Country Risk

Will Mideast Gulf States Invest in Iran?

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  • An invitation by Saudi King Salman to Iran's President Ebrahim Raisi to visit Riyadh suggests a China-mediated pact to restore ties is gaining momentum.
  • Improved Iran-Saudi relations could pave the way for broader regional reconciliation and new economic opportunities.
  • But the threat of US sanctions, absent a revived nuclear deal, makes any meaningful investments in Iran by Mideast Gulf states unlikely anytime soon.

On the surface at least, Iran and Saudi Arabia have not wasted time taking advantage of the China-brokered deal struck on Mar. 10 that aims to reconcile the regional archrivals. Less 10 days after the surprise announcement that Riyadh and Tehran would restore diplomatic relations and reopen their embassies within two months, King Salman reportedly issued an invitation to President Raisi to visit Riyadh — a signal that bilateral engagement might gather momentum faster than many had anticipated.

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