BBG-Saudi Offers Iran Investment In Exchange For Regional De-Escalation

Bloomberg reports that "Saudi Arabia has approached Iran with an offer to boost cooperation and invest in its sanctions-stricken economy if the Islamic Republic stops its regional proxies from turning the Israel-Hamas war into a wider conflict." Communication between Riyadh and Tehran is at a multi-year high following the normalisation deal brokered between the two countries in March.

• The article not only talks of the Saudi 'carrot' in the form of investment or the development of joint O&G ventures, but also the 'stick' in the form of "Washington [...] working with Saudi Arabia and its other Arab allies to stop Tehran “weaponizing” the [Israel-Hamas] conflict to strengthen its so-called axis of resistance,"
• There remain major sources of Saudi-Iranian tension. Iran's overt support for militias/terrorist groups in the Palestinian Territories (Hamas), Lebanon (Hezbollah), Yemen (Houthi rebels), and Syria and Iraq (Shiite militias) is viewed by both Saudi and the US as a geopolitical threat in Iran trying to spread its Islamic revolution across the region.
• Saudi meanwhile has been seen to push backagainst hard-line measures targeting Israel such as the overt arming of Palestinian groups and the complete severing of economic links with Israel. The prospect of an Israel-Saudi normalisation deal is off the table for the duration of the IDF's incursion into Gaza. However, a former Saudi ambassador to the US and UK (now a private citizen) has overtly criticised Hamas, indicating that Riyadh could be open to rekindling the deal should the ground offensive in Gaza come to an end.