Chapter 5 - The Saudi-Iranian rivalry in a regional context

Of the myriad fault lines crossing the Middle East, a distinctly operative one at present is the Saudi-Iranian rivalry. Long subtle and indirect, the regional competition between these two regional powerhouses has gained potency, reach and acrimony in recent years. The confrontation, which thrives on deep-seated psychological and political anxieties, is increasingly direct and divisive. It also follows a zero-sum logic.

This struggle for regional primacy—a goal that arguably remains out of reach for both but nevertheless animates the current “Great Game”—feeds off, manipulates and exacerbates every other fault line in the Arab world: state v. society; ethnic nationalism; Islamism v. Arab-style “secularism”; strains of Islamism and jihadism; and the much-touted but often misunderstood and overstated Sunni-Shia divide.

This rivalry is playing out across the Middle East but also spills onto other issues, such as energy policy and courtship of global powers.

The fundamental drivers of the rivalry

With the persistent weakening of Iraq since 1991, and more so since 2003, Saudi Arabia and Iran have unquestionably become the two powerhouses of the Gulf region.

Structural imbalances between the two states make for fraught geopolitics. Iran’s population is four times the size of Saudi Arabia; its history and civilisational continuity dwarf those of its neighbours, as do its societal cohesion and level of institutionalisation. Its geographical position gives it depth into South and Central Asia and dominance across the Gulf. To Saudi Arabia’s advantage are its massive wealth, regional and global integration, as well as its dense network of regional and international partnerships.

Both countries have unique political systems that are antagonistic to one another. Each has a distinctive, discriminatory model of state-religion organisation. Iran is a theocracy where political power has been submissive to clerical rule since 1979 (velayet e-faqih), a model the founders of the Islamic Republic sought to export. The ruling Saud family derives legitimacy and stability from a 250-year old alliance with the puritanical Wahhabi clergy, which dominates important areas such as justice and education and seeks to proselytise abroad.

While Iran and Saudi Arabia are natural rivals, the 1979 Islamic Revolution in Iran has had a qualitative impact on the relationship. Anxious about extremist challenges from without (Iran’s stated desire to export its revolution) and within (the rise of the Sunni fundamentalist challenge), the House of Saud reacted by hardening its policies at home and regionally.

The relationship between the two countries alternated between periods of tensions (notably in the 1980s and during the term of Mahmoud Ahmadinejad) and periods of relative détente (notably under the presidencies of Ali Rafsanjani and Mohammed Khatami).

The key faultline in the Middle East

There are several reasons why the Saudi-Iranian rivalry has gained such potency. First, it plays out primarily in the weakest Arab states, where it manipulates rather than creates existing fracture lines. Iran since 1979 in particular has sought to expand its influence in countries where large Shia communities exist and have political and social grievances. In contrast, Saudi Arabia remains a status quo power, preferring to deal with governments or co-opt existing politicians. The weakening and in some cases collapse of Arab states has transformed them into arenas of contestation.

Second, this rivalry instrumentalises and exacerbates sectarianism. Over the past few decades, Iran and Saudi Arabia have both courted a wide array of potential allies in these countries. Iran for example supported Hamas, the Palestinian affiliate of the Muslim Brotherhood, to gain cross-confessional and cross-ethnic appeal. Riyadh has allied itself with non-Islamist leaders and politicians.

This has somewhat changed with the shaking of the Arab state order and the intensification of the rivalry. Both countries have had to reckon with the reality that their most reliable and competent allies were their sectarian ones (for example, Hizballah for Iran). Accordingly, both have become hostage to their sectarian partners and to sectarian strategies. At home, sectarianism has served to mobilise public support and create a sense of urgency and solidarity, thus justifying foreign adventures. 

Third, the rivalry is compelling local and regional actors to take sides. Both Iran and Saudi Arabia seek to build alliances and expect of their partners alignment and loyalty. However, the escalation makes such alignment costly and uncomfortable for countries used to hedging, engaged in complex politics at home and often looking for external allies to balance against regional hegemons. Lebanon is an example of a country torn by such dynamics.

Fourth, the rivalry constrains external actors because each country seeks to define the nature of the competition and impose a policy and operational prism on outside powers. Major powers are asked to take sides in this rivalry based on either Saudi Arabia’s or Iran’s interpretation of current events.

An important irony of the Saudi-Iranian competition is that it is driven not only by the profound differences between the two countries, but also by their similarities. Both countries are sectarian powers at home, discriminating against segments of their population. Embedded discrimination reflects the ideological leanings of the ruling elite, as well as the kinship, or group solidarity, that underpins their political system. Abroad, and as argued above, each instrumentalises sectarianism, though their sectarian behaviour varies significantly depending on need, circumstances, local conditions and other factors.

Each country poses as the foremost Islamic champion, a status on which each bases its claim for regional leadership. Saudi Arabia, home to Islam’s holy sites, claims to lead the world’s Sunnis (85  per cent of the Muslim population), while Iran asserts that its Islamic Republic has achieved the perfect model for state-religion organisation, hence its desire to export it.

Each country also sees itself as the cornerstone of the Middle Eastern order. Iran seeks to organise an axis of like-minded state and non-state actors from Iran to the Levant and shape the new order, while Saudi Arabia works to enrol Sunni states in a strategy of containment of Iran.

...in the highly internationalised arena that is the Middle East, each country also seeks to be the primary interlocutor of external powers.

By extension, in the highly internationalised arena that is the Middle East, each country also seeks to be the primary interlocutor of external powers. Iran seeks to obtain international recognition of its senior, central status while at the same time demanding the departure of foreign militaries from the region. For its part, Saudi Arabia claims to lead the Arab world, but also seeks to maintain and deepen security ties to major powers.

Arenas of regional competition

It is no surprise that the Saudi-Iranian competition is playing out most intensely in the Levant. It is precisely the highly strategic nature of the Gulf region that constrains the options and behaviours of both countries. The Gulf region is indeed a highly internationalised space, where Western militaries are present and international interests and attention are constant. US military dominance there makes a direct war unwinnable and creates a balance of deterrence that effectively freezes the geopolitical game. Moreover, the costs of a direct conflict would be massive for all sides, while the outcome would be unsatisfactory for all. Additionally, the relative strength, wealth and cohesion of the Gulf states overshadow those of other Arab countries.

For all the current attention devoted to Yemen, the country remains secondary in terms of the regional balance of power. While the future of Yemen is very important for the security of the Arabian Peninsula, the outcome there will not shape regional dynamics. A victory in Yemen, arguably impossible to define, has no carry-over effect.

Therefore, the competition is unfolding in the weak states and divided societies of the Levant (including Iraq). The political and cultural significance of these states, their geographical centrality and proximity to regional powerhouses (namely Egypt, Israel and Turkey) and their societal and political diversity make them core theatres of the dispute. This is particularly the case for Syria, where Iran and Saudi Arabia (as well as other states) have respectively made considerable investments in favour of, and against, the Assad regime since 2011.

A victory in Yemen, arguably impossible to define, has no carry-over effect.

Originally, this competition played out in Lebanon and Palestine, but their complex politics and demographics prevented an all-out victory for either side. The thinking since 2011 is that victory in Syria would carry over into Lebanon and Palestine. In contrast, Iraq is an arena where Saudi investment has been low. Since 2003, Riyadh, which opposed the US invasion, mostly sought to isolate or ignore the new Iraqi political realities and let the US manage the politics in Baghdad. Iran’s growing influence in Iraq came as no surprise to the kingdom, but it calculated that it had few instruments to contain and counter it.