Why Saudi Arabia Is The Quiet Power Broker Shaping The Iran-Israel-US War & Global Oil Markets

Last Updated:March 02, 2026, 12:14 IST

Saudi Arabia remains the world’s largest 'swing producer', capable of increasing or reducing oil supply. In a tense geopolitical situation, this capacity becomes geopolitical power

With missiles being exchanged between Israel and Iran, and US President Donald Trump pledging to continue the mission against Tehran until “all objectives are achieved," a critical player sits just outside the spotlight. Saudi Arabia is neither firing rockets nor issuing daily threats. Yet it confirmed on Saturday that Iran had struck Riyadh and its eastern region, while warning that it reserves the right to defend itself.

But why isn’t Saudi Arabia more visibly “defending" its security and protecting its citizens?

To understand this, we must look at the geography that places Saudi Arabia between the Gulf’s energy infrastructure and the Levant’s conflict zones, examine why it is considered an archenemy of Iran, and assess its role in the trilateral Iran-Israel-US contest. The bigger question remains: will the Gulf states enter the war?

How Old Is Saudi Arabia And Iran’s Rivalry?

The enmity between Sunni-dominated Saudi Arabia and Shia-defender Iran dates back to around 1,400 years. The rivalry was reshaped after the 1979 Iranian Revolution when Iran’s new theocratic leadership sought to overthrow secular and monarchical systems across the region.

Saudi Arabia’s ruling family, which has based its legitimacy on an Islamic monarchy, saw this as a direct ideological and security threat. Tehran’s revolutionary rhetoric explicitly challenged the Saudi custodianship of Sunni Islam’s holiest sites, deepening distrust between the two states.

In the 1980s, this tension played out amid the Iran-Iraq War, where Saudi Arabia and other Gulf states backed Iraq to contain the spread of Iran’s revolutionary ideology. While direct conflict was limited, both states began cultivating influence through proxies across the region, most visibly in conflicts in Lebanon, Yemen, and elsewhere. Tehran’s support for armed groups and Riyadh’s backing of opposing actors entrenched their rivalry in a broader regional proxy struggle.

Religious sectarianism has often been invoked to explain the divide between the two states. But analysts stress that strategic interests and competing visions for regional order have been the main drivers of hostility.

Episodes such as the deadly 1987 clash between Iranian pilgrims and Saudi security forces during the Hajj, which escalated into a diplomatic breakdown, and the 2016 storming of the Saudi embassy in Tehran after Riyadh executed a prominent Shia cleric, further soured relations.

Understanding Saudi Arabia’s Strategy

For decades, Riyadh’s security doctrine was to anchor itself firmly to Washington and contain Iran through alignment with the US and, quietly, with Israel. But over the past five years, that posture has evolved.

Under Crown Prince Mohammed bin Salman, the kingdom has pursued what it calls “strategic autonomy." This does not mean abandoning its American security umbrella; US defence ties remain deep. But it does mean diversifying economic partnerships, most notably with China, and reducing exposure to regional conflict.

China has become a primary trading partner, offering a “non-interference" approach to human rights and internal politics, unlike Western nations. The 2023 normalisation of ties with Iran, mediated by China, marked a major step in taking control of regional security rather than relying on external powers.

Since the 2019 attacks on Saudi oil facilities, widely attributed to Iran-linked actors, Riyadh’s overriding objective has been stability and its Vision 2030, with its sweeping economic transformation plan, and to diversify its economy beyond oil.

The kingdom is investing heavily in tourism, AI, mining, and entertainment to build a sustainable, diversified economy. Key projects include the futuristic city NEOM, tourism expansion on the Red Sea, and massive investment in technology.

To reduce reliance on Western arms, the Kingdom is fostering military partnerships with other countries, including Pakistan and Turkey, and focusing on localising 50% of its defence expenditure through SAMI (Saudi Arabian Military Industries).

What Is Saudi Arabia’s Role In The Iran-Israel Conflict?

According to The Washington Post, Trump’s decision to launch sweeping military strikes on Iran in late February 2026 that resulted in the death of Iran’s Supreme Leader Ayatollah Khomeini and other senior officials did not emerge in a vacuum. It came after sustained diplomatic pressure not only from Israel but also from Saudi Arabia’s leadership, including multiple private urgings by Crown Prince Mohammed bin Salman on Trump to act decisively against Tehran, even as Riyadh publicly called for diplomacy.

Following a phone call between the crown prince and Iranian President Masoud Pezeshkian, Riyadh issued a statement that Mohammed would not allow Saudi airspace or territory to be used in an attack on Iran.

Saudi Arabia shares with Israel the perception of Iran as a strategic threat, especially given Tehran’s missile capabilities and influence over regional militias. By pushing Washington towards military pressure, Riyadh sought to constrain Iran’s ambitions without becoming directly embroiled in combat itself.

A Saudi official said, as quoted by The Washington Post, Riyadh has been “consistent in supporting diplomatic efforts to reach a credible deal with Iran. At no point in all our communications with the Trump administration did we lobby the president to adopt a different policy."

