Beyond guns and oil: The emerging soft power rivalry between Iran and Saudi Arabia

A little over a year ago, the icy relations between Iran and Saudi Arabia underwent a remarkable thaw. Following a handshake between their foreign ministers in Beijing, the two countries restored diplomatic ties, reopened their respective embassies, and dispatched a flurry of high-level visits to each other’s capitals. But beneath this détente, a new front emerged in their longstanding rivalry — one rooted not in geopolitics or religious ideologies but in the realm of soft power and societal aspirations.

Change of dynamics: Iran’s past glory and present struggles

Prior to the 1979 revolution, Iran and Saudi Arabia maintained a pragmatic, if somewhat suspicious, relationship. Mutual economic interests in the Persian Gulf took precedence. At this time, many in the region and beyond regarded Iran as a model for development and progress, particularly given the country’s pioneering advancements in women’s rights, education, and industrialization. Iranian women notably enjoyed the right to drive (1940s) as well as vote and run for parliament (1963) decades before many of their regional peers.

However, the 1979 Iranian Islamic Revolution marked a turning point. The Saudi government saw Iran’s ideology as a threat and backed Iraq during the brutal Iran-Iraq War, which erupted a year later. Tehran, in turn, accused the Saudis of being a puppet of the United States and intertwined relations with Riyadh with its broader tensions with Washington. Extensive reconstruction efforts following the war with Iraq diverted Iranian resources, pushing the Islamic Republic to prioritize a state-controlled, oil-focused economy while simultaneously imposing stricter social restrictions. More recently, the country’s economic progress was further hindered by years of crippling international sanctions adopted in response to Iran’s nuclear program and regional policies. And that significant drag on the Iranian economy was exacerbated by decades of incompetence and corruption of the authorities.

Despite some notable achievements in, for example, its homegrown military and aerospace industries, Iran’s development strategy — designed to achieve security through maximum self-reliance — has failed to deliver economic progress or greater well-being for the Iranian population. Its auto industry tellingly remains underdeveloped and is technologically decades behind the world’s leading automakers. And while the country boasts of having achieved long-sought “food security” through agricultural self-sufficiency, this has come at the cost of low efficiency and high environmental damage. In contrast, over the past 40 years, Saudi Arabia and other regional states developed internally and increased their role in international markets, in many cases surpassing Iran in terms of their economic size, technological sophistication, and degree of interconnectivity.

Emerging soft power edge

Iranians’ simmering discontent with their socio-economic situation was long fueled by comparisons to Iran’s smaller neighbors — the United Arab Emirates, Qatar, Kuwait, and even Oman — which were widely seen as more competent and focused on national interests rather than ideology. However, Iranian authorities habitually dismissed such comparisons, refusing to acknowledge any useful similarities with “smaller” and ostensibly less geopolitically influential countries.

With a population of more than 36 million and a GDP of over $1 trillion (compared to Iran’s nearly 89 million and just over $410 billion, respectively), Saudi Arabia cannot be so easily dismissed as “too small” to be relevant. Yet until recently, Iranian officials routinely tried to draw attention away from news of Saudi Arabia’s social and economic reforms under its ambitious Vision 2030 plan by portraying the Saudis as extremist enablers and mere pawns of Western powers. This antagonistic strategy became untenable after last year’s thaw in relations, however; and Saudi Arabia’s economic plans, advancements, social reforms, as well as global aspirations have since become widely covered by Iranian media, while the kingdom’s rebranding efforts are often discussed by Iranians on social media platforms. Most of this coverage continues to be carried by non-state media, which tends to be owned or affiliated with reformists and moderates. Instead of outright blocking coverage of Vision 2030, the Iranian authorities have more often attempted to deflect or rebuff the reports.

Unlike Iran’s state-controlled development model, Saudi Arabia’s Vision 2030 focuses on economic diversification. It aims to wean the kingdom off oil by investing in advanced technologies, tourism, and renewables. The plan is also ushering in a more moderate social landscape, loosening restrictions on women and entertainment — in stark contrast to Iran’s emphasis on strict religious codes and the daily challenges Iranian women face from the morality police. On the international stage, while Saudi Arabia has sought to cultivate a wider-reaching global image by engaging with all major powers, Iran has further limited its foreign policy maneuvering power by increasing its dependency on countries like Russia and China.

Three aspects of the Saudi kingdom’s modernization and reform efforts, when contrasted with the situation in Iran, have engendered perhaps the highest levels of anger and frustration among Iranians: socio-economic development, sports and cultural openness, as well as internet freedom and the viability of the high-tech sector. For instance, Tejarat News, a privately owned online economic news portal, published an infographic article in February comparing the main socio-economic indicators between Iran and Saudi Arabia, including the two countries’ GDP and GNI figures, relative passport strengths, and rankings on the Corruption Perception, Gender Equality, and Economic Freedom indexes, among others. Iranians shared the piece widely on social media, expressing ridicule, anger, and frustration at their own situation.

