With the official end of U.S. combat operations in Iraq, what bodes for Iraq's future in terms of its relations to other nations in the Middle East? One useful way to examine this question is through the lens of what Daniel Pipes describes as the present "Middle Eastern Cold War."
This new Cold War represents the current ideological division in the Middle East between the "revolutionary bloc," led chiefly by Iran, Syria, and more recently Turkey, and the "status-quo bloc," led by Saudi Arabia and Egypt. While most Sunni Arab states align themselves with the "status-quo bloc," there are notable exceptions in that Qatar and Oman back the "revolutionary bloc," while Libya simply sits on the sidelines.
The Middle Eastern Cold War has manifested itself in recent years in several ways, including the ongoing tension in Lebanon between Saad Hariri's coalition government and pro-Syrian factions like Hezb'allah, the contest between Fatah and Hamas for the Palestinian leadership, and the conflict in Yemen between Iranian-backed Shi'a Houthi rebels and the Saudi-backed central government of Ali Abdullah Saleh.
However, the most recent sign of this Cold War could well lie in Iraq as Saudi Arabia and Iran jostle for influence. With the ongoing political stalemate that has created a power vacuum, it is Saudi Arabia's hope that the current Shi'a Prime Minister Nouri Al-Maliki does not retain his position in power for fear that he will tilt Iraq towards Iran's regional bloc. Meanwhile, Iran not only wishes for him to remain as prime minister, but also hopes for Maliki's State of Law (SOA) coalition and the Sadrist Iraqi National Alliance (INA) to form the backbone of a new government, whereas the U.S. views a coalition between SOA and Iyad Allawi's Iraqiya bloc as the best option.
Indeed, on repeated occasions, Saudi officials have been open in expressing their dislike for Maliki. For instance, in May, former Saudi intelligence chief Turki Al-Faisal accused Maliki of attempting to "deny the Iraqi people their legitimately elected government," meaning that Allawi should be given the right to form a government. In addition, the Saudi government has made a series of goodwill gestures, including receiving several Iraqi politicians such as Allawi and the president of autonomous Iraqi Kurdistan Massoud Barzani on visits to Riyadh in an attempt to contain Iran's influence in the country. Winning over the latter is viewed as especially important since the Kurdish parties are reported to have extensive economic ties with Iran that date back at least two decades, above all in the smuggling of oil and other refined petroleum products to Iran.
At the same time, Saudi Arabia has been trying to take advantage of recent, tougher sanctions against Iran to expand its influence in Iraq through economic cooperation with the country. For example, in July, a Saudi airline launched the first direct flights to Iraq in almost twenty years, having been suspended in the aftermath of Saddam Hussein's invasion of Kuwait in 1991. Furthermore, Saudi food firms like Almarai have become involved in the export of foodstuffs to Iraq via Kuwait and Jordan. Simultaneously, however, Saudi Arabia is concerned that Iraq's aspiring potential to produce some 10-12 million barrels of oil a day could dislodge it from its position as a leader of the OPEC cartel. Hence, cooperation in the field of oil production is nonexistent.
Despite these measures undertaken by Saudi Arabia, Iran and the "revolutionary bloc's" influence on Iraq is all too evident. Iran has repeatedly urged the Shi'a parties in Iraq to put aside their differences and form a ruling Shi'a-led government, fearing that allowing Allawi's Iraqiya bloc to form a government will lead to a resurgence of Sunni minority rule and Baathism. Also noteworthy, besides Kurdish smuggling of petroleum to Iran, are the already close economic ties between the key players of the "revolutionary bloc" and Iraq that will likely grow in the future as Iran, Turkey, and Syria continue to restrict Iraq's water supplies through building dams on the Tigris and Euphrates and diverting water for irrigation projects. This could create future "oil for water" trade schemes. Moreover, there are the Iranian-backed "Special Groups" like the Kataib Hezb'allah that can resort to insurgent-style attacks to quash any efforts by the Sunni Arabs to exert their diminished political influence and tilt Iraq towards the "status-quo bloc."
Thus, it is possible that Iraq will emerge as a sort of theatre of proxy warfare between Saudi Arabia and Iran in the near future. Nevertheless, it is improbable that the struggle will be prolonged, as Iran, the leader of the "revolutionary bloc," and most of the Shi'a population of Iraq share the goal of ensuring Shi'a dominance in the country, such that Iraq, under a Shi'a-led government, will likely become an auxiliary for the "revolutionary bloc." This outcome becomes much more conceivable when one considers that Iran could well have nuclear weapons in the next few years, which will make it much harder for its rivals to contain Iranian influence in Iraq.