2016 has begun with a sudden escalation of tension between Iran, the leading Shia power, and its regional rival, Saudi Arabia, the leading Sunni power. Such escalation, unless addressed, can have serious adverse consequences for regional stability and peace and also for the efforts under way to bring to an end the war in Yemen and the wars in Syria. It might also have an impact on oil prices, by either accelerating the fall in prices or inflating them.

Let us look at the basic facts. On 2 January, Saudi Arabia announced that it had executed 47 persons, all Saudi citizens except for a Chadian and an Egyptian. The most prominent person executed was Nimr al-Nimr, 57, a Shia leader who had never advocated violence against the Saudi state. He had spoken out for the rights of the Shias who are concentrated in the eastern part of the kingdom. Incidentally, oil is also concentrated in the same region. It is difficult to take seriously the official Saudi assertion that Nimr-al-Nimr was a terrorist.

Nimr, arrested in 2012, was sentenced to death in 2014. King Abdullah, the previous ruler, was apparently reluctant to permit Nimr’s execution. King Salman, 80, ascended the throne in January 2015. He has had a stroke and is believed to have delegated powers to his nephew Mohammed bin Nayef, 55, the Crown Prince, and Mohammed bin Salman, 30, the Deputy Crown Prince and Defense Minister. The Defense Minister is believed to be a hard-liner and is probably the main force behind the decision to intervene militarily in Yemen. The intervention begun in March 2015 faces an uncertain future and it might not prove as successful as anticipated in Riyadh.

Saudi Arabia has accused Iran of being behind the Houthi rebels. But, so far, no evidence has been brought forward pointing to Iranian involvement. Most observers are of the view that the Houthis revolted because of grievances against the newly adopted constitution and that they succeeded in dislodging President Hadi only because of support from the previous President, Saleh. But even more than the troubles in Yemen, it was the US-Iran nuclear deal that infuriated Riyadh, which was under the wrong impression that Iran could be treated as a pariah forever. Despite Saudi opposition, the US went ahead with the Iran nuclear deal. And Saudi Arabia got slightly disenchanted with its American ally. Earlier, following the fall of Saddam Hussein, the Shias had taken over political power in Iraq, which increased Iran’s regional clout. Saudi Arabia fears that, with the nuclear deal, Iran’s clout will increase even more and that this is likely to pose a serious threat to it.

It was Jordan’s King Abdullah who some time back spoke of a ‘Shia crescent’ led by Iran posing a danger to the Sunnis. Perhaps, it was an unnecessary coinage and in any case it was adopted by Iran’s neighbors and the West with much alacrity.

The ‘Shia crescent’ is supposed to include the Alawite regime of Basher al Assad in Syria and the Lebanese Hezbollah. One of the main reasons for Saudi Arabia’s insistence on the exit of Assad from power is his closeness to Iran.

Riyadh broke off diplomatic relations following the attack on its Embassy in Tehran and its Consulate General in Mashhad. The Saudi missions desperately requested for protection from the Iranian Foreign Office, but no protection was given. Attack on an embassy is always unpardonable whatever the provocation. But the key question is: Did Riyadh expect that it could execute Nimr without provoking adverse reaction in its own eastern region and elsewhere in the region?Anyone familiar with the region could have told Riyadh of the perilous consequences of executing Nimr and branding him as a terrorist. Washington pointed out the dangers, but Riyadh ignored the warnings and concluded that a tough message to Tehran was in the best interest of the kingdom. Is it the case that Riyadh had correctly anticipated the likely outrage in Tehran and elsewhere and still went ahead as it wanted to provoke Iran into doing things that might unravel the nuclear deal?If there was any such calculation it was a wrong assessment of the ground realities.

How much support can Riyadh expect in its confrontation with Tehran? Within the Gulf Cooperation Council (GCC), there is no unanimous support. Bahrain has broken off diplomatic relations and broken air links with Iran, UAE has downgraded relations, and Kuwait has merely recalled its ambassador. Qatar and Oman have not followed the Saudi lead and are unlikely to do that going by their past behavior. Riyadh has cut off trade and air links, though it has added that pilgrims from Iran can come. We do not know whether Iranian pilgrims will go to Saudi Arabia in big numbers. But the Saudis might be worried that trouble-makers might be among the pilgrims. There is potential for trouble when and if Iranian pilgrims are subjected to extra security checks.

Outside the GCC, Sudan broke off relations with Iran, and Egypt has lent support to Saudi Arabia. But, given the lack of strong support within the GCC, such outside support does not count much. Washington has embarked on damage control, but as of now its clout in Riyadh is not rising. Unless the military intervention in Yemen is proved to be a disaster, and it might take time and more deaths in Yemen for that to happen, the current toll being 6,000, Riyadh is unlikely to look at any course correction.

What are Iran’s options? The Shias in Bahrain and in eastern Saudi Arabia can be encouraged to revolt. Tehran can send military assistance to the Houthis. At present, we do not know whether Iran will exercise any of these options. Incidentally, Nimr never sought support from Iran and wanted to fight for the Shias without involving foreign powers. Iran has the option to watch the disarray within the GCC and do what it can to deepen it as subtly as possible. Iran might as well watch the rather concealed succession battle in Riyadh. The GCC itself was established as Saudi Arabia and its neighbors felt threatened by the 1979 Iranian Revolution. Ayatollah Khomeini had condemned hereditary monarchies as incompatible with Islam.

Coming to oil, usually any political tension in West Asia pushes prices up as speculators seek profit. This time, prices did go up marginally for a while before coming down. Iran had threatened to interfere with the movement of oil tankers in the past. But it is unlikely to threaten such a course of action this time around. Its primary focus is upon getting rid of the sanctions and to revive its economy. It may not even engage in an oil war with Saudi Arabia by flooding the market with oil. In the past, even during the Iran-Iraq war and Iraq’s occupation of Kuwait, OPEC has met and conducted business almost insulated from politics. In any case, the clout of the 13-member OPEC accounting for one-third of world oil production has decreased following the surge in US production.

What will be the impact of the Tehran-Riyadh confrontation on Syria? The UN Security Council passed Resolution 2254 on 18 December 2015 authorizing the Secretary General to take the lead for a political, negotiated resolution of Syria’s plight. The process is supposed to start in early January. For long, Saudi Arabia had resisted Iran’s participation in the talks on Syria. It was only recently that the US, after great efforts, succeeded in making Saudi Arabia consent to Iran’s participation. However, Riyadh made uncomplimentary comments on Iran after the meetings. For sound diplomatic reasons, the Saudi Permanent Representative to UN Abdullah al-Mouallimi has announced that the confrontation will not affect the talks on Syria and that Riyadh is prepared to work with Tehran. Since Riyadh has branded Tehran as a sponsor of terrorism, it is difficult not to ignore the incoherence in Saudi public pronouncements. All told, there is a distinct probability that the Syrian political process will be adversely affected by the confrontation. The same can be said about the UN-sponsored efforts for a political solution in Yemen.

How might the confrontation affect India? For India, both Saudi Arabia and Iran are valuable partners and there is no question of choosing one against the other. Indian diplomacy should not find it difficult to navigate in the troubled waters and take care of India’s interest.

In the chess game between Iran and Saudi Arabia, the former is in a better position. Saudi Arabia might need to attend to course correction sooner or later. Iran is going to have Parliamentary election in weeks and the conservatives opposed to President Rouhani’s opening to the West might have been behind the attack on the Embassy. But the Government should not have permitted such an attack. It is doubtful whether the US or any other power can do much to de-escalate the mounting tension between Tehran and Riyadh. Probably, the confrontation might have to get worse before it gets better. But a war is unlikely.