The Saudi Arabia-Iran Rivalry

In 2018, competition for primacy between Iran and Saudi Arabia will dominate the regional agenda. On the one hand, Iran's role in preventing the collapse of the Syrian regime, along with the defeat of the Islamic State (IS)'s caliphate project in Iraq and Syria, have bolstered its influence significantly. On the other hand, the fight against IS over the past three and half years has also coincided with the political ascendancy of Mohammed Bin Salman (MBS), Saudi Arabia's Crown Prince and de facto ruler. Under MBS, Saudi Arabia has assumed an aggressive foreign policy posture, similar to US President Donald Trump, which has been centred on opposing Iran's regional influence. This has manifested in Saudi Arabia's involvement in Yemen's civil war, pressure on Lebanon's Prime Minister to resign, and attempts to improve ties with Iraq. While Saudi Arabia has openly challenged Iran, albeit with limited success, Iran has been hesitant to date to intensify tensions beyond bellicose counter-rhetoric, calculating it has more to lose from further escalation. Moreover, a series of anti-government protests in January this year will likely compel the regime to focus on addressing dissent at home. Nevertheless, competition between the two will likely test the resilience of the Gulf Cooperation Council (GCC) and play out in other states across the region, including Iraq, Lebanon, Yemen and Sudan.

LEBANON 

The unexpected resignation of Lebanese Prime Minister, Saad Hariri, during a visit to Saudi Arabia in November 2017 was widely held to be a Saudi-led initiative to destabilise the Hezbollah-dominated government. Nevertheless, Hariri’s subsequent suspension of his resignation indicates that MBS overplayed his hand in his effort to counter Iran’s influence in Lebanese domestic politics. Iranian support for Hezbollah is therefore likely to continue in 2018, and Hezbollah is unlikely to make any meaningful concessions to Hariri or Saudi Arabia. However, while these allies will remain wary of MBS’s interventionist tendencies, a military Saudi-initiated offensive against Hezbollah is unlikely. Saudi Arabia is more likely to exploit Lebanon’s economic dependence on Riyadh, such as through halting foreign direct investment, pressuring Gulf businesspeople to withdraw investments, or expelling Lebanese expatriates from Gulf countries. Iran will struggle to mitigate these measures; however, the surge of domestic support for Hariri and Hezbollah significantly reduces the effectiveness of such economic pressure.

NORTH AFRICA 

The regional dispute is also gaining traction within North Africa. At the end of 2017, tensions between Sudan and Egypt had escalated significantly as the two countries came to loggerheads over the disputed territory of the Halayeb Triangle, and their different approaches to the Grand Ethiopian Renaissance Dam (GERD). However, it was Turkish President Recep Tayyip Erdoğan’s December 2017 visit to Khartoum, and the subsequent agreement for Turkey to lease Sudan’s Suakin Red Sea Island, that placed the diplomatic spat at a knife’s edge. Turkish media has since claimed that Egypt had deployed troops to Eritrea. Although these reports have been denied by Eritrea and Egypt, by mid January 2018, Sudan had reciprocated by deploying troops along its Eritrean border. The deal regarding Suakin, in particular, has raised concerns that Turkey will look to establish a military presence on the island. With Sudan set to back Turkey and Iran while Egypt seems ever ready to grow ties with Saudi Arabia, the two North African neighbours are likely to drift further apart in the coming year. While an imminent outbreak of conflict is unlikely, the spat is expected to continue, with parties trading allegations of increased aggression. In the interim, additional troop deployments are anticipated and it is unlikely that a concrete resolution will be secured before Egypt’s presidential elections scheduled for March 2018.

IRAQ 

Recognising Iraqi Prime Minister Haider Al Abadi’s urgency for post-conflict reconstruction – particularly after the defeat of IS and Kurdistan’s independence aspirations in 2017 – Saudi Arabia has indicated that it plans to bolster trade and diplomatic relations with the country in 2018. This is a key aspect of MBS’s plan to counter Iranian influence in Iraq. Riyadh has also sought to establish ties with prominent Shi’a cleric, Muqtada Al Sadr, who opposes Iranian interference in Iraq. While these developments are unlikely to diminish Iran’s vast influence in the country, in the event of significant rapprochement between Iraq and Saudi Arabia, the risk of an insurrection by Iran-backed Shi’a militias, many of whom are loyal to former prime minister and Iranian ally, Nouri Al Maliki, will increase. These tensions could also manifest in violence in the May 2018 parliamentary elections, in which Abadi, his fellow party member but rival, Maliki and Sadr are expected to participate.

QATAR 

Following Saudi Arabia and its Gulf allies’ severance of diplomatic ties with Qatar in June 2017, the blockading countries presented several demands to the emirate, including the scaling down of diplomatic relations with Iran. However, despite facing the prospect of international isolation, Qatar instead expanded diplomatic and economic relations with Iran. Qatar’s success in limiting the economic impact of the blockade – partly due to increased trade links with Iran and Turkey – and consequent refusal to give in to Saudi demands, means that the dispute is expected to continue in 2018. Saudi Arabia will likely try to further ostracise Qatar regionally, and in turn further divide the GCC. The potential ousting of Qatar from the GCC could not only lead to a collapse of the organisation, but also serve as a major strategic gain for Iran.

YEMEN 

Saudi Arabia and Iran continued to back opposing sides in the Yemeni civil war in 2017, further exacerbating the conflict. The US and Saudi Arabia remain adamant that Iran has supplied weapons to Houthi militants, including long-range missiles that were used to target Riyadh in November and December; however, Iran denies these accusations. In turn, Saudi Arabia has intensified its airstrike campaign against Houthi positions in the capital, Sana’a. The collapse of an alliance between former Yemeni President, Ali Abdullah Saleh, and the Houthis, as well as Saleh’s subsequent assassination, has prompted a further escalation of the conflict. Fighting and airstrikes are expected to continue in 2018, as warring factions have shown no inclination to pursue dialogue. With little political will by Saudi Arabia and Iran to support political reconciliation, Yemen is expected to remain politically, militarily and economically unstable throughout the year ahead.