Iran nuclear deal: Why the Gulf Arab states are offering a sweetener


Six years after denouncing the Iran nuclear deal, Arab Gulf states are encouraging their regional rival to return to the deal and are embarking on a separate diplomatic campaign to pressure Tehran to drop both its nuclear pursuit and its interference in the Arab States. Indeed, the Gulf states believe they have the most to offer Iran to induce compromise.

Behind their shift in mentality lie the perceived failure of the US policy of “maximum pressure” on Iran, an all-consuming war in Yemen, and concerns that continued instability not only threatens the national security of the Gulf states, but be bad for business.

Why we wrote this

For many reasons, the Gulf Arab states have radically changed their view of Iran. Suddenly they might have the most to offer Tehran to help broker a nuclear deal.

Gulf states’ consensus list of Iran’s demands include de-escalation of Sunni-Shia bigotry, an end to Iran’s supply of ballistic missiles to its militia proxies and a halt to its quest for uranium military grade.

In return, the Gulf States offer an assortment of relief measures and trade and investment opportunities that could lead to the rapid influx of tens of billions of dollars into economically devastated Iran, with potentially hundreds of billion more in the long run.

“What the Gulf Arab states want and what they can deliver is well known,” says Emirati political analyst Abdulkhaleq Abdulla. “At the end of the day, the important question is: what does Iran expect from us?”

Amman, Jordan

As talks progress in Vienna between the West and Iran on reviving agreements restricting Iran’s nuclear program, a breakthrough could come from an unlikely place: the Arab Gulf states.

Six years after denouncing the nuclear deal negotiated under the Obama administration for failing to address Iran’s activities in the region, states are encouraging Tehran to return to the Joint Comprehensive Plan of Action (JCPOA).

To do this, states, some of which like Saudi Arabia have fought proxy wars with Iran, are embarking on a separate diplomatic campaign to get Tehran to drop both its nuclear pursuit and what they see as its interference in Arab states.

Why we wrote this

For many reasons, the Gulf Arab states have radically changed their view of Iran. Suddenly they might have the most to offer Tehran to help broker a nuclear deal.

In their push for regional dialogue and cooperation, the Gulf Arab states believe they have the most to offer Iran to induce the hardline government to compromise at the negotiating table.

Behind the shift in the Gulf Arabs lie several considerations: the perceived failure of the Trump administration’s “maximum pressure” policy on Iran, with which the Gulf states were aligned; an all-consuming war in Yemen; and concerns that continued insecurity and the risk of conflict not only threaten the national security of Gulf states, but also harm business.

But the transformation of states from resisters to nuclear talks into active participants was also made possible, according to Gulf insiders and analysts, by the fact that this time around the United States included them in the process.

Being briefed by the Biden administration and the Europeans allowed the Gulf states to be safe in pursuing their own dialogue with Iran to cover areas that a nuclear deal could not cover.

The Gulf states say they have consensual demands for Iran: the immediate de-escalation of Sunni-Shia sectarianism; end the supply of ballistic missiles to its militia proxies; curb its interference in the internal affairs of Arab states; and halting its quest for weapons-grade uranium.

In return, the Gulf States offer an assortment of economic and financial relief measures, as well as trade and investment opportunities, which could lead to the rapid influx of tens of billions of dollars into economically devastated Iran, with hundreds of billions of dollars in the long term. – term potential.

“What the Gulf Arab states want and what they can deliver is well known,” says Emirati political analyst Abdulkhaleq Abdulla. “At the end of the day, the important question is: what does Iran expect from us?”

Diplomatic whirlwind

The flurry of diplomatic activity between the Gulf countries and Iran has accelerated as talks between the international community and Iran progress in fits and starts in Vienna.

On Monday, the Iranian foreign minister noted “good progress” in Vienna thanks to “efforts by all parties to reach a stable agreement”.

While the United States has welcomed “modest progress”, it continues to push for a strict deadline to return to the agreement within “weeks”, in order to prevent Iran from reaching a threshold of capacity to produce a nuclear weapon from sufficiently enriched uranium.

