Riyadh made a surprising announcement in June: after an absence of more than 18 months, a Saudi ambassador would return to Syria. The announcement, was a significant sign of a thawing in the often strained relations between the two countries. It was followed by an official visit by King Abdullah bin Abdulaziz al-Saud to Damascus on 7 October.

Saudi Arabia’s foreign policy has traditionally rested on three pillars: Islam, oil and its role as a dominant power in the Arab world. As the custodians of the two holy cities of Mecca and Medina, the largest economy in the Middle East and home to 21 per cent of the world’s proven crude oil reserves, Saudi Arabia has always regarded itself as a diplomatic heavyweight in all three arena.

Key fact

Companies based in the GCC invested $750m in Syria in 2007

To date, Riyadh has used its considerable diplomatic weight prudently, particularly in energy matters. Speaking to the media on 26 September, Saudi Oil Minister Ali al-Naimi described the oil price, which was then $75 a barrel, as a “fair balance” between producer and consumer interests.

Al-Naimi said there was no need for oil cartel Opec, of which Saudi Arabia is the de facto leader, to change production levels ahead of the group’s next meeting in December.

Regional diplomacy

However, the kingdom does not have complete diplomat dominance in the region. Syria and Iran both have their followers and, in May 2008, Qatar stepped into the limelight, brokering an agreement between rival Lebanese factions to bring to end an 18-month-long political crisis in the country.

It is just one example of where Riyadh has appeared wanting. “Their [Saudi Arabia’s] diplomacy went missing in Lebanon, in Iraq and in Palestine, allowing countries such as Qatar and Turkey to step in and take leading roles,” says Paul Salem, director of Beirut-based think tank Carnegie Middle East Centre.

Salem says the future is more promising for Saudi Arabia. “Under [former US president George W] Bush, the US abandoned diplomacy for war,” he says Salem. “But now, as Saudi Arabia decides it is time to reach out, the US is not talking about these issues in terms of black and white, good and evil, so the environment has improved.”

Riyadh has a long history of acting as the region’s diplomat. In 2002, it proposed the Saudi peace plan, into which King Abdullah invested considerable political capital.

Under the peace deal, the Arab world would recognise the state of Israel in return for Israel’s withdrawal from the occupied territories, and find a resolution on the Palestinian refugee issue.

However, Riyadh’s plan was rejected by Israel, received a cool reception from the US and has since remained dormant.

But now, under the new administration of Barack Obama, the US has been trying to coax Riyadh into a more active diplomatic role in the Middle East peace process once again.

The Saudis are critical to resolving many issues in the region. One key area for Saudi Arabia and the US is the kingdom’s relationship with Syria, Iran’s closest ally. A good relationship between Riyadh and Damas-cus could lead to greater stability in the region.

Riyadh’s new ambassador in Damascus, Abdullah al-Eifan, replaces Ali al-Qahtani, who was withdrawn in February 2008 as relations with Damascus deteriorated.

Al-Eifan’s appointment to Damascus is seen as mirroring Washington’s diplomatic efforts with Syria. In June, President Obama announced that he too would dispatch an ambassador to Syria.

Riyadh’s previous policy of isolation has arguably only served to strengthen Syria’s relationship with Iran, with which Saudi Arabia has a difficult relationship because of the countries’ division over Sunni and Shia Islam.

“It looks like the Saudis have realised Al-Assad is either unwilling or unable to deliver on their key demands”

Hussain Abdul Hussain, fellow, Chatham House

In 2005, relations between Saudi Arabia and Syria reached an all-time low with the assassination of Saudi-backed former Lebanese Prime Minister Rafiq Harriri.

Although still subject to a UN investigation, Syria has been the main target of blame for the assassination. Under intense regional and international pressure, Syria withdrew its troops from Lebanon in April 2005, having occupied the country since 1991.

In terms of Syria’s diplomatic efforts, President Bashar al-Assad has often been openly provocative, says Mike Singh, Boston-based fellow at US think tank the Washington Institute for Near East Policy.

In 2006, after praising Shia political and paramilitary organisation Hezbollah’s resistance to the Israeli invasion of Lebanon, Al-Assad referred to the leaders of the Arab world, a clear reference to Saudi Arabia, as “half-men” for their lack of support.

