There is a broad consensus among Arab leaders and commentators that the Iran nuclear agreement will have far-reaching geostrategic effects on their countries. Some anticipate an easing of regional tensions that may allow resolution of armed conflicts or political disputes, especially in Iraq, Syria, Lebanon, and Yemen. Those already hostile to Iranian foreign policy believe that an emboldened Iran will simply invest even greater material resources made available by the lifting of international sanctions to increase its intervention in other countries and gain additional influence. But beyond these hopes and forebodings, there is little clarity about the most likely immediate consequences of the nuclear deal or subsequent impacts on the trajectory of Iran’s relations with Arab states.

In the short term—the rest of 2015—Iran and its main Arab rivals will continue to confront each other in their established proxy arenas—and may even escalate their confrontation—if only to improve their respective positions ahead of any political bargaining. Whether or not this will ultimately lead to long term de-escalation, conflict resolution, and regional stability depends heavily on launching—and sustaining—a strategic dialogue, something the relevant governments have signally failed to do in the past.

Yezid Sayigh
Yezid Sayigh is a senior fellow at the Carnegie Middle East Center in Beirut, where he leads the program on Civil-Military Relations in Arab States (CMRAS). His work focuses on the comparative political and economic roles of Arab armed forces and nonstate actors, the impact of war on states and societies, and the politics of postconflict reconstruction and security sector transformation in Arab transitions, and authoritarian resurgence.
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The need for political initiatives to establish new patterns in managing security relations is underlined by the divergence of medium and long term trends, which provide opportunities for understanding but also present real risks of escalating strategic rivalry.

On one hand, although Iran is set to gain very substantially from the lifting of sanctions and opening up if its market to greatly increased trade and investment, its economy, and especially its oil and gas sector, are in severe need of upgrading. The Iranian military also badly needs modernizing (despite boasts about indigenous defense production and R&D). With these demands on its income, it is doubtful that Iran can really step up its political and security involvement in Arab countries.

Indeed, it is already obvious that Iran’s approach is to limit the direct costs of acquiring and maintaining strategic influence. In Iraq and Syria, especially, it prefers to subcontract security functions to local allies and proxies, and has not been happy at being compelled to invest its own resources more heavily there. The lifting of sanctions affords it scope for resilience, but Iran will still be motivated to seek political understandings with its Arab rivals in the hope of underpinning stable, low-cost local security arrangements.

The outcome will depend heavily on how Arab states respond. Saudi Arabia, in particular, has not proved successful in leading the counter-charge, with next to no role in Iraq, insufficient leverage in Syria and Lebanon, and a looming failed intervention in Yemen, where the Iranian stake was in reality minimal despite much propaganda to the contrary. This should encourage a search for a more structured modus vivendi in the Gulf, and political compromises allowing a new balance in the Levant.

Longer term trends, on the other hand, may revive and deepen strategic rivalry. Iranian efforts to modernize its economy, energy sector, and conventional armed forces and restore its international relations—in short, to normalize itself—are likely to stoke renewed concerns among southern Gulf neighbors that already expect Iran to resume the role of “regional policeman” originally claimed by the Shah in the early 1970s. Although Saudi Arabia’s Yemeni campaign already reveals overreach and may be scaled back in coming months, the new and largely untried and inexperienced Saudi leadership still seems set on a course of political and strategic assertion. This could lead it to tilt repeatedly at perceived Iranian windmills in future, and to invest ever more resources into conventional military development and, possibly, a civilian nuclear program. None of this presumes or necessitates an Iranian response or counter-investment, but it undermines prospects for a new stable security architecture in the Gulf and long term understandings in the Levant.

Alarmist perceptions among Gulf Cooperation Council (GCC) member-states of abandonment by the U.S. in favor of a new alliance with Iran are far-fetched indeed. But Iran’s inevitable normalization will nonetheless pose a challenge for Arab rivals that are already failing to pursue effective regional strategies or to form cohesive counter-alignments. Egypt is threatened at home, Jordan faces the looming threat of the Islamic State on its northern and eastern borders, and the activist core of the GCC—Saudi Arabia, the U.A.E., and Qatar—barely agree on the most pressing foreign policy issues. Furthermore, despite talk of a Sunni alliance comprising these Arab countries and Turkey, the latter is in fact at least as likely to seize the opportunity of Iran’s opening up to expand and deepen economic ties, especially in light of the weakening of Turkish economic fundamentals.

The biggest challenge for the Arab states most affected is to adapt, not to a belligerent, expansionist Iran, but rather to a country that, while admittedly still led by a theocrat and in which the hardline Islamic Revolutionary Guards Corps will continue to play an inordinate role in policymaking and the national economy, will use its considerable financial, technical, and industrial potential to come “back to size.” This will be wholly unfamiliar, hence unsettling, but does not preclude a measured approached to building stable regional security relationships.

This piece was originally published by the Belfer Center for Science and International Affairs. It is part of a comprehensive guide entitled “Iran and the Arab World after the Nuclear Deal: Rivalry and Engagement in a New Era.”