Iran and Saudi Arabia: Scenarios for Future Developments in Middle East


2016-03-11 By Risk Intelligence

Risk Intelligence


The two countries are already fighting proxy wars in Syria and Yemen.

In Syria, the Saudis are backing several of the rebel groups fighting Bashar al-Assad, who is receiving substantial support from Iran. This also, to some extent, applies to Iraq where Iran is supporting the Shia-dominated Iraqi government against the Islamic State (IS).

In Yemen, the Saudis have since early 2015 directly intervened in the ongoing conflict with ground forces, airpower and naval blockades on behalf of Yemeni president Abd-Rabbuh Mansur Hadi (internationally recognized as the legitimate political leader of Yemen) against the Iranian supported Houthi rebellion that began in February 2015.

Saudi Arabia is under pressure nationally to deflect attention from its economic situation – mainly a result of low oil prices – and to maintain its current standing within the region.

Iranian Naval Activity

Therefore, Saudi Arabia is trying to appease hardliners within its borders to prevent attacks on its own territory and to curb the number of its citizens, who might otherwise seek to join IS. The recent executions can therefore to be viewed through this prism and although Iran continuously demanded the release of al-Nimr, the execution was still carried out. AL-Nimr was not a particularly well-known Imam in Iran (mainly because he was not Iranian), but he was known for campaigning against Saudi Arabia’s treatment of the Shia population in Ahsa, the eastern province of Saudi Arabia.

A broadly accepted consensus, amongst many Iranians, is that the execution has more to do with the internal issues of Saudi Arabia, rather than explicitly targeting Iran.

That said, it must be stressed that the execution, whether deliberately or not, has affected their relationship for the worse, at a time when a better relationship is required most urgently in relation to the Syrian and Yemeni peace talks. Additionally, Iran fears that the broader effects of both the execution and the following attacks could detriment the fragile nuclear deal, the terms of which were only agreed late last year.

The agreement is key for Iran, as it includes the easing of international sanctions. The nuclear deal, which many Iranians, view as a success – and the direct result of Iranian president, Mr. Rouhani’s negotiations – because the easing of sanctions will help improve daily life. The execution of al-Nimr, has, therefore, created a diplomatic crisis, providing fuel for the hardliners but problems for Mr. Rouhani – a champion of peaceful methods compared to the hardliners.

In addition, the deal has generated fear in Riyadh that a major economic boost for Iran from increased trade will give them an edge on not only the previously mentioned proxy battlefields but also on Iran’s influence in the Middle East in general, thus creating a perceived need by Saudi Arabia to counter this new situation.

Current Situation

The outburst of anger between the two countries started on 2 January, following the execution of al-Nimr. Iran, having continuously demanded the release of al-Nimr, condemned the execution.

During the afternoon of 2 January, Iranian protesters and students from Tehran’s religious centers had gathered outside the Saudi embassy in Tehran, eventually attacking and ransacking the building entirely during the evening and night. The Iranian authorities universally condemned the ransacking of the embassy along with another attack on the Saudi Arabian consulate in Mashhad by protesters. Saudi Arabia’s response was to sever all diplomatic ties to Iran on the following day (3 January), giving the Iranian diplomatic delegation in Riyadh 48 hours to vacate the embassy.

On 4 January Saudi Arabia called on its allies in the region, Bahrain, Sudan and United Arab Emirates to follow suit on breaking ties to Iran, with Bahrain and Sudan cutting relations entirely, while the UAE downsized its diplomatic representation in Tehran by recalling its ambassador. Egypt and Kuwait, though both allies of Saudi Arabia, chose only to condemn the attack on the Saudi embassy. Djibouti and Qatar both recalled their ambassadors from Tehran on the evening of Wednesday 6 January.

Furthermore, Saudi Arabia threatened to impose travel and trade bans against Iranian citizens, which was answered by Iran banning all Saudi Arabian trade products. Turkey, major Sunni country, and otherwise in competition with Iran for power in the Middle East, offered diplomatic assistance, saying the crisis should be kept at a diplomatic level. On 7 January, Iran accused the Saudis of intentionally targeting the Iranian embassy in Sana’a, Yemen in an air raid amidst coalition strikes against Houthi targets in the city.

This has been denied by the Saudi led coalition, and unverified reports from witnesses and residents say that the embassy was not damaged in the 7 January strikes. These developments have led to concerns that the deterioration in relations between Saudi Arabia and Iran could result in a deteriorating security environment in the region or even outright conflict. The following sets out three possible future scenarios for the short term.

The probability of each of these scenarios is assessed on the following scale: unlikely (10-33% probability); about as likely as not (33-66%); likely (66-90%).

Future Scenarios

Continuation of Current Developments (likely)

From an Iranian point of view, the main concern is to seem sensible and non-aggressive, in order to keep the process of lifting sanctions against Iranian oil on track, as they prepare to double the production and sale of crude.

In that sense, Iran has a clear incentive; at least outwardly, to keep the situation from escalating, something Iranian political leaders seem to understand.

The current path could lead to increased tensions in the Ahsa province, which has been a flashpoint for religious division and violence for many years.

This is due to the perceived suppression of the Shiite majority by the Sunni authorities. Because the recent crisis is rooted in the execution of al-Nimr, the current narrative is laden with religion and sectarianism.

Moreover, Iranians could try to induce Shiites into escalating actions towards the Sunni-authorities, by playing on the sectarian tensions already present.

This escalation could also happen in Ahsa without any significant Iranian support, as the Shiite majority in the province are already agitated because of the mentioned perceived suppression. Activism, low-level attacks and unrest aimed at the Sunni authorities might increase because of this.

The most likely response, by the Saudis, would be to clamp down by various means.

