There's an old saying in the Arab world, "choose your neighbor before the house". A bad neighbor can be a misfortune and a good neighbor, a blessing. Unfortunately in geopolitics you don't get to make such choices. In West Asia, Iran and Saudi Arabia, the two powerful neighbors, for decades have fought for dominance and waged proxy wars but now they are trying to bury the hatchet. Before we ask what brought the two sides to the negotiating table, let's see what's behind this thaw between Iran and Saudi Arabia.
The roots of Saudi Arabia's rivalry with Iran are often sought in the thousand-year old religious schism, a schism between the Sunnis and Shias, the two main branches of Islam. Iran and Saudi Arabia are on the opposite sides of this split. In the 17th century, The Safavid dynasty transformed Iran into a bastion of Shia Islam and in the 18th century the House Of Saud embraced an ultra-conservative version of Sunni Islam. This marked the onset of their sectarian rivalry.
The ties between these two nations however haven't always been sour, for example their joint stance to help the United States establish a solid front against the Soviet Union during the cold war. Back in the 1960s, when the Egyptian army intervened in the Yemen Civil War, both Riyadh and Tehran came together to back the Yemen Shia monarch. By 1978 both Iran and Saudi Arabia had reached the zenith of their power and cordial ties, this was all subject to change merely a year after.
The 1979 Shia Revolution led by Ayatullah Khumeni, wherein the Shah of Iran was toppled, taking Iran from being a secular state to a new kind of revolutionary theocracy. Ayatullah called upon the muslims of the world to overthrow American-backed Arab rulers. The same year, 1979, there was a transition in Saudi Arabia to, one that sent the Kingdom down the path of conservatism. The Grand Mosque of Mecca was attacked by radical Islamists, Riyadh went from modernism to desert tribalism. The house of Saud took refuge in Wahhabism to cement it's authority.
After 1979, Iran and Saudi Arabia started drifting apart, both set out on the quest of building influence. Both of them had a weak spot, a religious and ethnic minority in their oil-rich provinces. The eastern province in Saudi Arabia had a considerable amount of Shia Population, it also had the Kingdom's oil reserves. The Saudi monarchy felt threatened by the unrest here, it started exerting control on the Shias and limiting their links to Iran.
Iran on the other hand had a significant Sunni population living in the Khuzestan province, home to 80% of Iran's onshore oil reserves. The regime feared an ethno-religious upheaval here, it started cracking down on Sunni Muslims. Both Iran and Saudi Arabia used the "Us vs Them" rhetoric, using the sectarian split as a political construct to rule at home and dictate agendas in the neighborhood.
The aftermath of The Arab Spring 2011 was the creation of a power vacuum which was immediately exploited by the two powers. They supported uprisings and rebellions in states they weren't close to and opposed such rebellions in states they considered as allies. Saudi backs the Syrian rebels, Iran supports Asad's regime aiding them in fighting rebel groups backed by Riyadh.
In Yemen, Iran supports the Houthi rebels, a Shia militia group fighting the regime while Saudi Arabia along with a coalition of Arab nations helps the nation strike the Houthis. The split between the powerplay of these two giants are Yemen, Lebanon and Qatar. The religious fragmentation, the prevailing rivalries between Shias and Sunnis feeds the Saudi-Iran rivalry.
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