The recent Iran–Saudi Arabia rapprochement, mediated by Beijing, leaves Washington out in the cold while significantly boosting Chinese influence in the Middle East. But the United States has itself to blame, as its desire to pivot away from the Middle East and its contradictory foreign policy led it to treat a security ally, Saudi Arabia, undiplomatically while prioritizing diplomacy with a sworn enemy, the Islamic Republic, at all costs. The regime in Iran, which has faced a major popular uprising against its rule in the last seven months, will also receive significant dividends. The agreement is a win for the Islamic Republic’s strategy of supporting proxy groups such as the Houthis on Saudi Arabia’s borders and, more broadly, throughout the Middle East. After years of armed conflict with the Houthis, the Saudi government has been bullied into engaging the Iranian-backed group, admitting tacit defeat diplomatically. Saudi Arabia and Iran have been major adversaries since the 1979 uprising brought the Islamist regime to power in Tehran. The Shi’a theocrats ruling Iran have relied on proxy groups to fight Saudi power across the region, from Lebanon to Yemen and beyond. The Iranian government’s funding and arming of the Houthis with advanced weapons since 2014 has perhaps presented the greatest threat to Saudi security and influence in its own backyard. The Yemeni Houthi rebels’ seizure of Sana’a and the overthrow of Mansour bin Hadi’s government in 2015 was the final straw for Saudi Arabia, sparking the country’s intervention, which aimed to restore the UN-recognized Yemeni government and thwart the Iranian-backed Houthis. Unwilling to tolerate a hostile Shiite group in their backyard, the Saudis found themselves facing an uphill battle against the tenacious Houthi rebels. The Houthis not only captured much of Yemen but also directly attacked Saudi territory with ballistic missiles and drones supplied by Tehran. Though the United States did help defend Saudi Arabia militarily to a limited extent, they simultaneously pressured Riyadh to reach an agreement with the Houthis and Tehran. The Saudi-led coalition’s naval blockade proved woefully insufficient to halt Iranian arms shipments to the Houthis, and the United States’ reluctance to play a more significant role in the conflict only exacerbated Saudi Arabia’s predicament. While the Saudis hoped for a closer alliance with the United States during the Trump administration, the shocking attack directed by Iran on Aramco facilities in 2019, which disrupted 50 percent of Saudi Arabia’s oil production, exposed the harsh reality that the United States cannot be relied upon to guarantee the kingdom’s security – even during a Republican administration. The American inaction in response to that attack demonstrated the limits of their support, leaving Saudi Arabia vulnerable and isolated. Finally, the truth became clear – the United States is no longer fully committed to the long-standing post-World War II security partnership with Saudi Arabia. President Biden’s condescending treatment of Prince Muhammad bin Salaman (MBS), the de facto ruler of Saudi Arabia, has aggravated relations. Upon becoming president, Biden promised to make Saudi Arabia a “pariah” state. The new U.S. administration further strained relations by removing the Houthis from the U.S. list of terrorist groups and basing much of its foreign policy toward the kingdom on Riyadh’s brutal murder of Jamal Khashoggi, the Washington-based reporter who often wrote critically of MBS. MBS was likely expecting commendations and support for having successfully initiated groundbreaking reforms in Saudi Arabia and for unofficially beginning the process of normalizing relations with Israel. Instead, his country’s old friend was treating the kingdom as a foe. With America repeatedly ignoring Saudi security concerns and fixating on the Khashoggi case, the Saudis began the process of pivoting away from the United States and turning to China. For the Saudis, China offered a no-strings-attached relationship, economic cooperation, and a potential means to counteract the Islamic Republic’s increasing threats. Between U.S. support fading, Iranian attacks escalating, Houthi missiles causing increasing damage, and Saudi Arabia’s aspirations for its 2030 vision, the Saudis were backed into a corner. Saudi Arabia had no choice but to accept that it could no longer achieve its original goals and instead must compromise with the Islamic Republic regime. Iran, on the other hand, emerged victorious by consolidating the dominance of its desired group in Yemen through a proven-successful strategy of relying on proxy forces. Although the reconciliation may have put a stop to Houthi missile attacks on Saudi soil, Iran has effectively established a permanent base through its proxy, the Houthis, right at Saudi Arabia’s doorstep. This gives Iran a potential mode of leverage against the kingdom whenever it deems necessary. The Biden administration has praised the new Saudi–Iranian agreement as “providing stability” in the Middle East. But behind the scenes, his team was reported to have been “blindsided” by the recent agreement, with CIA director William Burns traveling to Riyadh in order to inquire about the Saudi decision. Despite National Security Council spokesperson John Kirby’s verbal support for the agreement, the United States has once again reminded its Middle Eastern allies that it cannot match Iran‘s unwavering commitment to its proxies. In this geopolitical chess game, the deal represents a loss for Saudi Arabia and the United States, while Iran‘s regime emerges as the clear winner. Unless Washington changes its approach, China’s increasing greed to fill the void of US retraction from the region, and the Iranian regime’s opportunistic desire to get further concessions from U.S. allies, would further shift the balance of power in the Middle East in favor of China and Iran. Navid Mohebbi is Advocacy Director at National Union for Democracy in Iran (NUFDI).