Saudi Arabia's dilemma as it tries to stay out of US-Iran war

Saudi Arabia is navigating a precarious strategic dilemma as it attempts to avoid entanglement in the escalating US-Iran war, a conflict that has consumed the Middle East for five months.

Initially seeking to remain neutral, the Kingdom has been drawn into the fray after enduring multiple drone attacks. This week, Saudi Arabia launched joint strikes with the US against Iranian proxy militias in Iraq, which they believe are responsible for the attacks on the Kingdom. This action marks a shift from its previous stance, presenting a choice between continued retaliation for deterrence or pursuing de-escalation, potentially through appeasement.

The regional conflict broadly pits Iran and its proxies, including the Houthis in Yemen and Popular Mobilisation Forces in Iraq, against the US and its Gulf Arab allies. Recent Iranian drone and missile attacks have targeted Jordan, Kuwait, and Bahrain, alongside commercial shipping. The involvement of Iraqi militias and the Houthis represents a recent escalation, highlighting the risk of wider conflict without a US-Iran peace deal.

Saudi Arabia's reluctance to engage in full-scale conflict is partly driven by Crown Prince Mohammed Bin Salman's ambitious "Vision 2030" initiative. This plan aims to diversify the Kingdom's economy away from oil dependence and foster modern domestic industries to create jobs for a growing young population. Such diversification efforts, including building infrastructure like data centers, are vulnerable to attack and are jeopardized by persistent regional instability.