The Iranian government refuses to impose deadlines or an interim agreement.

Hassan Saleh, a Yemeni fighter backed by the Saudi Arabia-led coalition, following clashes with Iran-backed Houthi rebels on the Kassara frontline near the oil-rich town of Marib, in Yemen, June 20, 2021.

Yet the talks between Iran and the Gulf Arab states are blossoming:

  • Iranian-Saudi talks for a rapprochement enter their fifth round in Iraq next week.
  • On Monday, as part of a tour of the Gulf, Iranian Foreign Minister Hossein Amirabdollahian arrived in Muscat to discuss regional de-escalation with Oman, a traditional mediator between Tehran and Washington. Separate Qatar-Iran talks are ongoing.
  • In December, the UAE national security adviser visited Tehran and met with Iranian President Ebrahim Raisi.

Economic opportunity

For Iran, the financial and economic opportunities in the Gulf are unparalleled.

Dubai is an important export hub for Iran, a vital lifeline for the global economy amid financial and trade sanctions. The UAE is currently Iran’s second largest trading partner with $16 billion in trade in 2021, a figure that is expected to reach $18-20 billion this year.

“The UAE and the Gulf countries can offer a lot to Iran, which economically needs a lot of tangible things that the Gulf can provide. We can increase trade, we can ease financial restrictions, we can trade goods that he desperately needs,” says Dr Abdulla, the Emirati analyst.

Access to Saudi Arabia, the largest single market in the Arab world with a GDP of $782 billion, would also be an immediate boon to Iranian exports.

Other potential benefits for Iran include:

  • The exploration and extraction of natural gas from concessions that have been blocked in legal disputes between Iran and a company based in the United Arab Emirates.
  • Sharing Gulf know-how that could help Iran’s oil industry.
  • Improved COVID-19 response: United Arab Emirates and Oman shipped medical supplies and conducted humanitarian flights to Iran in 2020; The Gulf States would now offer increased assistance and aid to Iran’s medical sector, pharmaceutical sector and hospitals.

Moreover, Gulf Arab diplomats say they believe they can offer something intangible that Iran needs: respect as a regional player and an end to isolation in its own neighborhood.

Increased cost of conflict

The shift in Gulf states’ stance also follows a six-year period in which military action against the Iran-backed Houthis in Yemen and a breakdown in diplomatic ties did little to weaken the position of the Iran.

Instead, from Syria to Iraq and Lebanon, Iran has become more entrenched and emboldened, its militias becoming battle hardened.

“Marginal gains for the conflict as a whole have diminished, particularly after the COVID-19 shock affected regional budgets,” says Dania Thafer, executive director of the Gulf International Forum.

“The increased cost of maintaining the conflict combined with the perceived US disengagement from the region is a strong signal for the Gulf States to continue dialogue to find a new security agreement,” she adds.

The Gulf Arab countries’ negotiating position with Iran is limited by a harsh reality: they also need Iran.

The UAE and Saudi Arabia in particular want Tehran to pressure the Houthis in Yemen to commit to a ceasefire and dialogue to end the Saudi-led war in Yemen, according to Gulf diplomatic sources.

In addition, Riyadh and, to a lesser extent, Abu Dhabi are concerned about the continued dominance of Hezbollah’s Iranian proxy over Lebanese state politics and institutions. They also compete with Iran for influence in Iraq and Syria.

Then there is the prospect of armed conflict between the United States or Israel on the one hand and Iran on the other. The United Arab Emirates and Oman are directly in the path of the missiles; Abu Dhabi fears that instability and conflict will sink its globalized, service-based economy, which depends on the free movement of people and finance.

There is also an inherent time limit to talks between Saudi Arabia and the wider Gulf: if the JCPOA is revived and sanctions lifted first, the Gulf states will lose much of their bargaining power with Tehran, according to analysts.

Despite the limitations, Gulf diplomats say their offer of economic opportunities is the best deal Iran can get and would be a huge boon for Tehran. It remains to be seen how Iran will react.

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