By Sina Azodi Contributing Writer 5 October 2015

The Iranian nuclear program was the subject of a decades-long, international dispute between Iran and the world powers. Not until July of 2015 did the Joint Comprehensive Plan of Action (JCPOA) bring a diplomatic resolution to the nuclear conundrum. Unlike its predecessors, President Rouhani’s administration of “Prudence and Hope” committed itself to resolving the nuclear issue in order to improve the Iranian economy and, potentially, to shift its position within the international community. An analysis of the ramifications of the nuclear deal between Iran and the world powers illustrates that the JCPOA will improve Iran’s regional status, but could threaten the interests of its regional Sunni rivals. To encourage stability within the region, Iran must refrain from adventurist policies and find ways to reassure its neighbors that its shifting relations with the international community, and with the United States in particular, will not threaten their security in the future.

One important political consequence of the nuclear deal between Iran and the world powers is the formation of the first formal agreement between Iran and the United States in nearly 40 years. Remarkably, these two countries have managed to resolve this divisive issue through official diplomatic channels that may lay the ground for future cooperation.

Resolving the nuclear conundrum allows negotiations between Iranian and American diplomats to address mutual cooperation on regional security issues, including terrorism. While Iran’s Supreme Leader, Ayatollah Khamenei, recently rejected further talks with the United States, it is likely that his statements are for propaganda purposes, and for hardliner constituencies. The Islamic State in Iraq and Syria (ISIS) and other terrorist groups are clear and present dangers to the interests of both Iran and the United States, and both nations want to diminish these threats. While Iran and the United States recently engaged ISIS from the air and ground, their attacks were not ‘officially’ coordinated. A potential détente between the two countries could encourage further collaboration, strengthening Iran’s status in the region.

Nevertheless, once the Iran nuclear deal is implemented it could endanger the interests of Iran’s regional Sunni rivals, particularly Saudi Arabia. Iran and Saudi Arabia have a historically contentious relationship, but recent events exacerbated existing tensions, leading to a de facto ‘cold war.’ The Arab Spring, or what Iran called an “Islamic Awakening,” strained the relationship further. In Syria, the Saudis supported the Syrian opposition, while Iran backed President Assad. In Bahrain the Iranians supported the Shia majority while Saudi Arabia’s troop presence quelled the Shia uprising and supported the Sunni government.

The recent air campaign against the Shia Houthis in Yemen is another example of Saudi determination to limit Iran’s influence in the region. Saudi Arabia has also launched a campaign to check Iran’s power by overproduction of oil.1 Iran’s diplomatic initiative to bring a political solution to the Syrian issue can be seen as a result of these Saudi policies, as Iran’s economy will not allow the state to support Bashar al-Assad in Syria or defend the Shia government in Baghdad.

Saudi Arabia has determined that a détente between Iran and the United States will follow the JCPOA, which could fundamentally alter the balance of power in the Middle East in favor of Iran, giving the country more political influence and power. The Iranian economy yearns for foreign investments, and lifting of the sanctions provides Iran the opportunity to revive its shattered economy and increase its hard power. This is not a desirable result for Saudi Arabia’s security, which has long used the Iranian threat to garner U.S. support. The Arab sheikhdoms of the Persian Gulf region face the same security challenge as Saudi Arabia. However, they feel that their smaller size increases their vulnerability to an emboldened Iran.

Bahrain’s Sunni government is especially vulnerable due to its Shia majority population. If Iran decides to take a more aggressive approach towards Bahrain, it could increase its support for the Shia majority with historical ties with Iran. The United Arab Emirates has uniquely strong trade ties with Iran, and a potential deal between Iran and the United States would strengthen trade since many Iranians hold strong financial ties to Dubai. However, Iran and the UAE had territorial disputes in the Persian Gulf, and the UAE sees Iran’s size and behavior as a threat to its security. After Iran resolves its issues with the U.S., a more aggressive Iranian approach in the region could further fuel religious and ethnic differences.

Turkey would also be affected by a potential nuclear deal. Throughout history, Turkish-Iranian relations have fluctuated between periods of rivalry, cooperation, and even military skirmishes. While Turkey played an important role in the Iranian nuclear crisis by participating in the Tehran Declaration of 2010, the Arab Spring and Turkey’s opposition to President Assad strained the relationship between these countries. The deal is important for Turkey since it has been one of the major trade partners of Iran. Once sanctions are lifted, the bilateral trade between the two countries will increase, especially in the energy sector. Turkey imports 20% of its natural gas from Iran. Additionally, Turkey is a favorite destination for Iranian tourists. Lifting sanctions will benefit Turkey’s tourism industry by helping more Iranians afford the travel. Despite the economic benefits, Turkey is concerned that an improved Iranian-American relationship will increase Iran’s regional power. Turkey’s “zero problems” policy pursues friendly relations with all of its neighbors, but an aggressive Iranian policy provides Ankara with a predicament due to its weaker position relative to Tehran.

The JCPOA was an historic moment in the history of Iranian-American relations, signaling a potential shift in the country’s position within the international community. Despite strong opposition from a number of diverse parties, Iran and the United States resolved one of their outstanding issues through official diplomatic negotiations. The JCPOA eluded the possibility of a military confrontation between Iran and the United States, which can help bring more peace and stability to the region. However, the potential of rapprochement frightens Iran’s rivals in the region. They fear that this resolution endangers the status of rivals in the region due to Iran’s increasing power.
It is possible for Iran’s rivals to engage in more aggressive policies to offset Iran’s influence, and this could potentially destabilize the region. Still, upon implementation, the nuclear deal will open the door for further economic development and financial benefits for Iran’s major trade partners, especially Turkey and the UAE. To avoid any further instability in the region, Iran and its neighbors should be encouraged to work cooperatively to address regional threats issues, such as the situations in Syria and Yemen.

In the meantime, the United States should work closely with its allies, and continue to provide them with security guarantees. In addition, the U.S. should actively persuade Iran to engage in constructive cooperation with its neighbors, in order to elude the possibility of another military conflict in the region. The United States and Iran can work cooperatively on issues of mutual interest such as ISIS. Additionally, Iran should consider the ways in which it can reassure its neighbors that a potential rapprochement with the U.S. and other world powers will not occur at the cost of their security. The Middle East is a region with a history of conflict and rivalries for security and influence. While the nuclear deal can be beneficial to the security of the region, there are many issues that need to be addressed.

1. Oil prices must be $130 per barrel for Iran to balance its 2015 fiscal budget, and current oil prices of $40 per barrel significantly hurt the Iranian economy and limit Iran’s power in the region.

Sina Azodi is a Research Assistant at the Woodrow Wilson Center for International Scholars and a graduate of Elliott School of International Affairs. (B.A.&M.A.)

Photo taken by U.S. State Department, is licensed under CC-BY-2.5.