NASA Persian Gulf.

Swapping Sovereignty

Can Iran and the UAE Make A Deal?

On January 15, Defense News, an online and print military newspaper, reported that Iran and the United Arab Emirates had reached an agreement on the disputed islands of Abu Musa and Greater and Lesser Tunbs. The report quoted an unnamed high-level UAE source, who said that although a deal on Abu Musa, the largest of the three islands, was still being negotiated, the status of the other two had been “finalized,” and that both would return to the UAE.

Such a deal could be historic. The islands are located near the strategically important Strait of Hormuz. In fact, the main shipping and tanker channel in and out of the Gulf lies between Abu Musa and Greater and Lesser Tunbs, making them hugely important for the global economy. Control over the islands has long been a major source of tension between Iran and the UAE. Iran claims that all three islands were Iranian territory until the British occupied them in 1908. The UAE argues that, for centuries, most of Abu Musa’s inhabitants have been Arab, so the islands should rightfully belong to the UAE. Since a 1971 memorandum of understanding, Abu Musa has been divided between Iran and the emirate of Sharjah. The memorandum stipulates that Iran and Sharjah would jointly administer the island and divide its resources. Shortly before the document was signed, Iran took control of the other two islands, and has occupied them ever since. The UAE presented its own claims to the United Nations Security Council in 1980, but to no avail.

But it is too soon to pop the champagne corks, because neither the Iranian government nor the UAE government has confirmed the news. And that is likely why not a single Iranian or Emirati official newspaper, or any international news outlet, has reported on the issue. It would be easier to judge the report’s veracity if observers knew whether Iranian President Hassan Rouhani and Foreign Minister Javad Zarif, who had recently been negotiating with the Emiratis, were doing so with the consent of the hard-line Iranian Revolutionary Guard Corps. The IRGC effectively runs the country’s economy and strategic affairs. But that kind of information is not available. What is clear is that, just a few weeks ago, the IRGC’s Major General Mohammad Ali Jafari sent a stern message to Zarif, warning him to refrain from engaging in major regional diplomacy and to “steer clear of military issues,” as the National newspaper reported. If Rouhani and Zarif are holding talks with the Emiratis against the IRGC and Supreme Leader Ayatollah Ali Khamenei’s wishes, there is no reason to expect a diplomatic resolution or major progress on any of the other items on the Iranian regional agenda.

Another strike against the Defense News report is that it contains an important fallacy. The report says that Oman “will receive free gas and oil from Iran once a pipeline is constructed within the coming two years” in return for the Sultanate giving up the strategically located mountain of Ras Musandam to the Iranians. Regardless of whether such a quid pro quo would be a good thing for both parties, it doesn’t ring true. According to credible Omani sources, neither is Oman so casually handing over strategic territory to the Iranians nor is Tehran ready to supply the Sultanate with oil and gas for free. One of the sources said, “We can buy the oil, and Sultan Qaboos” -- Oman’s leader -- “will not give up sovereignty over part of the homeland for commercial interests. That’s just ridiculous.”

Yet regardless of the existence or non-existence of a deal on the islands, there is no disputing that relations between Iran and the UAE have improved in recent months, and that this development, should it continue, carries tremendous strategic implications for Gulf security, the regional balance of power, and U.S. plans and interests in the Middle East.

The rapprochement between the UAE and Iran, which seems to date from a few months ago, when several Iranian and Emirati leaders came together for several high-level meetings, is in many ways a product of the U.S. pivot to the Asia-Pacific. By communicating its intention to gradually disengage from the region, Washington has, perhaps inadvertently, forced its allies to adjust their foreign policies. And contrary to what some have recently opined, that shouldn’t spell conflict and disaster in the Middle East. 

As the United States redefines its role in the region and becomes more a watchful protector than an interventionist police officer, it will, by design or default, push regional powers to exercise restraint and cooperate. And that is exactly what the UAE is doing. Mindful that the days of the United States playing hegemonic stabilizer in its neighborhood are over, yet still confident that its partnership with Washington is strong and here to stay, the UAE has adapted to the United States’ new global priorities and approach toward the Middle East. And it is doing so by intensifying its engagement in positive diplomacy in the region and by improving relations with old foes such as Iran. Some may call it bandwagoning -- it might seem that the UAE is cozying up to Iran, the most powerful state in the region -- but in reality it is more a healthy and rational exercise of hard-nosed realism. 

It is unclear if all U.S. allies will follow in the UAE’s footsteps. Some might see enhanced Iranian-Emirati relations as a security and political risk. But not the UAE’s neighbors. Qatar, for example, isn’t concerned, given its close economic ties to Iran. Neither is Kuwait. And Oman, of course, sees it as a net positive -- otherwise it wouldn’t have helped mediate between the two countries.

Which leaves Saudi Arabia and Bahrain. Although it is not unthinkable for Saudi Arabia to choose accommodation over confrontation with Iran, one has to be realistic and see that unlike other Gulf States, the Kingdom is actually in open proxy warfare with Iran in Iraq, Lebanon, Yemen, and, most notably, Syria. Given the intense rivalry between the Saudis and the Iranians -- a rivalry that has defined the politics of the region for the past decade -- it is hard to see how Saudi Arabia could follow the UAE’s lead. But the ball is not squarely in the Kingdom’s court. Iran has a big say, too, over the direction Saudi Arabia takes. It can either ease Saudi Arabia’s concerns or bolster its bunker mentality.

Aside from contributing to Gulf security, the rapprochement between the UAE and Iran could enable better ties between Riyadh and Tehran. Consider this: Saudi Arabia previously relied on the United States and the Gulf Cooperation Council to counter Iranian influence and designs. With the exception of Oman, which has its own security and economic considerations, all the Gulf States were more or less in one Saudi-and-U.S.-led camp against Tehran. Now all that is gone. The United States seems genuinely interested in revamping its relations with Iran. Meanwhile, worries about Iran have waned in the UAE, Qatar, and Kuwait. Even Manama, which has always felt threatened by Iran, sees hope in Rouhani and Zarif. But not Saudi Arabia, which seemingly refuses to believe that a positive change has taken place in the Iranian political system, and today the Kingdom finds itself almost alone in its aggressive confrontation with Iran. And that’s not a good position to be in. The Gulf States seem to have moved on and embraced, with varying degrees, Iran’s new approach to regional relations, yet all Saudi Arabia has done is dig in its heels. 

Saudi Arabia could soon realize that its self-made isolation is self-defeating. Whether the Kingdom takes a page out of the UAE’s book depends primarily on the wisdom of its leadership. It will still take a long time to extinguish the fires of the Saudi-Iranian theaters of conflict. But it all starts with one courageous, strategic decision, and only King Abdullah bin Abdulaziz can make it. Prince Saud al-Faisal, the Saudi Foreign Minister, was just in Oman meeting with His Majesty Sultan Qaboos to deliver a personal message from King Abdullah. Could it be a special request for Oman to mediate between Riyadh and Tehran? It is not clear, but if news of a deal between Iran and the UAE over the three islands is confirmed, Saudi Arabia will find it increasingly costly to swim alone against the tide of regional diplomacy and reconciliation.

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