Iran-Saudi Arabia tensions will increase instability

Analysis

Iran and Saudi Arabia are playing out a battle for regional supremacy via proxy conflicts around the Middle East (see SAUDI ARABIA: Focus on Iran risks new instability - March 24, 2016).

Relations have deteriorated in the past year, resulting in the latest war of words, which has been laced with both sectarian and political abuse. During the 2015 hajj, 472 Iranians were among around 2,000 people killed in a stampede, for which Iran held the Saudi authorities responsible.

Then, in January, a leading Saudi Shi'a cleric, Sheikh Nimr al-Nimr, was convicted on terrorism charges and executed. Rioters sacked the Saudi embassy in Tehran, prompting Riyadh to cut diplomatic ties.

However, the roots of the enmity are older.

Relations between Tehran and Riyadh have been troubled since the 1979 revolution that toppled the Shah and led to the establishment of the Islamic Republic of Iran. The declared intention of the latter to export the Shi'a revolution alarmed Gulf Arab states, especially Saudi Arabia and Bahrain, which contain sizeable indigenous Shi'a communities.

Tensions rose during the 1980-88 Iran-Iraq war, when Iranian forces attacked Saudi oil tankers. Consequent clashes between Saudi security forces and Iranian pilgrims during the 1987 hajj led to the death of at least 400 Iranians.

Iran in Iraq

The strong Iranian political and military influence established in Iraq after the 2003 US invasion prompted Saudi fears of a regional rebalancing in Iran's favour. Relations with Baghdad subsequently deteriorated.

The kingdom recently reopened its embassy in Iraq, but ties will remain strained given the ongoing dominance of the majority Shi'a community in government. Saudi Arabia has spoken out in support of Iraq's marginalised Sunni community, but has been unable to take direct action, despite efforts to mobilise the tribes.

In particular, Saudi leaders are critical of the prominent role played by the Popular Mobilisation Units (PMUs), a coalition of Iran-backed Shi'a militias, in the battles against ISG in Sunni-dominated areas. This issue will re-emerge in the upcoming Mosul offensive (see IRAQ: Stabilising Mosul could take years - September 1, 2016).

Syrian conflict

The brutal crackdown on anti-government protests in Syria, which began in 2011, prompted Saudi Arabia to become the leading Arab critic of both President Bashar al-Assad and his Iranian backers. The kingdom supports armed opposition groups, financing the rebels' supply of weapons through Jordan and Turkey.

Riyadh's fear of expanding Iranian influence means that this is likely to continue as long as Tehran, directly and through its client Shi'a militias, continues to provide military, financial and political support to Damascus.

However, Saudi Arabia's ability to influence international action against Syria has diminished significantly because of the Russian military intervention and the dominant diplomatic role assumed by Moscow over the conflict.

While Russian aircraft operate over Syria, Moscow depends on Iranian forces and Shi'a militias directed by Tehran to back the Syrian army on the ground. This has led to close ties between Russia and Iran, which Saudi Arabia is powerless to counter.

Yemen quagmire

The proxy conflict has also played out in Yemen. In March 2015, Saudi Arabia, at the head of a loose Arab coalition, launched a military campaign in response to a successful uprising against the Yemeni government by the Shi'a Huthis.

Saudi Arabia has consistently accused Iran of backing and arming the Huthis, and sees the rebellion as a further sign of Iran's determination to destabilise Arab countries. Iran has denied direct involvement, but has expressed support for the Huthis.

While the Saudis claim success in preventing a perceived Huthi/Iranian takeover of Yemen, they have become bogged down in a war neither side is likely to win or lose (see YEMEN: Rival governments risk permanent division - September 7, 2016). To pull out while major Yemeni cities, including the capital, Sana'a, remain in rebel hands would, for Riyadh, be tantamount to admitting an Iranian victory.

Regional/international alliances

To bolster the stability of Sunni states against perceived Iranian/Shi'a expansionism, Saudi Arabia has sought to form an unofficial alliance, bringing together the Gulf Arab states, Egypt, Jordan and Turkey.

However, July's failed coup attempt in Turkey, and President Recep Tayyip Erdogan's subsequent embrace of both Russia and Iran -- the main backers of the Assad regime -- may remove one of the major partners (see GULF STATES: Turkey crisis will weaken Sunni coalition - July 28, 2016).

Saudi fears have been heightened since its superpower ally, the United States, indicated its intention to limit its future commitment to the Middle East, while encouraging the international community to re-engage with Iran following the nuclear deal.

Iran, conversely, is developing closer ties with Russia, a superpower which is seeking to expand its influence and presence in the region. Military and energy-sector cooperation between the two countries is increasing.

In general, Iran's active regional strategy since the 1980s has given it an advantage over Saudi Arabia (see IRAN: Military set for more aggressive stance in Gulf - July 29, 2016). It has deployed its own military and civilian personnel in Iraq and Syria, and cultivated Shi'a militias and indigenous communities in Arab states.

By contrast, Saudi Arabia's activist approach in the region is relatively recent -- it was implemented only after the succession of King Salman to the throne in early 2015 -- and has had limited success.

Both sides claim they are prepared to open a dialogue, but this is unlikely given the gulf between their positions. Saudi Arabia says that Iran must first end its policy of regional interference, while Iran argues that it is pursuing legitimate interests in the Middle East.