Saudi Arabia ends flights and trade with Iran in January 2016.
Context
On January 5, 2016, the foreign minister of Saudi Arabia, Adel al-Jubier, announced via comments to international press that Riyadh had decided to end trade with Iran, and would end commercial flights between the two states while implementing a travel ban for its citizens. “[w]e will… be cutting off all air traffic to and from Iran. We will be cutting off all commercial relations with Iran. And we will have a travel ban against people travelling to Iran” al-Jubier stated. At the same time, Al-Jubier made clear that Iranians would still be welcome to visit Saudi Arabia for pilgrimage.
The context here was a major diplomatic incident between (Sunni) Saudi Arabia and (Shia) Iran over the execution in Saudi Arabia of Shia cleric Sheikh Nimr al-Nimr on January 2, 2016 – following a conviction for offenses reportedly including “sedition, disobedience and bearing arms.” Sheikh Nimr was viewed by Iran as an internal critic of the Saudi Arabian regime who had supported the Shia majority in Saudi Arabia’s eastern province. Following this execution, Iranian protesters stormed and damaged the Saudi Arabian embassy in Tehran, and also attacked a Saudi Arabian consulate in Iran’s second largest city, Mashhad. In response, Saudi Arabia suspended diplomatic ties between the two states – in addition to these economic measures. A timeline summary of major incidents in Saudi Arabia – Iran relations from 2011 to 2023 is available here.
Impact
Bilateral goods trade between these two states was already limited prior to the imposition of these measures, with Saudi Arabian imports from Iran largely limited to pickles and pistachio nuts. However, reporting from CNN suggested that Iran’s subsequent travel ban on its pilgrims could impact the estimated US$18 billion that Riyadh makes annually from religious tourism and pilgrimage to its holy sites.
Responses
i) Iranian government and industry responses.
The Iranian government responded by announcing a ban on all imports from Saudi Arabia, and by reaffirming a travel ban including pilgrimages to Saudi Arabia’s two most sacred sites: Mecca and Medina (first brought in in April 2015 due to a separate dispute over alleged sexual assault of Iranians by Saudi Arabian airport staff.
(ii) Saudi Arabian government and industry responses
The Saudi Arabian Chamber of Commerce told local press that domestic businesses should find alternatives to Iranian suppliers from alternative Arab and Islamic countries. Additionally, Alwaleed bin Talal, a Saudi Arabian billionaire and prince, announced in January 2016 that he would be ending “the study of all projects and investments in Iran” in his businesses. Initially, the Saudi food product firm Savola said that it intended to maintain its investments in Iran, with an executive telling international press that “[f]or the long term, Savola will have a competitive advantage once sanctions have been lifted.”
(iio) Other government and industry responses
Following largely sectarian divides, Saudi Arabia-aligned partners Bahrain and Sudan cut ties with Iran, Qatar and Kuwait brought their ambassadors home from Tehran, and the UAE also downgraded ties with Iran. At the same time, leaders in Shia Iraq, Lebanon, and Yemen all criticised Saudi Arabia’s execution of Sheikh Nimr.
Status
In March 2023 the two states agreed to re-establish diplomatic ties, in a deal brokered by China following multiple previous rounds of talks. As part of the deal, trade relations were also re-established.
Reference list
Al Jazeera. 2016. “Saudi Arabia cuts diplomatic ties with Iran.” Al Jazeera. January 4. Available at: https://www.aljazeera.com/news/2016/1/4/saudi-arabia-cuts-diplomatic-ties-with-iran
Al Jazeera. 2023. “Timeline: Iran and Saudi Arabia, from rivalry to rapprochement.” Al Jazeera. March 10. Available at: https://www.aljazeera.com/news/2023/3/10/iran-and-saudi-arabia-from-rivalry-to-mending-ties-a-timeline
BBC News. 2016. “Sheikh Nimr al-Nimr: Saudi Arabia executes top Shia cleric.” BBC News. January 2. Available at: https://www.bbc.com/news/world-middle-east-35213244
Berg, R. 2023. “Iran and Saudi Arabia to renew ties after seven-year rift.” BBC News. March 11. Available at: https://www.bbc.com/news/world-middle-east-64906996
DW. 2016. “Iranian protesters storm Saudi embassy in Tehran.” DW. January 3. Available at: https://www.dw.com/en/iranian-protesters-storm-saudi-embassy-in-tehran/a-18955846
Gallagher, A., Hamasaeed, S., and Nada, G. 2023. “What You Need to Know About China’s Saudi-Iran Deal” United States Institute of Peace. March 16. Available at:
Hafezi, P., Abdallah, N., and Yaakoubi, A.E. 2023. “Iran and Saudi Arabia agree to resume ties in talks brokered by China.” Reuters. March 11. Available at:
Kottasova, I. 2016. “Iran bans Saudi imports and pilgrimages to Mecca.” CNN. January 7. Available at: https://money.cnn.com/2016/01/07/news/iran-saudi-arabia-trade-pilgrimages/
McDowall, A. “Exclusive – Saudi Arabia to halt flights, trade with Iran – minister.” Reuters. January 5. Available at: https://www.reuters.com/article/world/india/exclusive-saudi-arabia-to-halt-flights-trade-with-iran-minister-idUSKBN0UI1H1/
Paul, K. and Sharafedin, B. 2016. “Iran bans imports from Saudi Arabia, faces Saudi boycotts.” Reuters. January 8. Available at: https://www.reuters.com/article/world/iran-bans-imports-from-saudi-arabia-faces-saudi-boycotts-idUSKBN0UL1JC/
Peralta, E. 2016. “Saudi Arabia Severs Diplomatic Ties With Iran.” NPR. January 3. Available at: https://www.npr.org/sections/thetwo-way/2016/01/03/461835125/iran-saudi-arabia-trade-verbal-barbs-after-execution-of-shiite-cleric
Reuters. 2016a “REFILE-Saudi’s Savola says to stay in Iran despite diplomatic rift.” Reuters. January 6. Available at: https://www.reuters.com/article/business/ environment/refile-saudis-savola-says-to-stay-in-iran-despite-diplomatic-rift-idUSL8N14P2X1/
Reuters. 2016b. “Iran bans imports from Saudi Arabia, faces Saudi boycotts.” Reuters. January 8. Available at: https://www.reuters.com/article/world/iran-bans-imports-from-saudi-arabia-faces-saudi-boycotts-idUSKBN0UL1JC/