The China-brokered Saudi-Iran deal has big repercussions for the Middle East — and the U.S.
A man in Tehran holds a local newspaper reporting on its front page the China-brokered deal between Iran and Saudi Arabia to restore ties, signed in Beijing the previous day, on March, 11 2023.
Atta Kenare | Afp | Getty Images
DUBAI, United Arab Emirates — When arch-rivals Saudi Arabia and Iran announced they were restoring diplomatic relations, much of the world was stunned — not only because of the breakthrough after years of mutual animosity, suspected attacks and espionage between the two countries, but because of who brokered the deal: China.
Taking up a specific role that the U.S. could not have fulfilled, this was Beijing’s first foray into Middle East mediation, an area that for the past few decades was largely occupied by Washington.
As tensions simmer between the world’s two largest economies and U.S. policymakers sound the alarm over competition and security concerns with China, what does Beijing’s ascendance in the region mean for the Middle East — and for U.S. interests?
“Many are breathing a sigh of relief [with] today’s official Iran-Saudi agreement,” Bader al-Saif, an assistant professor of history at Khalifa University in Abu Dhabi, wrote on Twitter after the news was announced. “All 3 parties to the deal can claim victory, but Saudis are arguably the biggest winner,” he contended.
From the Saudi perspective, normalization with Iran — a country that’s long been seen by the Saudi monarchy as one of its greatest security threats — removes obstacles in its reform and economic transformation journey, according to Joseph Westphal, a former U.S. ambassador to the kingdom.
“I think the leadership there believes that this is a very important moment for Saudi Arabia as it emerges … as a real leader in the world on many issues,” Westphal told CNBC’s Dan Murphy on Tuesday. “A constant struggle with Iran delays that and impedes the progress that they made.”
“Obviously, the United States could not have made this agreement possible because we don’t have a relationship with Iran,” the ambassador added. “I think China was a good partner to do this. I think they’re the right people,” he said, noting that China invests heavily in Saudi Arabia and is its top trading partner.
“So I think this is a very good thing all the way around.”
Hopes for de-escalation in areas like Yemen, where Saudi Arabia has carried out a brutal war against Iran-backed Houthi rebels since 2015, are now more realistic than before, analysts say. Risks to shipping and oil supplies in the region may be reduced, and trade and investment between the countries could add to growth.
Reduced risk of direct military confrontation
At the very least, improved communication will reduce risks of confrontation, said Torbjorn Soltvedt, principal Middle East and North Africa analyst at Verisk Maplecroft, who called the deal “a much needed pressure valve amid heightened regional tensions.”
Still, it’s a mistake to assume that everything is solved.
“Due to the ongoing shadow war between Iran and Israel – and sporadic Iran-backed attacks against shipping and energy infrastructure throughout the region – the risk of escalation due to miscalculation is still uncomfortably high,” he said.
In the past few years, the region has seen numerous attacks, particularly on Saudi and Emirati ships and energy infrastructure, which Riyadh and Washington blamed on Iran. Tehran rejects the accusations.
“Riyadh and Tehran will remain adversaries with competing visions for the region,” Soltvedt stressed. “But improved channels for communication have the potential to reduce the risk of a direct military confrontation between the two states.”
Iran is also now enriching uranium at its highest level ever, and is believed to be just months away from nuclear bomb-making capability. Rapprochement between Riyadh and Tehran may mean little if the latter’s nuclear program isn’t addressed.
Has Washington been snubbed?
The White House’s seeming reluctance to praise China was hard not to notice.
“We support any effort to de-escalate tensions in the region. We think it’s in our interests,” National Security Council spokesman John Kirby said of the news on Friday, adding that the Biden administration had made similar efforts in that direction.
But when asked about Beijing’s role, Kirby replied: “This is not about China and I’m not going to characterize here whatever China’s role is.”
Chinese President, Xi Jinping (L) is welcomed by Crown Prince of Saudi Arabia Mohammed bin Salman Al Saud (R) at the Palace of Yamamah in Riyadh, Saudi Arabia on December 8, 2022.
Anadolu Agency | Anadolu Agency | Getty Images
The news signaled the growing influence of China in the Arab region. And not just economically, as it already exports an immense amount of goods to the Middle East and is the largest importer of Saudi oil – but politically. Leaders of Saudi Arabia and the UAE have made concerted efforts to diversify their foreign relations and move away from being overly dependent on the U.S., as successive American administrations treat the Middle East as less of a priority.
“I think it demonstrates that U.S.’s influence and credibility in that region has diminished and that there is a new sort of international regional alignment taking place, which has empowered and given both Russia and China newfound influence and status,” Aaron David Miller, a senior fellow at the Carnegie Endowment for International Peace and former Middle East policy advisor for the State Department, told NBC News.
He called the fact that China brokered the deal “stunning.”
US Marine Corps General Kenneth F. McKenzie Jr. (C, behind), commander of the US Central Command (CENTCOM) and Lieutenant General Fahd bin Turki bin Abdulaziz al-Saud (front), commander of the Saudi-led coalition forces in Yemen, are shown reportedly Iranian weapons seized by Saudi forces from Yemen’s Huthi rebels, during his visit to a military base in al-Kharj in central Saudi Arabia on July 18, 2019.
Fayez Nureldine | AFP | Getty Images
Still, there seems to be a consensus that in terms of military power and security alliances in the region, U.S. influence is in no danger.
“No Chinese mediation — or any diplomatic involvement — will threaten US primacy in the region. All states, Iran included, know that,” Khalifa University’s Al-Saif said. The U.S.-Saudi Arabia security partnership spans nearly three-quarters of a century, and Saudi Arabia’s military arsenal is overwhelmingly supplied and maintained by the U.S. and American military personnel.
