Iran invites Saudi king to visit Tehran

Reuters/Bandar Algaloud

• Meeting could mark end of hostilities between countries
• Iran’s exports to Saudi highest since 2016 dispute began
• International sanctions against Iran still in place

Iran has invited Saudi Arabia’s king to visit the country after the regional rivals agreed to end years of hostility following a China-brokered agreement in March.

King Salman bin Abdulaziz Al Saud was officially invited to Tehran, the Iranian Foreign Ministry said in a TV news conference, Reuters reported.

The talks in Beijing followed by a forthcoming visit herald the end of hostilities between the two Middle East powers, which have simmered since Saudi Arabia cut ties with Iran in 2016 after its embassy in Tehran was stormed amid a dispute over Riyadh’s execution of a Shi’ite Muslim cleric.

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The agreement, signed by Iran’s top security official, Ali Shamkhani, and Saudi Arabian national security adviser Musaed bin Mohammed Al-Aiban, re-activates a 2001 security cooperation accord, as well as another earlier pact on trade, economy and investment.

Iran’s exports to Saudi Arabia reached $14.71 million from the Iranian New Year that fell on March 21 2022, to November 1 last year – a record high since 2016 and up from $42,000 in 2021, according to the Iranian state news agency.

Saudi finance minister Mohammed Al Jadaan said the kingdom’s investments into Iran could happen “very quickly” following the easing of tensions.

“There are a lot of opportunities for Saudi investments in Iran. We don’t see impediments as long as the terms of any agreement would be respected,” Al Jadaan told a conference in Riyadh in March.

Yet Scott Livermore, chief economist at Oxford Economics Middle East, told AGBI: “the direct economic impacts are limited as international sanctions against Iran are still in place.

“However, improved Saudi-Iran relations lower one of the main geopolitical risks facing the region and this could be beneficial for the overall investment climate.”

Justin Alexander, director of Khalij Economics and Gulf analyst for GlobalSource Partners, said: “The immediate economic impact will be minimal, with the most notable element likely to be an increase in religious tourism from Iran to Saudi Arabia.

“Longer term, if US sanctions are lifted and trust is restored, Iran could benefit considerably from trade and investment with Saudi and other Gulf states.”

Tensions between the two countries had threatened stability and security in the Gulf and helped fuel conflicts in the Middle East, from Yemen to Syria.

Fellow Gulf states the UAE, Oman, Qatar, Bahrain and Kuwait welcomed restored Saudi-Iranian ties, as did Iraq, Egypt and Turkey.