The Big Picture: Mideast Rapprochement Could Wax and Wane

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• Ongoing indirect talks between the US and Iran in Vienna and news of Saudi Arabia-Iran talks in Baghdad point to de-escalation in the region, after a period of elevated tension. • But any lasting resolution is unlikely. Saudi-Iranian rivalry will continue to threaten renewed tensions, distrust between Tehran and Washington will remain deep, Israel will continue to make its own moves, and Iran will carry on backing its proxy forces from Iraq to Lebanon. News that Saudi Arabia and Iran held direct talks earlier this month suggested that sentiment is shifting in the region, for now. The US and Iran appear to be making progress on their return to the terms of the 2015 Iran nuclear deal. Saudi Arabia tried, but failed, to get a seat at the table in these talks, which it was keen to see address Iran’s missile program. With the kingdom being pummeled by attacks from Iran-backed Houthi rebels in Yemen, the next best thing -- the reasoning may have been -- was to get something out of the US-Iran rapprochement by talking to Tehran directly. For Saudi Arabia, this is likely about limiting losses and making some immediate gains, rather than any fundamental reorientation toward learning to “share the neighborhood” with its archrival -- as former President Barack Obama in 2016 pressed Saudi Arabia and Iran to do. This has involved some deft positioning, as Saudi Arabia simultaneously supported the presumed Israeli attack on Natanz, seemingly aimed at derailing US-Iran talks. But there is also a degree of consistency about the Saudi position. If the direction of travel is toward de-escalation, the kingdom had to move, too. Riyadh stands to benefit if it can secure a modicum of peace in Yemen, where the war is draining the Saudi budget and feeding anti-Saudi sentiment in Washington. Saudi Arabia is already conducting back-channel talks with the Houthis via Omani mediation (EC Apr.2'21). A Gulf-based source said the "tension-easing talks" in Baghdad are aimed at limiting Iran's "interference" in planned investment projects in Iraq, including, possibly, the Akkas gas field (related). Iran framed the goal of any talks more broadly, while not confirming them. Critically, the trend toward de-escalation in the region could prove ephemeral. The US’ 2018 exit from the Iran nuclear deal under former US President Donald Trump showed how quickly Washington can reverse course. Should the Biden administration agree a re-entry to the Joint Comprehensive Plan of Action (JCPOA), as the Iran nuclear agreement is known, a Republican win in 2024 could undo this -- and create another cycle of volatility (EC Dec.4'20). Moreover, any resolution in Yemen would do nothing to resolve the underlying tensions between Riyadh and Tehran. However expedient the Houthis have proved to be for Iran, Yemen is less strategically (and historically) important for Tehran than maintaining its so-called Shiite arc in the region, across Iraq, Syria and Lebanon. Iran's broad proxy footprint, and its demonstrated missile and drone capacity, mean Saudi Arabia’s deep suspicion of revolutionary Iran will persist. In short, even if Tehran’s nuclear capabilities are addressed by a revived JCPOA, there is no shortage of issues to fuel Saudi concerns and keep tensions between the two simmering away, even in a best-case scenario. Deep Mistrust Similarly, a lasting breakthrough in US-Iranian relations seems unlikely. Beyond any immediate revival of the existing JCPOA, the Biden administration would struggle to achieve its stated wish of a “longer and stronger” nuclear deal with Iran, along with related agreements covering other areas of concern, such as Iran’s ballistic missile program and its regional behavior. Polarized US politics present one challenge, with successive Republican and Democratic administrations flipping 180° on key positions, including the Iran nuclear deal. Iran presents another: Tehran already has little faith in Washington’s ability to stick with any return to the existing nuclear deal and fulfil its commitments by lifting sanctions (EC Apr.16'21). As such, it lacks any incentive to sign up to tighter or longer constraints on its nuclear program, barring some form of permanent sanctions relief by the US -- which the US has told Iran it cannot guarantee (IOD Apr.21'21). Both the US president and Congress have broad remit to enact or legislate sanctions. Likewise, Iran has nothing to gain from agreeing to constrain its missile program or its regional proxy forces, particularly while US ally Israel continues to target Iranian proxy positions in the region, particularly Syria, and Iran’s nuclear facilities and scientists. The regional contest that underpins this would remain. And any idea of true de-escalation -- with, for example, Israel or Gulf Arab states agreeing to reciprocal limits on military capacity -- seems fanciful. The consensus among senior geopolitical and energy experts on Energy Intelligence's International Advisory Committee, who met this week, was that Iranian mistrust of the US remains extremely high. The sense in Iran is that the US deceived it from the start, and that the JCPOA was a plan to reduce Iran’s capabilities. From agreeing the nuclear deal in July 2015 to implementing it in January 2016, Iran gave up a big chunk of its nuclear assets, but received little in return. It was then “rewarded” with an overwhelming set of sanctions following Trump’s 2018 exit. That experience underpinned Iran’s initial negotiating position that the US had to move first to suspend sanctions, and then "verify" that the relief worked -- that is, that Tehran could sell oil, receive payment, arrange insurance for its tankers, and access ports -- ahead of Iran's own steps to move into nuclear compliance. But a US official said Wednesday that negotiations are now focused on "full compliance for full compliance." The Biden administration has also said it will address all US sanctions that inhibit trade and investment allowed under the JCPOA (related). This is aimed at breaking down the "sanctions wall" the Trump administration built after its JCPOA exit to complicate US re-entry to the deal. Enduring Rivalry Progress in Vienna is notable, but a lot could still go wrong in the near- or longer-term. Talks could break down over any number of finer, technical points. The strike on Natanz shows that Israel remains strongly opposed to the process. And Iran’s move to 60% uranium enrichment could invite further action. If the talks fail, Tehran will have reason to lash out, an emboldened Riyadh will have less incentive to engage with Tehran, and the escalation game could resume. Even if they succeed, it’s hard to see any real resolution of deeply ingrained rivalries across the region. Jill Junnola, London

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