U.S.-Saudi relations "better," regardless of China-brokered Iran-Saudi deal

The Biden administration has seen gradual but significant improvement in its relations with Riyadh, regardless of last week's China-brokered agreement between Saudi Arabia and Iran on reestablishing diplomatic relations, two senior U.S. officials told Axios.

Why it matters: Relations between the U.S. and Saudi Arabia have been tense since the Biden administration assumed office.

• Those tensions escalated in October when the Saudis led a move to decrease global oil production. The U.S. saw the move as a violation of the understanding it reached with Saudi Arabia ahead of President Biden’s visit to the kingdom a few months earlier.

Driving the news: The Saudi-Iran deal, which establishes a road map for resuming relations within two months, was seen by many as a victory for China and a blow to U.S. policy in the Middle East. But the Biden administration has sought to downplay the agreement and China's influence in the region.

• "The Saudis agreed to possibly reopen an embassy in Tehran in two months. There's no peace treaty here, but a return to the pre-2016 status quo," a senior U.S. official told Axios.
• The Biden administration doesn't see a problem with the Chinese trying to de-escalate the tensions between Saudi Arabia and Iran as long as it doesn't have to do with military or technological cooperation, the senior U.S. official said.

Behind the scenes: The Saudis, motivated by the hope to end the war in Yemen and stop Houthi attacks against the kingdom, have wanted to reestablish diplomatic relations with Iran since the Biden administration assumed office, according to the senior U.S. official.

• Last week's agreement came after several rounds of talks between Saudi Arabia and Iran in Oman and Iraq. Those talks, however, stalled due to anti-government protests in Iran last year.
• Then in December, Saudi Arabia informed the White House that the Chinese government during President Xi Jinping's visit to the kingdom expressed confidence that it could get a deal that would constrain Iran's actions in the region, the official said.
• Throughout the negotiations in Beijing, the Saudis kept the Biden administration, which was skeptical a deal would be reached, informed, according to the official.
• The U.S. official said the Saudis, who were also initially skeptical, called their White House counterparts a day before the deal was announced and said they were close to an agreement.

State of play: The U.S. official said that both the White House and Saudi Arabia are skeptical that Iran will follow through on the deal, "but we welcome de-escalation in the region through diplomacy wherever possible."

• “The Saudis are not rushing into this, and the agreement is not to reopen their embassies next week. That's contingent upon what happens over the next two months. If missiles start flying from Yemen again, there won't be an embassy," the official added.
• The Saudi Embassy in Washington did not immediately respond to a request for comment.

• Iranian officials have described the deal with Saudi Arabia as "an earthquake" when it comes to U.S. influence in the Middle East.

The big picture: U.S. officials say that regardless of the deal, there has in recent months been a gradual improvement in the relations between the Biden administration and the Saudi government.

• They point to the Saudi foreign minister's visit to Kyiv during which he announced an aid package to Ukraine, which the Biden administration pushed for, as well as an agreement on 5G technology and the multibillion-dollar Boeing deal that was announced on Tuesday as signs of that process.
• “We are in a better spot," a senior U.S. official said. "They’ve done some important things, and we’ve had good communication on some difficult issues from Yemen to 5G/6G technology to security coordination. It’s moving in a better direction."

The White House also doesn’t think the deal will hamper the Biden administration's efforts to push for normalization between Saudi Arabia and Israel nor will it lead Abraham Accords countries like the UAE and Bahrain to cool their relations with Israel.

• “We completely reject the idea that Saudi Arabia reopening an embassy in Tehran will somehow frustrate the process of Israel-Saudi normalization," the senior U.S. official said.

What to watch: The White House hopes that the Saudi-Iranian agreement and the upcoming holy month of Ramadan will help in getting a breakthrough in the diplomatic efforts to end the war in Yemen.

• U.S. special envoy for Yemen Tim Lenderking arrived in Saudi Arabia on Tuesday to discuss ways to broaden the UN-mediated truce that has been in place over the last year. He will later travel to Oman, which plays a key mediation role on this issue.