Adding fuel to the fire have been a number of recent high-profile Saudi events. Soccer megastar Cristiano Ronaldo’s admittance into the Saudi league as well as music festivals featuring female performers have stood in stark contrast to Iranian restrictions on female participation in both sports and public entertainment — to say nothing of the worsening harassment Iranian women endure at the hands of the morality policy for failing to observe the hijab law. These developments spark envy and increase public pressure on the Iranian authorities, who struggle to deflect such criticism.

In a poignant example, a Saudi tourism ad featuring soccer legend Lionel Messi drew wide public attention in Iran; but when questioned about this, Iranian Tourism Minister Ezatollah Zarghami offered a weak response, mentioning that “if Messi is advertising for Saudi tourism with millions of dollars, we ourselves have our own Sadegh Booghi.” Ironically, Booghi made global headlines specifically after the authorities took down his Instagram page for singing and dancing in public. This answer not only failed to appease critics but also fueled jokes and accusations of government incompetence.

Zarghami’s remarks are particularly telling because the Iranian authorities not only consider the tourism sector a potentially promising engine for economic growth but also a means to combat what they perceive as anti-Iranian sentiment abroad. However, unlike regional competitors like Saudi Arabia and Turkey, Iran has failed to relax draconian regulations — like its absolute ban on alcoholic drinks and mandatory hijab for women — to make itself more welcoming to foreign travelers. Moreover, Tehran has actually created new barriers in recent years, such as further restrictions on use of the internet, messaging apps, and social media inside the country. As a result, the government’s approval for the tourism ministry to provide “unrestricted SIM cards” to foreign travelers has triggered yet more public anger among Iranians, who feel they are being treated as “second-class citizens” at home compared to foreign visitors.

Similarly, last January, after one Iranian entrepreneur and expat took to X (formerly Twitter) to highlight Saudi Arabia’s new investor visa program for healthcare, science, and research specialists, his social media post sparked exasperated comments from fellow entrepreneurs and citizens who have been struggling under Iran’s tightening restrictions on the high-tech sector. Over the past decade, waves of Iranian IT experts have fled the country, seeking opportunities in neighboring UAE, Turkey, Qatar, and Oman, or further, in Europe, Canada, and the United States.

To be sure, Saudi authorities continue to face rebukes from watchdog groups for their crackdowns on women’s rights activists and political dissent. But the Iranian public is rarely if ever exposed to such reporting, instead mainly seeing headlines about Saudi economic advances and expensive domestic megaprojects. Meanwhile, discontent with the situation at home has continued to grow among the Iranian population. Years of economic decline, limited social freedoms, and two nationwide protests (2019 and 2022) have eroded public trust. And despite calls for reforms, the government shows no signs of willingness to compromise, instead proceeding with plans to further restrict internet access and criminalize violations of the mandatory dress code for women. Unsurprisingly, Iran’s last election witnessed the lowest voter turnout ever, with nearly 60% abstaining (and 92% abstaining in Tehran itself) as a form of protest against the ruling establishment.

The road ahead: A battle for hearts and minds

This situation has created a new front between Tehran and Riyadh, which the Saudis are apparently seeking to further exploit. The growing number of Persian-language media outlets launched by or with the backing of Saudi Arabia — including satellite channels, radio stations, social media accounts, and online news agencies, which apparently attract millions of viewers — is clear evidence of this strategy. Saudi Arabia may be seeking to play up its economic and social reforms, positioning itself as a model of modernity and prosperity, to erode the Islamic Republic's legitimacy and appeal among the Iranian populace and its regional proxies and allies. By undermining the Iranian regime’s own narratives and sowing further discontent, thus redirecting Iranian focus inward, Riyadh’s ultimate goal is to gain leverage over Tehran in the broader regional struggle for influence. Many Iranian officials have repeatedly inveighed against the Saudi-funded television channel Iran International, and have even taken restrictive measures against it. Indeed, it is worth noting that this network’s coverage of the 2022-23 protests in Iran was a particular bone of contention between Iran and Saudi Arabia prior to the resumption of ties.

This emerging soft power front presents a new challenge for the Iranian leadership, which has traditionally relied mainly on draconian, religiously informed social restrictions at home and hard power abroad, projecting external influence through military might and regional proxy groups. It has certainly not made any real effort at capitalizing on its cultural and historical legacies; while Iran’s business climate is anemic, difficult to navigate, and beset by risk from economic sanctions. But Tehran now faces the prospect of losing the hearts and minds of its supporters both at home and across the region to the allure of Saudi Arabia’s modernization and economic progress.

As the geopolitical landscape of the Middle East continues to evolve, this emerging soft power battle between the two traditional regional rivals represents a new and potentially decisive chapter in their enduring regional competition.

Maysam Bizaer is an analyst and commentator who focuses mostly on Iran’s foreign policy, politics, and economy. He is a frequent contributor to a number of international media and US-based think tanks covering the Middle East.

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