Arian
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Iran is ruled by a theocracy? I mean I don't want to respond negatively to your comment, but Saudi Arabia is an absolute theocratic monarchy. It's one thing that Americans call Iran a theocracy, but it's a whole other thing that Saudi Arabia complains about Iran being a theocracy.I think this goes both ways. I don't see any changes from Iran's part as long as Khamenei is in power. MbS is merely a reaction to the status quo since 1979. I have always claimed that Iran, after toppling the Shah in 1979, instead of reaching out to its Arab neighbors and trying to find common solutions, was more busy trying to export the "Islamic Revolution".
A lot of it is due to internal Iranian politics as well. After the Shah was toppled (the most pro-US ruler in the region) the new regime (Mullah's) had to create an opposite political reality where everything Western was evil and bad and nations with cordial ties to the West, were automatically an enemy. Case in point the view of KSA/GCC from the Iranian Mullah's in power.
That and simple geopolitics and the fact that Iran is ruled by a theocracy that sees itself as the sole legitimate Islamic representative in the region and KSA until the reforms recently (ironically by MbS) was seen as the "Sunni equivalent" of Iran.
But in reality the proxy war/conflict is nonsense. Iran won't ever gain the upper hand in the Arab world, at most amongst fringe Shia Arab movements such as Hezbollah in tiny Southern Lebanon or Iraqi Shia militias allied to Tehran, and likewise KSA/Arabs have no territorial ambitions in Iran (KSA is bigger than Iran alone let alone the entire Arab world which is the size of Russia from the Atlantic to the Arabian Sea/Indian Ocean) so it is nothing more than a power struggle mixed with some imaginary fairytales of Arabs and Persians always being enemies (which was/is not the case at all - in fact for the fast majority of recorded history relations were normal).
I think this relationship (KSA-Iran) is the most misunderstood by both people in both KSA and Iran of any relationship. The countries are neighbors but the ignorance dominates the perceptions of both people. The more you dig into the ground realities, the more you realize the closeness and here I am not even talking about the Iranian Arabs.
A complicated matter much like Syria itself.
Our relations improved greatly during the presidency of Rafsanjani, even though Khamenei was the Supreme Leader at the time. Factually speaking, the reformists in Iran have always tried to have good relations with Saudi Arabia and they have a soft stance against the US and Europeans as well. So, it was expected that during the Rouhani administration, our ties with Saudi Arabia and our other Arab neighbors in general would improve as it was the case during Rafsanjani and Khatami. Rouhani tried to approach Saudi Arabia at first but Saudis did not show any interest. The only thing that was different this time was a semi-coup by a young, ambitious man who is trying to follow the same model that Shah envisaged for Iran in 1970s.
Now here is the situation in the Middle East: The Europeans and Americans detest Muslims and Middle Easterners in general. They view Iranians, Turks and Arabs similarly and the only reason that they are siding with one side against the other side is because their interests dictate that. They are creating chaos everywhere in our region, stunting the development of the region and provoking us against each other to keep the status quo. This is why Iranians and Arabs should unite. It is about nothing but common interests.