Iranian relations with the members of the Gulf Cooperation Council (GCC) have historically been a source of regional insecurity. Yet with a possible improvement in US-Iranian relations through positive engagements over Iran’s nuclear programme, a window of opportunity may open for better regional relations.

A history of mistrust

Contemporary relations between Iran and many of the GCC states were somewhat defined by the Iranian revolution of 1979 and the establishment of the Islamic Republic of Iran. Born as a revolutionary Shia movement intent on supporting Shia uprisings throughout the region, a radicalised Iran generated significant mistrust amongst the conservative Gulf monarchies, particularly within Saudi and Bahraini governments. In many ways, Iran presented both a security threat and a moral and religious threat - it was not only considered a supporter of Shia rebellions in the Gulf states, but it also questioned the religious authority of the ruling al-Saud family in Saudi Arabia, which derived much of its legitimacy to govern from its position as the guardian of the Islamic holy cities. This dual threat laid the groundwork for a rivalry between Saudi Arabia and Iran over regional hegemony - a rivalry that continues to this day.

Since the events of 1979, attempts to thwart the regional expansion of one another’s influence have been a key feature of Saudi and Iranian foreign policy. For example, between 1980 and 1988, Saudi Arabia and other GCC states were financial and military supporters of Iraq in the Iran-Iraq war, a conflict that claimed an estimated one million Iraqi and Iranian lives. Gulf participation was largely motivated by its desire to subdue Iranian power.

Fast forward to the modern era, and little has changed. As Arab uprisings challenged the domestic balance of power within nations across the region, tensions between many GCC states and Iran flared over alleged Iranian support of 'Shia' protest movements in the Gulf, particularly in Saudi Arabia and Bahrain. Amidst fears of Iran’s acquisition of nuclear weapons, many Gulf states have chosen to support segments of the opposition in the Syrian civil war in order to weaken the position of Bashar al-Assad, a key ally of Iran. The logic goes as follows: remove Assad, and thereby weaken Iran’s strategic hold over the region.

Gulf patronage of the Syrian opposition epitomises the extent of insecurity felt towards Iran in the contemporary Middle East. Mistrust from key GCC states regarding Iranian intentions for the region is tangible. Long considered a buffer between the Gulf and Iran, the US withdrawal from Iraq arguably exacerbated Saudi perceptions of vulnerability, facilitating ever-burgeoning defence budgets. Believed to be the fourth largest defence spender in the world after the US, China, and Russia, Saudi Arabia's defence budget constituted over 11 per cent of GDP in 2011 and stands at an estimated US$52.9 billion this year, projected to rise to $77.3 billion by 2018. Meanwhile, Bahraini insecurities take the form of the presence of the American Fifth Fleet that is stationed in the country and Bahrain’s reliance on Saudi military intervention at the height of protests in 2011.

A nuclear compromise: prospects for peace?

Despite concrete reasons behind GCC insecurity, a unique opportunity for new GCC-Iranian diplomatic initiatives may present itself shortly through the rekindling of Iran's relationship with the US. The promise of an American-Iranian compromise was first sparked by the progress made to secure Assad's stockpile of chemical weapons through diplomatic means, providing the impetus to begin tackling larger issues that threaten regional stability; namely, Iran's nuclear programme. Facilitated by the ascent of the moderate Hassan Rouhani to the Iranian presidency, an Iranian delegation announced its willingness last week to resolve the Iranian nuclear dispute as part of a broader effort to improve relations with the international community. As Rouhani said:

"The first step has been taken here which is a beginning for better relations with other countries and in particular, between the two great nations of Iran and the US. So the understanding between our peoples will grow and our governments will first stop the escalation of tensions, and then defuse those tensions"  

Prospects for optimism were reinforced by the holding of the first direct talks between Iranian and American leaders since the 1979 revolution. Last Friday, President Barack Obama and President Rouhani spoke in a 15-minute telephone call, during which Rouhani demonstrated the "basis for resolution" of the Iran nuclear stalemate, according to Obama. Though being "mindful of the challenges ahead," Obama expressed his optimism for this new diplomatic turn in his address to the White House following the phone call:

"While there will be significant obstacles and success is by no means guaranteed, I believe we can reach a comprehensive solution. I do believe that there is a basis for a resolution."

Obama's optimism was complemented by statements made by Rouhani. "Step by step, we will build confidence between our presidents and our countries," Rouhani said " With sufficient will on both sides – and I assure you that on Iran's side the will is 100% – the nuclear file will be resolved in a short period of time." Progress on the nuclear front could reduce regional and global tensions and lead to the dismantling of international sanctions on Iran, which have drastically hampered the Iranian economy.

