We also continued to focus on our long-term strategy, building both capacity and capability across the value chain with the aim of addressing energy security and sustainability.”

“Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real — including contributing to higher energy prices.

“To leverage our unique advantages at scale and be part of the global solution, Aramco has embarked on the largest capital spending program in its history, and last year our capex rose by 18.0% to reach US$37.6 billion.”

“Our focus is not only on expanding oil, gas and chemicals production, but also investing in new lower-carbon technologies with potential to achieve additional emission reductions — in our own operations and for end users of our products,” he added.

Aramco’s net income grew to a record US$161.1 billion in 2022, from US$110.0 billion in 2021, an increase by 46.5%.

The increase in net income reflects stronger crude oil prices; higher volumes sold and improved margins for refined products. Q4 2022 net income is in line with analyst estimates, excluding certain non-cash items of around US$3.3 billion.

Free cash flow reached a record US$148.5 billion in 2022, as compared to US$107.5 billion in 2021. Aramco continues to emphasize a strong balance sheet and its gearing ratio at the end of 2022 was -7.9%, compared to 12.0% at the end of 2021.

Aramco declared a dividend of US$19.5 billion for the fourth quarter, to be paid in Q1 2023. This represents a 4.0% increase compared to the previous quarter, aligned with the company’s dividend policy aiming to deliver a sustainable and progressive dividend.

Additionally, the Board of Directors also recommended the distribution of bonus shares to eligible shareholders in the amount of one share for every 10 shares held, subject to required Extraordinary General Assembly and regulatory approvals.

Capital expenditure in 2022 was US$37.6 billion, an increase of 18.0% from 2021. Aramco expects 2023 capital expenditure to be approximately US$45.0 billion to US$55.0 billion including external investments, with capex increasing until around the middle of the decade.

Aramco also completed an energy infrastructure deal in February 2022 resulting in a consortium of investors, led by BlackRock Real Assets and Hassana Investment Company, acquiring a 49% stake in a newly formed subsidiary, Aramco Gas Pipelines Company (AGPC), for US$15.5 billion.

US annoyed by China-brokered Iran-Saudi deal

An agreement struck by Iran and Saudi Arabia on Friday to re-establish relations has shifted concerns back to the state of the role of United State in the Middle East — especially since the deal was brokered by Washington’s main adversary, China.

Both Iran and Saudi Arabia announced they will resume diplomatic relations and open up embassies once again in their respective nations within two months, according to a joint statement.

Alex Vatanka, Director, Iran Program at the Middle East Institute, said the Iran-Saudi Arabia deal was an important agreement for the region but questioned whether it would put an end to any violence, including in war-torn Yemen.

“It remains to be seen if they can have a meaningful dialogue. Opening up embassies is not the same as having a meaningful dialogue,” Vatanka said. “There will be a steep journey ahead.”

Saudi Arabia, cut ties with Iran in 2016 after protesters stormed the nation’s embassy in Iran after the execution of a Shiite Muslim cleric along with the execution of other prisoners.

Both nations have also been on opposing sides of the deadly civil war in Yemen, with Saudi Arabia supporting Yemen’s government and Iran backing the opposition Houthis.

The news on Friday was a diplomatic and political success for Beijing, which also recently published a peace plan to end the war in Ukraine. 

China’s top diplomat Wang Yi quickly hailed the agreement as a victory on Friday and said his country would continue to address global issues, according to statements carried by several Chinese newspapers.

The agreement undercuts the posture of the US in the region. The US has downsized in Syria after withdrawing forces in 2021 from Afghanistan.

The deal also comes as Saudi Arabia is demanding certain security guarantees, a steady flow of arms shipments and assistance with its civilian nuclear program in order to normalize relations with Israel, a major US ally, the White House confirmed on Friday.

Speaking to reporters, National Security Council spokesperson John Kirby said the US was informed about the Saudi Arabia-Iran talks but played no role in them. Kirby welcomed the normalization of relations between the two countries should it ease violence in the Middle East.

“To the degree that it could deescalate tensions, all that’s to the good side of the ledger,” Kirby said, adding the US is not stepping back from its role in the Middle East.

Vatanka, from the Middle East Institute, said both Iran and Saudi Arabia have been seeking to ease tensions for the past couple of years. 

While he was surprised by China’s role as a mediator, Vatanka said the deal does not constitute a major loss for Washington in the long-term.

“It symbolically makes the United States look like it’s not able to be a key player,” he said. “But it’s not going to be a Chinese-dominated Middle East.”

China is a large buyer of Saudi oil and maintains close relations with Iran. 

The US has had strained relations with Iran for decades and a similar normalization agreement would have been next to impossible for Washington to mediate.

Some experts have cautioned that China is beginning a new era of diplomatic engagement in the Middle East, where it before mostly had economic ties.

Jonathan Panikoff, Director, Scowcroft Middle East Security Initiative in the Middle East Programs for The Atlantic Council, warned of an emergence of China’s political role in the region.

“It should be a warning to US policymakers, Leave the Middle East and abandon ties with sometimes frustrating, even barbarous, but long-standing allies, and you’ll simply be leaving a vacuum for China to fill,” Panikoff wrote in a Friday analysis.

