Saudi-Iran deal shows how US sanctions strategy backfired, experts say
The agreement reached between Saudi Arabia and Iran this month is the culmination of a year-long attempt at rapprochement, and shows how the US strategy of sanctions on countries like Iran has backfired, experts said Thursday.
In the agreement signed earlier this month, the two countries agreed to reopen their embassies and missions on each other’s soil within two months and committed to non-interference in each other’s internal affairs, according to a joint statement issued with China.
The deal ended nearly 10 years of no diplomatic relations after Saudi Arabia cut ties with Iran in 2016 over Iran’s sharp criticism of Riyadh’s order to execute Shia cleric Nimr al-Nimr.
Kristian Coates Ulrichsen, a Middle East fellow at Rice University’s Baker Institute for Public Policy, said that while the timing of the agreement came as a surprise, Riyadh and Tehran had been working toward restoring relations for several years.
Ulrichsen said the Saudi push came as a result of a lesson learned after former US President Donald Trump’s “maximum pressure” campaign, in which the US reimposed broad sanctions on Iran as it pulled out of the 2015 nuclear deal it signed. Washington. , Tehran, and world powers.
Although Saudi Crown Prince Mohammed bin Salman called on the United States to put more pressure on Iran, in 2019 the kingdom’s oil facilities were attacked with a drone strike blamed on Tehran. The attack resulted in a 50 percent drop in Saudi oil production.
“Donald Trump said this is an attack on Saudi Arabia that is not on us. He was distinguishing between the interests of the United States and their interests,” Ulrichsen said during an online webinar Thursday hosted by the Washington DC Arab Center.
“You saw the Saudis suddenly realizing that they had to adopt a set of policies that reflected their own interests,” he said.
US must ‘rethink approach’
In the case of Iran, US sanctions have had a more direct impact on Tehran’s willingness to seek other outlets and paths outside the reach of the American financial system.
Since Washington reimposed sanctions on Iran, they have had a devastating effect on the economy, including stagnant inflation, devaluation of Iranian rule, and a shrinking Global Domestic Product (GDP).
Days after the deal was announced, Saudi Arabia’s finance minister said Riyadh could start investing in Iran “very quickly”.
“[The deal] allows Iran to turn to the West, the US and its allies – and say: ‘Look, in the end you won’t be able to isolate me the way you did before the nuclear deal’,” Dina Esfandiary, senior adviser to the Middle East and North Africa for the International Crisis Group, during the online seminar.
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The US dollar has dominated the international market for many years and is a major constraint on international finance in investment, financing and trade.
Because of that dominance, the US used a policy of sanctions against its enemies, from launching an embargo on Cuba in 1962 and sanctions on the government of Saddam Hussein in Iraq and imposing sanctions on Iran and Syria.
Russia is the latest country to face massive US sanctions, blacklisted by Washington after it invaded Ukraine last year.
However, experts say that the sanctions policy has proven ineffective, especially in recent years, as China has emerged as an equal rival to the US in the international financial market. Saudi Arabia, for example, was reportedly considering pricing some of its oil sales to China in yuan.
“I would like to suggest that it means that the United States needs to rethink its approach, especially with regard to the use of economic sanctions, which I think are becoming more and more,” said Barbara Slavin, a member at large to be held at the Stimson Center.
“We have to make sure that we maintain ties not only with the countries in the region, but also with the Chinese to make sure that we are not putting ourselves in a situation where we are not able to broker agreements among the elites.”