In May last year, the situation came to a head as Damascus challenged Riyadh on the streets of Beirut, with a military confrontation between Hezbollah and the Saudi-backed March 14 bloc. Following the defeat of the March 14 bloc, the Saudis have kept a low profile in Lebanon, says Hussain Abdul Hussain, a visiting fellow at UK think tank Chatham House.

That has allowed others, including Syria and Qatar, to make the diplomatic running in Lebanon. In 2008, Western leaders, most notably France’s President Nickolas Sarkozy, lauded Al-Assad as the broker of the peace deal between the two Lebanese political blocs in Doha. But having long played the leader of the anti-Western Arab front, Damascus is now desperate for wider acceptance in the Arab world and the potential investments from GCC states that could come with it.

Gulf investment

Syria received $750m of investment from the GCC in 2007, a figure that could grow as relations with Saudi Arabia warm. “The convergence of goals with Iran, particularly regarding Israel, has been financially lucrative for Syria, but also comes at the cost of its relationships with its other neighbours,” says Singh.

“Its bargaining chips are security in Lebanon and Iraq – something the Saudis want too,” says Salem.

It is unrealistic, however to imagine that Syria can easily be prised away from its current Iranian orbit. “That is no longer what this is about,” says Salem. “The Saudis are trying to encourage the Syrians to take a Syrian position rather than an Iranian position – a push towards the centre.”

According to Salem, there has been a dramatic improvement in this regard over the past six months. “Syria has been sending signals for the past year and a half to the Saudis and US that it is open to talks on Lebanon and Iraq,” he says.

However, it is important not to overstate what is currently an embryonic relationship, according to Simon Henderson, director of the Gulf and energy policy programme at the Washington Institute.

 “I notice the new envoy was formerly in South Korea so is almost certainly a professional diplomat rather than a special envoy with military or intelligence background,” says Henderson, indicating that the new diplomat is there to meet and greet rather than enter heavyweight negotiations.

These talks will be carried out by King Abdullah and Al-Assad in person. The two met most recently at the inauguration in September of the King Abdullah University of Science & Technology (Kaust) in Jeddah. They also met in January on the sidelines of the Arab Economic Summit in Kuwait.

Following the September meeting, President  Al-Assad issued a formal invitation to King Abdullah to visit Damascus. Their talks need to address key issues such as Syria’s relations with Iran.

“The Saudis are trying to encourage the Syrians to take a Syrian position rather than an Iranian position”

Paul Salem, director, Carnegie Middle East Centre

 “One of them will have to change [their negotiating position] dramatically,” says Hussain. “They are on totally different wavelengths and this will not be changed by an ambassador.”

But the growing threat to the region posed by Iran means Riyadh has an ongoing interest in nurturing relations with Syria. Following the removal of Saddam Hussain as a regional threat in 2003, Riyadh’s recurring nightmare has been that Iran will become a nuclear power.

Just as alarming, however, is the prospect of US military action to prevent such a situation.

As international pressure mounts on Iran to halt its nuclear weapons programme, analysts have suggested Saudi Arabia could use its position as de facto leader of Opec to apply pressure on Tehran, in the hope that reduced prices would squeeze the republic’s economy and force a retreat on its nuclear enrichment programme.

However, as indicated by Al-Naimi’s comments on the oil price in September, the kingdom is unlikely to do this as it is keen to be a stabilising force for the global economy. Such action, against a fellow Opec member, would also be viewed from Tehran as overt agitation.

“I do not think they [Riyadh] mind US economic pressure on Iran through increased sanctions, so long as they are not directly involved,” says one London-based analyst.

Iran’s economy is in serious trouble, a position exacerbated by a crude oil price at about $70 a barrel, significantly below the country’s budgeted break-even price of about $90 a barrel.

The world’s largest crude oil producer had the opportunity to discuss its role in tempering the threat posed by Iran with President Obama at the G20 summit in the US on 24 September, but King Abdullah opted to attend the Kaust inauguration instead. Foreign Affairs Minister Prince Saudi al-Faisal and Finance Minister Ibrahim al-Assaf attended the summit in his place.

 “Saudi Arabia is not playing a leading role at the moment,” says Hussain. “It is still finding its way with the Obama administration. There is a difference in approach to some issues in the region, so it has taken a back seat while it waits to see what comes of Obama’s efforts.”

Saudi-Syrian relations are likely to remain prickly for some time to come. Both parties have an interest in maintaining a veneer of diplomatic cordiality and pan-Arab unity, but there is a lot of work to do to build the relationship into a more profound and practical one that will help bring about stability in the region.