The End of US Domination at the Persian Gulf (III)

China gains new influence at the Persian Gulf with its successful mediation in the Saudi-Iranian conflict. Decline of US domination could also weaken Germany's position in the region.

RIYADH/TEHRAN/BEIJING (Own report) – With China gaining influence at the Persian Gulf through its successful mediation in the conflict between Saudi Arabia and Iran is not only calling into question US domination, but also Germany's position in that region. Beijing has achieved initial success in bringing about rapprochement between Riyadh and Tehran. Both are now intending to resume diplomatic relations and are negotiating far-reaching cooperation. It they succeed, US efforts at establishing a sort of Arab NATO against Iran, are about to fail. For decades, the Federal Republic of Germany has also been benefitting from US domination in the Middle East, as it could always procure crude oil and natural gas from the region, whenever needed and engage in profitable business deals. Most recently, a former Siemens CEO temporarily served as economic advisor to Saudi Crown Prince Muhammad bin Salman, the actual ruler of the country. It is uncertain whether the receptiveness to Berlin's interests in the Middle East will continue despite the loss of U.S. influence. The close alliance between Saudi Arabia and the United States has been in a crisis for some time.

Oil for Security

Since the end of World War II, Saudi Arabia has been considered an exceptionally close US ally. Their alliance was based on the agreements reached on a U.S. warship in the Suez Canal in February 1945 between US President Franklin D. Roosevelt and King Abdul Aziz Ibn Saud. In essence, they provided for the USA having access to Saudi oil at any time in exchange for guaranteeing the security of the Saudi ruling clan. The deal has lasted for many decades, becoming frail, when Washington began to focus on its major power struggle against China. This was signaled when US President Barack Obama officially declared the Pivot to Asia in November 2011,[1] coupled with the withdrawal of US troops from Iraq and Afghanistan as well es the attempt to end the Iran conflict with the 2015 nuclear deal. This was a setback for Riyadh, traditionally a bitter rival of Teheran. Fears that Washington – preoccupied in the Asia Pacific region – could abandon Saudi Arabia in an emergency situation, were confirmed when, on September 14, 2019, presumably Iranian made drones and missiles hit two Saudi oil facilities and reduced the country's oil production by half for two weeks. The USA did not come to its aid. Riyadh was shocked.[2]

An Arab NATO

At the time, Saudi Arabia – alongside other Arab Guld states – reacted in two ways. On the one hand, seeking to replace US protection that had become unreliable, it began to cooperate more closely with Israel, Iran's toughest adversary in the region, including in the intelligence and military fields.[3] In their rapprochement with Israel, the United Arab Emirates and Bahrein even went a step further and, in September 2020, signed the Abraham Accords, which launched extensive cooperation with Tel Aviv. This was accomplished through US mediation and considered by Washington to be a success in its efforts to establish a sort of Arab NATO that would militarily contain and, if desired, even attack Iran. The Biden administration has been striving to include Saudi Arabia in the Abraham Accords. However, Riyadh demanded reliable security guarantees in return, and – in view of Iran's nuclear aspirations – US support in developing its own nuclear program, which explicitly should include independent uranium enrichment. Washington contemplated making a minor concession to Riyadh by upgrading it to the status of a major non-NATO ally. Negotiations on this issue were still ongoing in early March.[4]

A Policy of Balance

On the other hand, Saudi Arabia had begun to diversify its foreign relations in the aftermath of the September 14, 2019 attacks. It oriented itself less toward the EU, which, since 2013. under German pressure, had attempted to establish itself as the influential stabilizing authority for a wide ring of nations around Europe,[5] but had been unsuccessful. Riyadh reoriented much more toward close cooperation with China. This could also be seen by the fact that it began to intensively cooperate with the People's Republic of China on its megacity project Neom, as well as relying on Huawei technology for establishing its 5G network. Washington had unsuccessfully sought to prevent this. Parallel, the United Arab Emirates (UAE) are also orienting on comprehensive cooperation with Beijing.[6] Simultaneously, Saudi Arabia began to put out feelers in the direction of Iran, to explore chances for reaching a settlement. Therefore, for years there have been reports of Saudi-Iranian talks, which under Iraq’s mediation were being held in Baghdad. When on January 3, 2020 Iranian General Qassem Soleimani was murdered in a drone attack at the Baghdad airport, there were reports that he had been on his way to indirect talks with Riyadh. The UAE also forged ahead in its cooperation with Iran and resumed its embassy operations in Tehran in August 2022.[7]

