As Iran hails a historic deal, Saudi Arabia looks on with anxiety and irritation

Saudi Arabia has never formally objected to the international deal restricting Iran’s nuclear programme and ending sanctions. But it watched with anxiety and irritation as Barack Obama pursued the historic agreement, complaining of the appeasement of an untrustworthy enemy at the expense of a loyal American ally.

Billions of dollars were wiped off Saudi and other Gulf stocks the moment the Islamic republic returned to world oil markets – at time when low prices are taking a heavy toll on the Saudis and forcing them to undertake unprecedented economic reforms. Their larger fear is that Iran, flush with new revenues, will be emboldened to intensify its activities across an already violent and unstable Middle East. “Every country in the world is worried about this,” Adel al-Jubeir, the Saudi foreign minister, said last week as sanctions were set to lift. “Iran’s record has been one of war and destruction, terrorism, destabilisation, interference in the affairs of other countries and the concern ... is that Iran not use these funds in order to fund destabilisation activities, but instead use the funds to improve the wellbeing of its people.”

Even before sanctions ended there was a dramatic reminder of the depth of mutual hostility between Riyadh and Tehran when the Saudi government executed the Shia cleric Nimr al-Nimr. It was condemned by Iran and western human rights watchdogs as the judicial murder of a political dissident but defended as the legitimate punishment of a criminal under Saudi law. When the Saudi embassy in Tehran was stormed, along with an Iranian warning of “divine punishment”, the Saudis severed diplomatic relations. Iran’s stance over Nimr was seen as appealing to the “double allegiance” of Saudi citizens living in the oil-rich eastern province.

Last summer’s haj disaster, in which hundreds of Iranian pilgrims were killed in a Mecca stampede, brought the relationship to a new low. But the hostility has deep roots: Iranian support for Hezbollah in Lebanon; for Bashar al-Assad in Syria and the Shia-dominated government in Baghdad has given rise to the notion that Tehran controls three Arab capitals, as well as exerting subversive influence in Sunni-ruled but Shia-majority Bahrain and in Yemen, both in Saudi Arabia’s backyard.

Strategic rivalry between sovereign states is intertwined with centuries-old conflict between Arabs and Persians and the mutual animosities of Sunni and Shia Islam. Xenophobia and sectarianism are both a tool and a result of this enmity, in the words of the Saudi writer Jamal Khashoggi. The Iranians accuse the Saudis of creating Isis; a charge that is vehemently rejected in Riyadh. The counter-argument is that Iranian meddling in Arab lands is creating the space for jihadis to flourish.