The promise of a US-Iranian rapprochement may offer a unique opportunity to build trust between the GCC members and Iran and reduce Gulf insecurity regarding Iranian nuclear ambitions, thereby facilitating a possible decline in regional tensions. Gulf countries that would likely be amenable to engaging in negotiations include Oman and Kuwait, which have largely maintained amicable relations with Iran. However, Saudi Arabia and Bahrain would likely be unsupportive of a compromise, rendering the source of regional tensions unaddressed.

Saudi and Bahraini opposition would arguably stem from two factors. Firstly, Saudi Arabia and Bahrain genuinely mistrust Iran's intentions for a nuclear compromise and fear the consequences of Iranian encroachment in the Gulf and the wider Middle East, as exemplified by Saudi weapons spending and Saudi and Bahraini reliance on American military support. A less obvious reason for Saudi and Bahraini insecurity is rooted in domestic concerns.

The roots of domestic insecurity

As revolution and political upheaval gripped Arab regimes, many Gulf states did not remain impervious to regional changes, witnessing sustained domestic protests calling for reforms. Though many demonstrations sought to highlight the marginalisation of particular sectarian identities, protests often spanned sects to demand a general improvement in civil and political rights. Yet excluding the resignation of the Kuwaiti Prime Minister in December 2011 and the ‘symbolic gestures’ of Oman’s Sultan Qaboos to implement political reforms and ministerial changes, Gulf leaders have largely rejected options for compromise, meeting dissent with brute force and increases in welfare spending instead.

More importantly, many Saudi Arabian and Bahraini elites have fallen back on the deployment of sectarian language to try and deflect attention from the root causes of political and socio-economic unrest in many Gulf countries. Specifically, sectarianism has been used to divide protests movements spanning Sunnis and Shias, while marginalising and discrediting the grievances of the latter populations by attributing their efforts to Iranian-sponsored terrorism. Consequently, Bahrain’s repression of protests largely targeted Shias, though no evidence could be found to indicate Iranian interference.

Blaming Iran for domestic dissent subsequently provided justification not only for the use of violence and the delegitimisation of Shia grievances, but also for the absence of a genuine political compromise. The Iranian spectre has been particularly useful in ensuring American complacency in the suppression of protests and the provision of continued military assistance, epitomised by the presence of the US Fifth Fleet in Bahrain. According to Fawaz Gerges’ new book, Obama and the Middle East, the Obama administration “has consistently measured every Arab uprising by whether it plays into Iran’s hands”, ensuring American support during protests in the Gulf.

The consequences of policies to highlight alleged Iranian interference and the 'compliance' of Gulf Shias in Iranian activities are profound and wide-reaching. Firstly, they serve to validate the build-up of weapons in the Gulf, exacerbating insecurities felt on the part of both Iran and its GCC counterparts. Secondly, such policies perpetuate America's status as the regional watch dog, which limits Gulf willingness to limit tensions with Iran, though the US must consider reducing its presence due to financial constraints. Thirdly, these measures amount to short-term gains for long-term pain for sectarian societies such as Saudi Arabia and Bahrain.

As discussed by Kristian Coates-Ulrichsen, policy makers are not only prolonging a genuine need for reform, but in manipulating sectarian cleavages, they also threaten to fragment national identities, fuelling a "destructive self-fulfilling prophesy" where sectarian grievances increasingly divide and endanger society while diminishing prospects for gradual and consensual political reform.

Playing the blame game with Iran and deploying the use of sectarian language provides a final, more insidious consequence for domestic and foreign policy. As asserted by Coates-Ulrichsen, for Gulf monarchies dealing with protests, "It serves their interests to raise the spectre of an Iranian menace working through local agents to destabilise the Gulf states and weaken the West's most reliable regional allies." Consequently, it could be argued that an improvement in Iranian relations may render claims of Iranian interference in the Gulf untenable, thereby invalidating Gulf justifications for the suppression and the marginalisation of protest movements, particularly those perceived as Shia demonstrations. This turn of events may oblige leaders to consider political reform, a move which, thus far, they appear unwilling to make.

Thus, despite the promise of a new dawn for US-Iranian relations in the wake of a nuclear compromise, the potential for significant improvements in Iran's relations with key Gulf states will likely be overshadowed by pervasive feelings of insecurity on the part of Saudi Arabia and Bahrain, and serious implications for both their domestic and foreign policy.