Executive Summary

• The Iran-Saudi dialogue is set to resume in the coming weeks following visits by Prime Minister Mustafa al-Kadhimi to Saudi Arabia and Iran. In a sign of progress, Iranian officials signaled a willingness to restore ambassadorial ties while the Saudi side reportedly signaled intent to upgrade the level of diplomatic engagements.
• The dialogue is a positive indicator yet remains primarily symbolic, with tangible progress limited. With a truce in Yemen remaining in effect since April, conditions are arguably favorable for a more constructive Saudi Iranian relationship moving forward.

Between 25 and 26 June, Iraqi Prime Minister Mustafa al-Kadhimi embarked on a short regional tour with stops in Jeddah, Saudi Arabia and Tehran in a bid to further the previously stalled Iran-Saudi dialogue. Following a short visit to Saudi Arabia on 25 June, where he met with Crown Prince Mohammed Bin Salman and other senior Saudi officials, Kadhimi arrived in Tehran the next day to meet with President Ibrahim Raisi and Foreign Minister Hossein Amirabdollahian.

Whereas official Saudi readouts were characteristically vague and devoid of significant details, statements by Iranian officials noted some progress towards resuming the negotiations and possibly restoring ambassadorial relations. According to an official readout following his meeting with PM Kadhimi, Foreign Minister Abdollahian said Iran “wants nothing but good for the region and supports the reopening of embassies in the capitals between the two countries.” Foreign Ministry spokesperson Saeed Khatizadeh said later during the week that Kadhimi carried a message from the Saudi side, expressing their readiness to upgrade the level of negotiations from security to a diplomatic level.

The statement can be seen as a small but significant sign from Saudi Arabia indicating readiness to expand the level of engagement with Iran, which has thus far been spearheaded by members of the Saudi intelligence and security agencies. By contrast, the Iranian delegation has reportedly involved both diplomatic and security officials. Local reports citing Iranian sources also claimed the Iranian side is pushing to move the dialogue from purely security-related matters to a political phase, with meetings reportedly being discussed involving the two sides’ foreign ministers. The same reports indicate that the Saudi side remains reluctant and has conditioned further diplomatic engagements on further progress for critical security issues. Details remain limited, but this presumably involves greater Iranian involvement in the Yemen conflict and Saudi demands for Iran to exercise greater leverage on the Houthi Movement.

Dialogue symbolic step towards reducing overall tensions

As previously discussed in Talos’ Regional coverage, the Iran-Saudi dialogue remains a positive albeit predominantly symbolic development that has so far failed to produce tangible results beyond minor diplomatic engagements. Last year, Saudi Arabia agreed to allow Iranian diplomats into the country to attend meetings at the Organization for Islamic Cooperation (OIC) and earlier this year Iraqi officials said the two sides agreed to a ten-point memorandum of understanding to enhance cooperation on bilateral and security-related matters. With a truce in Yemen remaining in effect since April, conditions are arguably favorable for a more constructive Saudi Iranian relationship moving forward and the dialogue appears set to be resumed in the near term.

It remains to be seen however if further talks will produce the sort of diplomatic breakthrough that has been rumored since the start of negotiations in early 2021. Both sides maintain a cautious approach and reiterate expectations that progress is conditional on practical steps related to various regional issues, including Yemen, Lebanon, and allegations of domestic interference for Shia and Sunni separatist groups. More broadly, US-led efforts to forge greater security cooperation between Israel and Arab states against Iran form another risk escalation indicator that may complicate further engagements. The upcoming visit by President Biden to Israel and Saudi Arabia in mid-July – and the anticipated summit presided over by the president in late July – is being reported in Tehran as an attempt to create an anti-Iranian alliance. These developments and associated tensions likely to arise in connection with the summit may understandably complicate further constructive engagements between the two rivals.