Yet the Saudi role is not simply one of encouragement for force. In recent days, as Iran’s retaliatory strikes have targeted Gulf states, Riyadh has also condemned Iranian missile attacks on its neighbours and warned against further aggression, emphasising sovereignty and regional security.

In this crisis, Saudi Arabia is thus operating as a strategic intermediary, urging action against what it sees as a common threat, while trying to manage the risks of wider regional escalation that could destabilise its own borders and the global energy landscape.

Silent Convergence With Israel

Saudi Arabia and Israel have never had formal diplomatic relations, with Riyadh pushing for a Palestinian state.

In 2023, the Biden administration said it was on the brink of achieving Israeli-Saudi ties under President Trump’s Abraham Accords. But talks fell apart after Hamas’s October 7 attack and Israel’s subsequent war against Hamas.

According to the Institute for National Security Studies, public opinion remains an important factor in shaping Saudi Arabia’s room for manoeuvre. Surveys conducted before the Gaza war suggested that the Palestinian question was no longer the kingdom’s foremost public priority. However, since the outbreak of the Gaza war, polling and regional indicators suggest that opposition to formal ties with Israel has grown significantly, constraining Riyadh’s diplomatic flexibility and raising the domestic political cost of any overt normalisation move.

However, Saudi Foreign Minister Faisal bin Farhan has frequently said that the normalisation of ties with Israel is not on the table so long as a Palestinian state has not been established.

Saudi Arabia’s geographical position as the dominant landmass on the Arabian Peninsula, situated directly between Iran and Israel, makes it a critical, albeit reluctant, player in their conflict. Its geography functions as a strategic buffer, a vital, contested airspace, and a key node for regional energy security, forcing Riyadh to balance neutrality with its own security needs.

Saudi Arabia’s Critical Geographical Location

Because Israel and Iran share no direct border, any overt military exchange between them must traverse the airspace or territorial periphery of other states. Saudi Arabia occupies the central geographic position in this equation. Its territory effectively forms the main buffer between Iran and Israel, meaning that Iranian missiles or drones headed westward would likely pass over or near Saudi airspace.

Saudi airspace has therefore become a strategic corridor in the crisis. While Riyadh publicly maintains a posture of neutrality and de-escalation, regional reporting indicates that it has at minimum tolerated, and in some cases quietly facilitated, US and Israeli defensive operations aimed at intercepting Iranian projectiles. Even passive acquiescence underscores how pivotal Saudi geography is to the operational calculus of all sides.

The kingdom’s southern frontier adds another layer of vulnerability. Along its border with Yemen, Iran-aligned Houthis have previously targeted Saudi oil infrastructure with missiles and drones, demonstrating how quickly peripheral theatres can bleed into Saudi territory.

To the west, Saudi Arabia commands a substantial stretch of the Red Sea coastline—an artery for global commerce and Israeli-linked shipping routes that have increasingly faced threats from Iran-backed actors. Any destabilisation here would reverberate far beyond the immediate combatants.

Overlaying all of this is energy security. Saudi Arabia possesses the world’s second-largest proven crude reserves. A conflict that spills onto its soil, whether through strikes on facilities such as Abqaiq or disruptions to maritime chokepoints like the Strait of Hormuz, would send shockwaves through global energy markets and the broader world economy.

How Oil Can Be A ‘Swing’ Factor For Saudi Arabia

Saudi Arabia remains the world’s largest “swing producer," capable of increasing or reducing output in ways that stabilise or shock prices. In a volatile geopolitical environment, that capacity becomes geopolitical power.

If tensions rise and markets panic, Riyadh can release additional supply to calm prices. If it perceives its own security threatened, it could tighten output, amplifying price spikes. The mere possibility of disruption to Saudi infrastructure is enough to send traders into defensive mode.

For India, which imports the bulk of its crude requirements and counts Saudi Arabia among its top suppliers, this is the real pressure point. Missile exchanges may dominate headlines, but oil benchmarks determine inflation, fiscal space, and household costs.

In that sense, Saudi Arabia functions as the crisis’s shock absorber. Its decision to prioritise market stability signals an intention to contain fallout rather than weaponise supply.

What Are The Implications For India

Nearly 2.5 million Indians live and work in Saudi Arabia – forming the largest expatriate community in the country. Remittances from the Gulf contribute roughly 38% of India’s total remittance inflow. Any regional escalation that disrupts aviation routes, labour markets, or domestic stability would carry direct human and financial consequences.

Energy security is even more immediate. A sustained spike in oil prices would strain India’s trade balance and inflation management. Saudi Arabia’s stabilising role in oil markets, therefore, intersects directly with India’s macroeconomic stability.

There is also a diplomatic dimension. India maintains strong ties with Israel, Iran, and Saudi Arabia—a rare triangular balance. If Riyadh succeeds in containing escalation, it indirectly supports India’s own strategy of multi-alignment in West Asia. If sides harden, New Delhi may face more difficult diplomatic signalling choices.

In that sense, Saudi Arabia’s de-escalation strategy does not just serve its own economic transformation. It preserves geopolitical space for countries like India that rely on regional stability.

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