BAGHDAD (BLOOMBERG) – Iraq is carving out a mediating role between Iran and Gulf Arab oil producers including Saudi Arabia, a shift for a country better known as a victim of regional conflict than a conduit to defuse it.

In recent weeks, Iraq convened indirect talks between its neighbours Saudi Arabia and Iran, with a focus on Yemen’s war, where the two countries back opposing sides.

Iraqi Prime Minister Mustafa Al-Kadhimi, a former intelligence chief experienced in regional security issues, is seen by Saudi Arabia and its ally the United Arab Emirates (UAE) as having a degree of autonomy from Iran.

He has thus been able to build up trust to make such engagement possible, four people briefed on the talks say.

Mr Kadhimi has also kept open channels between Teheran and President Joe Biden’s administration, which two people briefed on the Iraqi side say has welcomed the separate avenue to engage diplomatically with Iran.

World powers are holding talks in Vienna to try to resurrect a 2015 deal with Iran to rein in its nuclear activity in exchange for sanctions relief.

The mid-May expiration of an agreement on monitoring Iranian nuclear facilities gives these multi-track talks added urgency.

The regional outreach could help promote the revival of the nuclear accord, after former US president Donald Trump’s unilateral exit was followed by attacks on global shipping lanes and Saudi oil installations, many of them blamed on Iran or its regional proxies.

Kadhimi’s path

Mr Kadhimi has navigated Iraq’s politics on the front line of the broader confrontation with Iran, and played his cards wisely, said Dr Robert Satloff, executive director of The Washington Institute and an expert on US Middle East policy.

“His stock is very high in Washington right now.”

Long caught in the middle of conflicts between global and regional powers, and still rebuilding from the invasions of the US and Islamic State in Iraq and Syria (ISIS), Iraq hopes to ratchet down tensions that affect it directly.

Mr Kadhimi is also seeking to strengthen his role on the international stage, even as he navigates internal politics in Iraq, where he is pulled between powerful competing parties.

In an online interview with the Beirut Institute on Wednesday, Iraqi President Barham Salih acknowledged that Iraq had hosted talks between Iran and Saudi Arabia “more than once”.

He said he saw signs of a defusing of tensions between regional powers including Iran, Turkey and Arab countries.

“For Iraq to be able to play that convenient role between these regional actors is important,” he said. “Instead of Iraq being a source of instability let it be the common bridge.” The discussions, which have involved intelligence officials, began under former prime minister Adel Abdul Mahdi but have intensified under Mr Kadhimi.

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Several rounds are planned, with the first set mainly used to test the waters for future rapprochement, a senior Iraqi official said, speaking on condition of anonymity to discuss confidential conversations.

“The US is pushing its Gulf allies to talk directly to Iran,” said Dr Renad Mansour, a senior research fellow and project director of the Iraq Initiative at Chatham House.

“That’s part of the two-track approach that Biden is pursuing to get all sides involved in the process.”

The State Department did not respond when asked to comment on Iraq’s role as a mediator. Spokesman Ned Price on April 22 referred questions about Iraq’s role to Baghdad and Riyadh.

Back channel

Regional and global concerns converged this week with the visit of a delegation of senior US officials to the Middle East, meant to ease allies’ concerns over Mr Biden’s bid to rejoin the nuclear deal.

Gulf Arab states have long said they should be involved in diplomacy on Iran at a global level for any deal to be sustainable.

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Iran’s Foreign Minister Mohammad Javad Zarif welcomed Iraq’s role during a visit to the country last week and said Teheran wanted to see Baghdad become a more “pivotal” actor in regional matters.

If the Vienna talks fail, Iran-backed militias will act up in the region and Iranian hardliners will continue to resist the deal, said Dr Dina Esfandiary, a senior adviser in the Middle East and North Africa team at the International Crisis Group.

The Gulf Arabs and Iraqis are trying to pre-empt that by conducting their talks now, she said.

Saudi Arabia and Iran both want to end the regional crises, according to the senior Iraqi government official.

Teheran is under increasing economic pressure from sanctions imposed by the Trump administration, while Saudi Arabia’s top concern is mounting attacks from Iran-backed Yemeni fighters, a second person close to the Iraqi government said.

Iraq has found Saudi Arabia more open to dialogue with Iran and thinks Mr Kadhimi is a factor in that, the senior Iraqi government official said.

The UAE also takes that view, trusting Mr Kadhimi to communicate with them on Iran, a person familiar with the UAE government view said.

Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman, said last week that the kingdom was working to resolve its differences with Iran, in comments that referred to an unspecified regional effort.

“We’re working today with our partners in the region to find solutions to these issues, and we hope to overcome them and have a good and positive relationship with them,” Crown Prince Mohammed told a Saudi television channel on April 27.

That is a dramatic reversal from his remarks on Iran in his last local television interview in 2017, when he accused Iran of trying to control the Islamic world and said the kingdom would take “the battle” to Iran, rather than wait for it to be in Saudi Arabia.

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