However, no matter the Saudi response, there will be no notable regional consequences. In relation to maritime operations, the above scenario carries no direct increased risk.

The escalation described in this scenario focuses on activities that do not directly affect the sector.

In the event that the Iranian nuclear deal is implemented, the resultant easing of sanctions will in turn increase shipping activity. This will not only increase the trade and transport of oil, but commodities in general, especially into Iran.

The increase in imports and exports will further underline the importance for Iranian maintaining a stable maritime environment in the Persian Gulf.

However, worsening relations between Iran and Saudi Arabia will likely mean increased difficulties in negotiated resolutions to the conflicts in Syria and Yemen.

Escalation (About as Likely as Not)

The Iranians and Saudis could amplify their current bids in the different conflicts in which they are engaged. Iran could increase support for the Houthi rebels in Yemen, for example by stepping up arms supplies.

Because of this, the prospects of the peace talks on Yemen, expected to resume shortly, might suffer significantly because of the recent tensions. The Saudis can take similar actions in Syria, where the conflict pits Iranian proxies and IRGC members against Saudi Arabian-supported rebel groups. The Iranians might also consider activating their Hezbollah allies in Lebanon, encouraging them to escalate reprisals against Sunni sites and persons.

The recent events could potentially have dire consequences for the peace process in Syria where Saudi Arabia in October 2015 had agreed to let Iran to be a part of the UN-led peace process. Saudi Arabia may now use its influence in the UN-led peace talks on Syria, and freeze out Iran and Iranian-supported groups such as Hezbollah from participating in the negotiations.

This would be a severe blow to the peace process that had otherwise started to move forward, and had raised hopes of a negotiated peace in the not too distant future.

Without Iran included in the negotiations, any real progress would be hard to achieve, as Iran is a major player in the Syrian civil war, being a firm supporter of the Assad regime.

Increased political instability between the Saudis and Iranians and their associates in the region will most likely put any negotiation son hold as no solid peace deal can be brokered without these actors present.

Jihadi opportunism as a result of the tensions is another possibility. Groups such as al-Qaeda or IS could attack Shiites, soft targets and security forces in order to further destabilise the situation in Ahsa.

Attacks on Shiite communities, sites and mosques, has happened severalties in recent years, with the claimed IS bombing of a Shiite mosque on 22 May 2015 standing out as one of the most serious incidents.

Any attacks on the extensive Ahsa oil infrastructure is not likely in this scenario, as all installations are considered high priority sites and, as such, will be heavily guarded by Saudi security forces.

Therefore, any sabotage or attacks against the facilities are not a concern currently. In regards to maritime business, this scenario would not have a major direct impact.

Increasing Iranian or Saudi involvement in Syria or Yemen will probably primarily have direct effect on ground based operations and therefore only possibly indirectly impact port cities in Yemen, Syria and Saudi Arabia.

This is also true if the Saudis halt the Syrian peace process, as this will only affect the prospects for a solution, and will not change the dynamics of the battlespace. Jihadi opportunism may have an impact if it materializes.

Sites in port cities such as Dammam or Jubail could be targeted, influencing the overall terror threat level and attacks against Shiites could cause unrest or maybe even reprisals against Sunnis in general or the authorities specifically, increasing the risks of strikes, violence and activism.

Direct Confrontation (Unlikely)

This scenario envisages potential Iranian naval activity directed against Saudi shipping, as well as disrupting traffic to the Saudi Arabian eastern ports servicing the oil industry.

In case of any confrontation, the Iranian Revolutionary Guard Corps Navy (IRGCN) would be the main Iranian combatant rather than the regular Iranian Navy, as the Persian Gulf is designated as the IRGCN’s area of operations.

Any approaches or disruption would probably be conducted by fast attack craft, such as missile or torpedo boats and the threat of laying out mines in the Hormuz Strait – both tactics similar to the Iraq-Iran War Direct confrontations in the Persian Gulf or Strait of Hormuz would have an impact on international maritime shipping.

Harassment from the IRGCN and IRIN would in all probability be directed towards Saudi-flagged vessels although other vessels conducting trade with Saudi Arabia could be harassed or hit by mistake or as collateral damage.

However, this might still increase the overall insecurity in the area due to the Iranian military, and the Saudis would surely deploy their own naval assets to counter the Iranian presence, increasing the risk of escalation into a wider conflict.

This scenario is assessed as being unlikely as any provocation of this sort would be a clear escalation by Iran, which is not in its interests due to the upcoming lifting of sanctions.

Iran does not at present have sufficient interest in a potential escalation in its relations with Saudi Arabia to a possible naval confrontation in the Persian Gulf, even at a low level.


The likely scenario that the souring in relations between Saudi Arabia and Iran will continue at the diplomatic and commercial relations level at least in the short term.

This will have minimal impact on the regional maritime security environment, although broader security processes in Syria and Yemen will be affected. Indeed, some escalation in these areas is about as likely as not, perpetuating armed conflict (particularly in Yemen), which does have broader regional implications.

Internal security in Saudi Arabia might also be affected, increasing the likelihood of sectarian violence.

Direct naval conflict or even low-level harassment of commercial shipping in the Persian Gulf cannot be ruled out, but is assessed as unlikely. Iran has limited if any interests in escalating the conflict in this area and has a broader agenda that involves a re-setting of relations with the US and Europe (and the lifting of sanctions) and pursuing its strategic interests in, particularly, Iraq and Syria.

At the same time, Saudi Arabia does not have an interest in escalating the conflict any further or, if it where to happen, the capability of managing two armed conflict sat the same time.

This article was republished with permission of Risk Intelligence and is part of their latest issue of Strategic Insights, March 2016, Issue 62.

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