Saudis Offer To Invest In Sanctioned Iranian Economy To Deescalate Gaza Tensions

Saudi Arabia has for the past month been directly engaging Iran on the Gaza issue, a half-year after the longtime rivals restored official relations in a China-brokered agreement. Prior to that, a decade-long proxy war had raged, chiefly centered on Syria, where Saudi Arabia and its partners backed al-Qaeda groups in an effort to topple Iran-aligned President Bashar al-Assad.

But the potential for major regional conflict has returned in light of the Israel-Hamas war, and Tehran is seen as a key backer of Palestinian Islamist factions now holding Israeli and foreign captives hostage.

On Wednesday, Bloomberg reports the major development that “Saudi Arabia has approached Iran with an offer to boost cooperation and invest in its sanctions-stricken economy if the Islamic Republic stops its regional proxies from turning the Israel-Hamas war into a wider conflict.”

It was only this month that Iranian President Ebrahim Raisi and Saudi Crown Prince Mohammed Bin Salman met in person for the first time, after the restoration of diplomatic ties, during a summit in Riyadh which focused on addressing the Gaza war.

Bloomberg continues, “The proposal has been delivered directly and through multiple means since Hamas’s attack on Israel last month and the ensuing war in Gaza, according to Arab and Western officials familiar with the matter.”

Hamas is widely believed to be funded and trained by Iran, and prior to the Syria war even had an official office in Damascus (after 2012, Hamas had joined the anti-Assad jihadist insurgents), and so Tehran is seen as having the most influence. Qatar too has long had links to Hamas.

“While its unclear how seriously Tehran has taken Riyadh’s overtures, so far a regional war’s been averted,” Bloomberg observes. Hezbollah in southern Lebanon has so far respected the temporary truce which has been on since last Friday.

Yemen’s Houthi rebels, however, have persisted in drone and rocket launches toward southern Israel after ‘declaring war’ on Tel Aviv. Houthi militants have also hijacked an Israeli-linked vessel in the Red Sea. The Shia militants have long been backed by Iran, which also supplies them with advanced drone and missile systems. 

Houthi attacks on international shipping in Mideast waters have ramped up of late…

Iran’s proxies’ aggression and tensions in the Persian Gulf

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If this fresh reporting of the Saudis offering investment opportunities to Iran proves accurate, it could create deeper tensions between Riyadh and Washington, considering the longtime US sanctions on Iran. US law requires even third parties doing business with Iran to face punishment.

However, this could also have the quiet blessing of the Biden White House, which has sought ways to reverse the prior Trump administration’s ‘maximum pressure’ campaign, also amid efforts to reign in the Islamic Republic’s nuclear program. While a couple of years ago the US was more aggressive in seizing Iranian oil as it shipped globally, these efforts appear to have waned.