Stabilizing Authority China

China has succeeded in advancing Riyadh and Tehran’s rapprochement and securing it solidly enough that on March 10, both sides could announce that they were renewing their diplomatic relations, which had been suspended in 2016. The prerequisite for this success was obviously that China entertains comprehensive economic relations with both Saudi Arabia [8] and Iran [9]. The international Crisis Group noted that “as a major power” the People’s Republic was “able to provide assurances to both sides,” which helped them overcome their lingering reticence.[10] Further negotiations have begun and should produce concrete results. The initiation of wide-ranging economic cooperation between the two countries is also in discussion. Observers point to the fact that the developing Saudi Arabia-Iran rapprochement by no means is a done deal. There are still many obstacles ahead that could lead to failure at any time. For the People’s Republic, however, this is now the test of whether it can not only successfully initiate the reorganization of a region of tension alone, but also accompany it to a successful conclusion. In doing so, it has openly put its potential for taking on the role of a global stabilizing authority up for discussion.

In the Wake of the USA

This development has wide-ranging consequences also for Germany and the EU. As long as Riyadh and Abu Dhabi were clearly westward oriented, oil and gas were readily available from the Arab Gulf countries, also for Germany. German corporations could repeatedly land lucrative business deals at the Persian Gulf. Currently, German industry is interested in contracts for the emerging Megacity Neom, in which Saudi Arabia plans to invest a triple-digit billions of US dollars. Former CEO of the Siemens Group, Klaus Kleinfeld, had temporarily served as the head of the Neom project and as advisor to Saudi Crown Prince Muhammad bin Salman, the actual ruler of the Saudi kingdom.[11] Berlin has assigned Saudi Arabia an important role in Germany’s future supply of green hydrogen. It is unclear whether the German economy will play a major role for Riyadh in the future, when the Arab Gulf countries’ foreign policy priorities change. Last fall, the German government was noticeably unable to place large orders for natural gas from the United Arab Emirates.[12] It is uncertain, whether that was due to factual or rather wide-ranging foreign policy considerations.

Danger of Escalation

Experts point out that success or failure of the Saudi-Iranian rapprochement does not depend solely on those two states. Guido Steinberg, a Middle East expert of the Berlin-based German Institute for International and Security Affairs (SWP), notes that the deal could fall apart “if the Israeli government should decide ... to attack Iranian nuclear sites militarily.” In the event of an escalation of violence, for Riyadh, “the USA’s protection” “would appear more important than its new-found friendship with Iran.”[13] On the other hand, specialists in Washington are warning that Israeli air raids are now confronted with new difficulties. For these attacks, Israeli warplanes would have to cross through Saudi airspace. Following the conclusion of its deal with Iran, however, it is anybody’s guess whether Riyadh will grant that permission.


More on the subject: The End of US Domination at the Persian Gulf.


[1] See also Das pazifische Jahrhundert.

[2], [3] Guido Steinberg: Im Nahen Osten viel Neues. 22.03.2023.

[4] Dion Nissenbaum, Dov Lieber, Stephen Kalin: Saudi Arabia Seeks U.S. Security Pledges, Nuclear Help for Peace With Israel. 09.03.2023.

[5] See also Nachbarschaft in Flammen.

[6] See also The End of US Domination at the Persian Gulf

[7] UAE ambassador to Iran resumes duties after discussions between government officials. 21.08.2022.

[8] See also Das Ende der US-Dominanz am Persischen Golf (II).

[9] See also The End of US Domination at the Persian Gulf.

[10] How Beijing Helped Riyadh and Tehran Reach a Détente. 17.03.2023.

[11] Klaus Kleinfeld berät saudischen Kronprinzen. 03.07.2018.

[12] See also Energie deals mit Musterdiktaturen.