Neither KSA nor Iran will change overnight.
Bader Al-Saif
Assistant professor of history, Khalifa University
In any case, China’s gain doesn’t have to mean a loss for the U.S., many believe.
“This shouldn’t be a zero sum game for the US. It can serve US interests: Iran nuclear deal, Yemen, Lebanon for starters can benefit from the agreement,” Al-Saif said.
“A quick move should follow on these files [because] the agreement may not last long,” he added. “Might as well reap benefits while it lasts.”
Will the deal hold?
It’s yet to be seen whether the agreement between the two Middle Eastern powers – and the mutual goodwill expressed in its wake – will last.
Many regional watchers are skeptical.
“Iran’s opting for engagement here should not be misinterpreted as a de-escalation,” Behnam ben Taleblu, senior fellow at the Foundation for Defense of Democracies, told CNBC. “Tehran is capitalizing on deeper Chinese enmeshment in Persian Gulf trade as well as increased Saudi hedging of the pro-American order in the region.”
“There was zero political cost to the Islamic Republic to this agreement, whereas the mere optics and politics of it, let alone the substance, are in Iran’s favor,” he said, stressing his doubt that Iran will stop meddling in regional conflicts and other countries via proxies and militant activity.
Ben Taleblu also argued that Iran’s enmity with Israel played a role in its calculations as “Tehran is trying to show that it beat Jerusalem to Riyadh, and is trying to push back and break out of the diplomatic isolation it felt due to the Abraham Accords” when the UAE and Bahrain normalized relations with Israel.
For al-Saif, there is “certainly hope for the agreement to live on” and lead to the prosperity that people of both countries deserve. “But,” he said, “neither KSA nor Iran will change overnight.”
In a move that helps the brand duck protectionist anti-Chinese tariffs, Volvo Cars has switched production of its award-winning EX30 models destined for US roads from its Zhangjiakou plant in China to the Ghent facility in Belgium.
Volvo EX30 production began in the company’s Ghent factory back in April, but those first cars were earmarked for the Swedish domestic and European export markets, but that move wasn’t primarily motivated by avoiding tariffs. As Electrive reports, the company seemed happy enough to continue importing its small electric crossover from China and accepting the new 28.8% tariffs (up from 10%), but the wait times to get the vehicles shipped in from China was imply too long.
In 2024, Swedish and German buyers had to wait up to eight months for their EX30 in some cases, according to Volvo Cars’ European boss, Arek Nowinski, per Automotive News. Once production in Ghent is fully up to speed, however, wait times should be cut to about 90 days. Those wait times, and the price hike associated with the tariffs, have hurt sales of the originally Chinese-made Volvo EV. In 2024, for example, the EX30 ranked third in European EV sales, but slipped out of the top 10 first half of 2025.
“The car is now being built in Europe, which means faster delivery times,” Volvo Cars CEO Hakan Samuelsson to Automotive News. “We should return to the sales and market share figures for the EX30 that we had before the introduction of tariffs.”
Coming to Staying in America
The EX30’s switch to Ghent is good news for American fans of the compact, lickety-quick Volvo EV. Now that it’s no longer exclusively made in China, Volvo has decided to give it a stay of execution as it revamps its US product lineup to better align with market trends (read: SUVs) and the changing political landscape (read: tariffs and inflation).
The reason? The Made in China version of the EX30 would virtually unsellable in the US due to the implementation of 147% tariffs on vehicles imported from China. Vehicles imported from Europe, meanwhile, carry just 15% tariffs, keeping the EX30 in a competitive price bracket.
Expect to see both Ghent and South Carolina play an increasingly large role in Volvo’s US product mix – at least for the next three-odd years.
SOURCE | IMAGES: Volvo Cars, Automotive News, via Electrive.
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New filings have revealed that BYD is about to release a ridiculous 3,000 hp electric supercar: the Yangwang U9 Track Edition.
BYD already shocked the world when it launched the Yangwang U9, its first all-electric supercar.
It featured four advanced electric motors with a combined power of nearly 1,300 horsepower. The U9 can accelerate from 0 to 62 mph (0 to 100 km/h) in just 2.36 seconds.
With a motor at each wheel and a highly advanced electric-air suspension, the U9 can turn on itself and even jump over potholes.
But that was only the beginning.
Based on a new filing with the Ministry of Industry and Information Technology (MIIT), BYD is preparing to launch a new ‘Track Edition’ of the Yangwang U9:
When an automaker releases a “track” version of a car, it typically primarily features body changes for better aerodynamic performance, adding downforce, and it will also often feature bigger brakes.
The Yangwang U9 ‘Track Edition’ appears to feature all that… and much more.
The filing reveals that BYD updated the motors at each wheel to a new 555 kW motor. That’s a higher-performing motor than in most performance electric vehicles. The U9 Track Edition has four of them for a total of 2,220 kW (3,019 hp).
I would have thought that this was a typo if it wasn’t for the insane electric vehicles coming out of China these days.
Here are a few pictures from the MIIT filing:
There are a lot of performance specs that are not included in the MIIT filing. Therefore, it will be interesting to see when the vehicle is fully unveiled and BYD reveals what kind of performance it can achieve with 3,000 hp packed in 4 electric motors.
Here are a few other features mentioned in the filing:
Standard features:
- 20-inch wheels with 325/35 R20 tyres
- Carbon-fibre roof
- Large fixed carbon-fibre rear wing
- Rear diffuser with adjustable blades for aerodynamic optimisation
Optional aerodynamic parts:
- Standard or enhanced carbon-fibre front splitter
- Electric rear wing
Electrek’s Take
How are they going to keep that thing from flying away? Seriously.
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