Middle East politics has become more strained for the US as Israel clashes with Palestinians seeking a free state in Israeli-occupied Gaza and the West Bank. The ongoing civil war in Syria, violence in Yemen, heightened tensions over Iranian support for Russia and a scrapped nuclear deal with Tehran have added to complications.

President Biden traveled to Saudi Arabia last summer amid high gas prices in the US and was seen fist-bumping Crown Prince Mohammed bin Salman, who has been criticized for overseeing human rights abuses and for the killing of the US-based journalist Jamal Khashoggi. A few months after the visit, the White House was angered when the Saudi-led oil alliance OPEC+ slashed oil production output.

 

 

Israeli Grudge: Saudi-Iran deal destroys defense wall against Iran

A credible military threat against Iran coupled with a tough Western diplomatic stance is the best way to weaken the impact of the resumption of diplomatic relations between Tehran and Riyadh, a senior Israeli official told reporters over the weekend.

The official spoke in response to the Iranian-Saudi Arabian deal reached to reestablish relations after years of hostility that had threatened stability and security in the Gulf and helped fuel conflicts in the Middle East from Yemen to Syria.

Israeli politicians immediately expressed concern as the move appeared to throw a monkey wrench in one of Netanyahu’s new government’s chief policy initiatives – to normalize ties with Saudi Arabia.

Israel has presumed that the necessity of creating a Gulf alliance between Israel and its Arab partners against Iran would help provide an incentive for the establishment of diplomatic ties between Saudi Arabia and the Jewish state.

Former Prime Ministers Yair Lapid and Naftali Bennett immediately warned of its implications for Israel’s strategy against Iran as they used the moment to attack Prime Minister Benjamin Netanyahu, who was in Italy when news of the deal broke.

The rapprochement signals the collapse of the regional defense wall that we started building against Iran, Lapid said, adding that it reflects the complete and dangerous failure of the Israeli government’s foreign policy.

 “This is what happens when one deals with legal insanity all day instead of doing one’s job against Iran and strengthening relations with the United States,” Lapid said.

The senior Israeli official, however, blamed the governments of Lapid and Bennett for the Iranian-Saudi rapprochement, noting that talks toward the agreement had begun already last year when they were in power.

Negotiations for this deal started about a year ago, with a round of at least five meetings, including the arrival of senior Saudi officials in Iran” and Iranian visits to Saudi Arabia in return, the official said.

It’s possible that at the time the Saudis felt that the Israeli stand on Iran was not strong enough, the official speculated.

The Saudis felt that the West’s position towards Iran was weak, particularly in the aftermath of Tehran’s armed drone attack against Saudi oil fields coupled with talks to revive the 2015 Joint Comprehensive Plan of Action, the Israeli official explained.

Western countries have toughened their positions against Iran, but it’s still not strong enough, the official said.

An Israeli official told Iran International that Tehran’s agreement with Riyadh was not a surprise and that Israel did not believe the deal impacted its pursuit of normalizing ties with Riyadh.

Bennett, however, called the news of the renewed Iran-Saudi alliance a serious and dangerous development for Israel and a political victory for Iran.

“This delivers a fatal blow to efforts to build a regional coalition against Iran,” said Bennett.

He charged that it was a mark of the resounding failure of the Netanyahu government and stems from a combination of political neglect with the country’s general weakness and internal conflict.

“Countries in the world and the region are watching Israel in turmoil over the dysfunctional government that is engaged in systematic self-destruction,” Bennett said, adding in this case one of those countries chose a side.

Every day of this government’s “existence endangers the State of Israel,” Bennett stated.

“We need a broad national emergency government, which will work to repair the damage,” Bennett added.

Former defense minister Benny Gantz said Netanyahu had abandoned the security of Israel and its citizens. “The enormous security challenges facing the country are increasing, and the prime minister and his cabinet are busy with a coup d’état.”

Knesset Foreign Affairs and Defense Committee Chairman Yuli Edelstein said the alliance was “bad for Israel and the entire free world.”

Iranian expert Danny (Dennis) Citrinowicz from the Institute of National Security Studies at Tel Aviv University tweeted that the new alliance was a message to Israel that its dream of a regional alliance was not feasible and never had been.

It underscored the point that most of the countries in the region view dialogue as the best way to deal with Iran, leaving Israel as the sole country that is focused on a military option.

Analyst and former MK Ksenia Svetlova of Mitvim – The Israeli Regional Institute for Regional Foreign Policies noted on Twitter that “Saudi Arabia is normalizing relations. No, not with Israel but rather with Iran”, while it has rebuked Israel publicly for its treatment of the Palestinians.

“Only two months ago, Netanyahu promised to bring peace with Saudi Arabia. We seem to be moving in the opposite direction,” she wrote.

The Wall Street Journal in an editorial published Friday blamed the Biden administration for the Iranian-Saudi deal and the fact that Saudi Arabia has yet to join the Abraham Accords, which is the vehicle by which Israel has already normalized ties with four Arab countries.