Recently, Iran and Saudi Arabia signed an agreement to resume diplomatic relations which were brokered by China.
Background (Tensions between Iran-Saudi Arabia)
The feud between Iran and Saudi Arabia is a struggle for regional dominance and religious supremacy.
The Middle East regional rivals, Iran and Saudi Arabia have had tense relationships since 2016.
Over the years both countries have supported proxies across the region, including in Lebanon, Syria, Iraq and Yemen.
Iran has supported Shia Houthi rebels in Yemen who forced out the Saudi-backed government in 2014, while Saudi Arabia has responded with a devastating air campaign against the Houthis since the following year.
In January 2016, Saudi Arabia cut its diplomatic ties with Iran after its embassy in Tehran was attacked by demonstrators following Riyadh's execution of a prominent Shia Muslim cleric.
In 2019, drones and missiles struck major Saudi Arabian oil facilities, which was blamed on Iran causing a further tense situation.
Previously, there have been many attempts to broker a peace deal between the two countries but without any success.
Key highlights of the Agreements
The agreement has been brokered by China.
According to the agreement, Iran and Saudi Arabia will resume diplomatic relations after 7 years and reopen embassies within two months.
The countries will also re-establish trade and security relations.
Impacts on the region
The agreement will complement the ongoing peace efforts in the region.
In September 2022, Israel, the US and UAE signed the Abraham Accords which paved the way for the resumption of trade and diplomatic relations between Israel and the UAE.
The latest agreement will lead to improved regional stability and security as well as increased cooperation among Persian Gulf nations.
Impacts on India
India has been walking tight a tightrope in balancing its ties with Iran and Saudi Arabia over the years.
Both of these countries are important for India for its trade, connectivity and energy security.
Normal trade and diplomatic relations between Iran and Saudi Arabia will provide India with an opportunity to increase its cooperation in the extended neighbourhood.