After seven years of tension, Iran and Saudi Arabia have agreed to reestablish diplomatic relations and reopen embassies. This major breakthrough, negotiated with China, reduces the likelihood of armed conflict between the regional rivals both directly and in proxy conflicts around the Gulf area. This deal represents a significant diplomatic victory for China as Gulf Arab states perceive the United States slowly withdrawing from the wider Middle East. Diplomats have been trying to end a protracted war in Yemen, where both Iran and Saudi Arabia are deeply involved. The two countries have released a joint communique on the agreement reached with China, with a meeting of their foreign ministers also planned. China, a key purchaser of Saudi oil, last month hosted Iran’s President Ebrahim Raisi, and Xi Jinping visited Riyadh in December. The US also welcomed “any efforts to help end the war in Yemen and de-escalate tensions in the Middle East region”.