The recent shift in diplomatic relations between Iran and the US has asked some difficult questions of Saudi Arabia and its allies across the Middle East.

Riyadh, which has long been Washington’s staunch ally in the region, is watching warily as Tehran and the P5+1 group of world powers attempt to finalise a deal that would lift economic sanctions against the Islamic Republic, bringing it back into the international fold.

Yemen conflict

Not long before the nuclear framework agreement was signed on 2 April, Saudi Arabia had rallied a coalition of nine Sunni Arab governments to launch strikes against the Houthis in neighbouring Yemen, claiming Iranian political and military support had fuelled the rebel group’s insurgency.

With Saudi Arabia considering a ground offensive in Yemen, it risks getting sucked into a long, gruelling conflict that has little chance of resolution without a political deal among the warring factions.

The extent to which Iran is providing direct support for the Houthis in Yemen is widely disputed, but nonetheless has fuelled already-strong anti-Iranian sentiment in Saudi Arabia.

Riyadh has rejected Iran’s calls for a ceasefire in Yemen. “How can Iran call for us to stop the fighting in Yemen? We came to Yemen to help the legitimate authority, and Iran is not in charge of Yemen,” Saudi Foreign Minister Prince Saud al-Faisal was reported saying in the capital on 12 April.

Blaming Iran

Yemen’s ousted President Abd Rabbu Mansour al-Hadi, whom Riyadh seeks to restore to power, has levelled the blame for his country’s security meltdown squarely at Tehran.

In an editorial published in the US’ New York Times on 12 April, he described the Houthis as “puppets of the Iranian government” and compared Iran’s support for the rebels with its backing of Shia militant group Hezbollah in Lebanon.

“My country, Yemen, is under siege by radical Houthi militia forces, whose campaign of horror and destruction is fuelled by the political and military support of an Iranian regime obsessed with regional domination,” Al-Hadi said.

US Secretary of State John Kerry, who has backed Saudi Arabia’s “Operation Decisive Storm” strikes in Yemen, was reported in the US media as saying: “There are obviously supplies that have been coming from Iran… there are a number of flights every single week that have been flying in.”

The Houthis took control of the capital Sanaa in September 2014 and, earlier this year, announced they were seizing political power and began to advance south towards Aden.

Although the rebels follow a Shia branch of Islam known as Zaidism, the group does not have close religious or historical ties with the Shia establishment in Iran.

Overplayed connection

Some analysts believe the connection between Tehran and the rebel group is overplayed.

“The key factor in Riyadh’s decision to take military action against the Houthis has to do with the Iranian nuclear agreement and the perceived notion of Iran coming out of its isolation and getting closer to the West,” says Farhan Siddiqi, research fellow at the Middle East Research Institute (Meri) in Erbil, located in the Kurdish region of northern Iraq.

“Evidence of Iranian aid to the Houthis is rather non-existent and what needs to be realised is that the Zaydi branch of Shiism is juxtaposed to the Twelver Shia Islam, which Iran represents.

“Houthis do not represent Iranian interests in the region and cannot be compared with Iranian influence, for example, in Lebanon. Most importantly, it is next to impossible for the Houthis to put a civilian government in place without taking the Sunnis into confidence in Yemen.”

Iranian influence

Iran has denied sending arms to rebel fighters in Yemen, but will undoubtedly continue to maintain its influence in Iraq, Syria and Lebanon.  

Tehran is a long-time supporter of Syria’s President Bashar al-Assad and has provided aid for his fight against Sunni rebel groups in the country’s civil war. Meanwhile, Riyadh has supplied financial assistance, training and arms to factions fighting against the Syrian government forces.

The military intervention against the jihadist group Islamic State in Iraq and Syria (Isis) unusually sees Iran, Saudi Arabia and the US positioned against a common enemy to restore security in Iraq.

The Iranian influence in the Iraqi conflict is heavily ingrained, with Iran-backed Shia militias dominating Baghdad’s ground offensive in the key battle to retake Tikrit earlier this year.

It is unclear to what extent the Iraqi government will lean on the Shia militias in its planned attempt to retake the northern Sunni stronghold of Mosul from Isis.

Tacit acceptance

The US has been careful to downplay the importance of any tactical collaboration with Iran in the war against Isis, but the Americans have tacitly accepted Iran’s role in supporting the operation.

It is important for US President Barack Obama to reassure his most important allies in the region – Saudi Arabia, Israel and Egypt – that any improved relations with Tehran do not come at the expense of existing political friendships.

Obama called Saudi Arabia’s King Salman bin Abdulaziz al-Saud soon after the Iran nuclear framework deal was signed, to reassure him of Washington’s “enduring friendship”.

King Salman responded by saying he hopes the deal will “reinforce the stability and security of the region and the world”, which is a positive spin on what is being viewed by Riyadh as a worrying development.

There are still several hurdles to overcome for a deal on the nuclear programme to be completed by the end of June. Iran and the US have not agreed on the timeline of removing sanctions, while the involvement of the US Congress in Washington’s decision-making will complicate the approval process.

Russia, a member of the P5+1 group negotiating with Iran, decided not to wait that long to cement its trade relationship with Tehran. Less than two weeks after the Lausanne framework agreement was signed, Moscow announced it was pushing ahead with an $800m contract to sell the Islamic Republic an S-300 air defence missile system.

The US has stressed it prefers to find a diplomatic solution to Iran’s controversial nuclear programme, but has warned that military action could be pursued if talks break down. Given the missile system will make Iran more difficult to attack, the weapons deal will be seen as counter-productive to pressurising the Iranians to push for a peaceful nuclear settlement.

Growing power

If sanctions are lifted, Iran should experience a surge in economic growth over the coming years, as overseas investment returns and its oil and gas industry starts to recover. 

Tehran will maintain its political influence in Iraq, Syria and Lebanon regardless of the outcome of the nuclear negotiations, but its rivals fear the Islamic Republic will use its new influence to increase its power base across the so-called Shia Crescent.

“The US has perhaps shown that its national interests in the Middle East are better served through an Iran ‘engaged’ with the international community as opposed to an ‘isolated, threatening’ one,” says Siddiqi.

He says a comprehensive nuclear accord would be a win-win for both the international community and Iran. Tehran is agreeing to have limits placed on its sovereign rights to nuclear technology and weapons in exchange for the economic benefits of investments and trade kick-starting its crippled economy.

“The opening of Iran economically allows for further leverage to the more moderate elements in Iranian society, who will benefit from increased contacts with the West,” adds Siddiqi.

It remains to be seen if Iran’s path towards diplomacy – helped by the appointment of the relatively moderate President Hassan Rouhani – will restrain it from expanding its influence in the wider Middle East.

Historic moment

Whether or not Iran has played a big hand in the Houthis’ ascendancy in Yemen, the escalating conflict represents an important historic moment when Riyadh has formed a broad Sunni alliance to take on a perceived direct Iranian threat.

Conflicts up until now have been fought as proxy wars, with Riyadh using rebel groups in Syria to counter Iranian interests. But for the first time, Saudi Arabia is prepared to send in its own ground troops to stamp out Iran’s influence on its doorstep.

The success or failure of the Iranian nuclear talks will be the key moment in shaping the future influence of the region’s two heavyweights. If Iran emerges as a responsible economic power to rival Saudi Arabia, both countries will have to adjust to a new reality.