Saudi-Iran detente offers dubious economic benefits, say analysts

Analysis

Jack Dutton

Jun 18, 2023

Iranian embassy — Iran's Deputy Foreign Minister for Consular Affairs Alireza Bigdeli (R), Director of Consular Affairs at the Saudi Ministry of Foreign Affairs Ali al-Youssef (C) and head of consular affairs in the Iranian Embassy Hassan Zarnegar attend the official ceremony of the reopening of the Iranian Embassy in Riyadh, June 6, 2023. — FAYEZ NURELDINE/AFP via Getty Images

Saudi Investment Minister Khalid al-Fatih claims he is “optimistic” about the economic potential of the detente announced March 10 between Saudi Arabia and Iran, brokered by China.

In an interview with CNBC earlier this week, the minister said he was “very hopeful” that Saudi Arabia’s normalization with Iran will go beyond the two countries and address the concerns the international community has expressed to Tehran.

Fatih said that Saudi enterprises could also help the Iranian market "catch up" from the periods of closure and sanctions. He said “it’s to our advantage on all fronts” to see Iran and Saudi Arabia — longtime foes in the region perennially locked in proxy conflicts — agree to normalize ties. Iran wants to reach $1 billion in annual bilateral trade with Saudi Arabia in the short term and $2 billion in the medium term, an ambitious goal given US sanctions.

'Dangling the carrot'