2016 was not a good year for Saudi Arabia. Sharply lowered oil prices sparked a domestic financial crisis that is forcing the country to restructure its economy. Saud Arabia’s bitter struggle with Iran for regional hegemony has embroiled it in wars and political conflicts which it has been unable to win, leaving Saudi Arabia no alternative but to admit failure or compromise. If 2016 was bad, 2017 threatens to be worse.

Saudi Arabia closed out 2016 with a ceasefire in Syria and prospects for peace talks orchestrated by Russia and Turkey that significantly weakened Saudi-backed rebel groups and strengthened Iran’s key Middle East ally, Syrian president Bashar Al-Assad. Saudi Arabia’s only hope of influencing events in Syria is if either the rebels, jihadists who are not part of the ceasefire, or Al-Assad sabotage it for their own reasons. But even then, the fall of Aleppo, the rebel’s last major urban holdout, threatens to reduce the anti-Assad resistance to a largely rural insurgency.

Adding insult to injury Saudi Arabia was unable to block a candidate from becoming president of Lebanon who was supported by Hezbollah, the Lebanese Shi’a militia that helped Al-Assad regain the upper hand in the Syrian civil war. This forced Saudi Arabia to strike a deal. It tacitly agreed to the appointment of Michel Aoun, a close Hezbollah ally, and quickly invited him to visit the kingdom early in the new year.

Aoun, as part of the deal, appointed Saad Hariri as head of his government. Hariri is the son of Rafik Hariri, a Lebanese-Saudi businessperson and former prime minister who was murdered in 2005 allegedly by Hezbollah operatives. Saad Hariri, whose family conglomerate in the kingdom was hit badly by the financial crisis and needed to be bailed out, is beholden to the Saudi government. The deal ended a more than two-year long standoff between Iranian and Saudi-backed forces that left the Lebanese presidency vacant.

Sensitive to any challenge to its custodianship of Islam’s two holiest cities, Mecca and Medina, Saudi Arabia’s role is in the spotlight as it negotiates modalities with some 80 countries for the 2017 Hajj. Saudi Arabia and Iran failed to reach an agreement for the 2016 pilgrimage, leaving the Islamic republic without a quote for pilgrims and the kingdom’s management of the Hajj challenged.

…Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Wurzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a recently published book with the same title, and also just published Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario.