Middle Power Diplomacy in the Saudi-Iran Case: A PSIR Paper II Framework

Middle power theory sits inside a specific corner of the PSIR Paper II syllabus — under approaches to comparative politics and international relations, alongside realism, liberalism, and constructivism — and it is exactly the kind of concept UPSC likes to test through application rather than definition. The examiner rarely asks "what is a middle power?" A far more likely demand is a live case, with an instruction to evaluate what middle-power diplomacy achieved and where its logic broke down. Banafsheh Keynoush's analysis of Saudi Arabia and Iran's roles in enabling, and then failing to resolve, the Gaza war that followed the October 7, 2023 Hamas attack is precisely that kind of case — and it rewards being read as a theory-testing exercise rather than a current-affairs recap.

This piece is written for PSIR optional aspirants who need to convert a case study into an answer that demonstrates command of theory, not just awareness of headlines. The distinction matters because Paper II Section A explicitly tests "approaches to comparative politics and international relations," and a question built around Saudi-Iran diplomacy is as likely to ask you to apply middle-power theory as it is to ask about the Gaza conflict itself.

What middle-power theory actually predicts

Middle power theory, developed most influentially through the "niche diplomacy" framework, argues that states lacking great-power capability can still exercise disproportionate influence by concentrating limited diplomatic resources in specific issue areas rather than attempting to compete across the full spectrum of power projection. A middle power builds coalitions, works through multilateral institutions, positions itself as an honest broker or norm entrepreneur, and picks a narrow lane where it can lead — rather than trying to match a great power's military or economic weight directly. The theory's classic formulations assumed middle powers operating within a broadly permissive great-power order, using niche diplomacy to supplement, not substitute for, that order.

Saudi Arabia and Iran are textbook middle powers by capability — regional weight, real but bounded military and economic reach, no capacity to unilaterally impose outcomes on Israel or the United States. Keynoush's case study is valuable precisely because it takes two middle powers who are not like-minded partners but active regional rivals, each running its own niche-diplomacy strategy against the other, and asks what happens to the theory's predictions when that assumption of cooperative middle-power internationalism is replaced by zero-sum competition.

Saudi Arabia's niche diplomacy: institutional multilateralism

Saudi Arabia's niche lies in institution-building and normative leadership within the Arab and Islamic multilateral order. The clearest expression is the Arab Peace Initiative of 2002 — a Saudi-authored land-for-peace proposal offering Israel comprehensive Arab recognition in exchange for withdrawal from territories occupied in 1967 (Gaza, the West Bank, East Jerusalem, and the Golan Heights), grounded explicitly in UNSC Resolutions 242, 338, and 194. The initiative lost momentum after Hamas's 2006 election victory, but it remained the Arab world's reference framework for two decades, until the Abraham Accords of 2020 — signed nine months after the US assassination of Qasem Soleimani — offered Israel normalisation with fewer conditions and effectively sidelined it.

During the Gaza war itself, Saudi Arabia's niche diplomacy took institutional form: it worked through the Arab-Islamic Contact Group, supported US-Qatar-Egypt mediation, convened OIC channels, and in September 2024 built a Saudi-Norway partnership specifically to advance Palestinian statehood diplomatically. Riyadh's consistent position — a two-state solution, willingness to eventually recognise Israel, and institutional rather than kinetic pressure — is coalition-building and normative entrepreneurship in the purest niche-diplomacy sense. It is also, notably, a strategy that sidelined Iran within the very Arab-Islamic institutions Iran was trying to use.

Iran's niche diplomacy: proxy leverage as an alternative model

Iran's niche is structurally different, and this is where the case gets analytically interesting for a PSIR answer. Tehran's "Axis of Resistance" — Hamas, Hezbollah, the Houthis, Iraqi militias, and Afghan and Pakistani brigades — is a network built on asymmetric proxy leverage rather than institutional multilateralism. Iran calculated that this model could replicate its own 2006 precedent, when Hezbollah's war with Israel ended through regional diplomacy, Arab reconstruction funding, and Hezbollah's political survival, effectively converting military resilience into diplomatic standing. Iran hoped the 2023-25 Gaza war would follow the same script: Axis pressure across multiple fronts forcing Israel toward a negotiated de-escalation on terms favourable to the Axis and its one-state, no-recognition position on Palestine.

That calculation overestimated what the Axis of Resistance could deliver against a materially superior Israeli military response, and it ran alongside a parallel, more conventional layer of state-to-state friction — Iranian accusations of Saudi funding for Kurdish opposition groups, Israeli-Saudi joint investments in Azerbaijan and Central Asia, and the 2019 attacks on Saudi Abqaiq and Khurais oil facilities, which pushed Riyadh to build the Islamic Military Counter Terrorism Coalition in 2015 as its own counter-network. Iran's niche diplomacy, in other words, was proxy-network diplomacy dressed as public diplomacy: emergency OIC calls and rhetorical solidarity, backed by a resistance network whose battlefield capacity fell well short of its 2006 template.

Where the theory breaks down: the great-power-primacy conclusion

Here is the finding that should anchor a Paper II answer. Two structurally different niche-diplomacy strategies — Saudi institutionalism and Iranian proxy leverage — arrived at the identical outcome: both were sidelined when the United States brokered the first phase of the Gaza ceasefire in January 2025. Middle-power theory, in its classical form, does not fully anticipate this convergence, because it was built around middle powers supplementing a great-power order they broadly accepted, not around rival middle powers each betting that a different form of niche diplomacy could substitute for great-power leverage entirely.

The case therefore refines rather than simply confirms the theory. Middle powers can shape the parameters of a conflict — Saudi Arabia's institutional work kept a two-state framework alive as a diplomatic reference point; Iran's Axis of Resistance imposed real multi-front costs on Israel in Lebanon, Yemen, and Gaza simultaneously. But neither could convert that influence into an independently negotiated resolution. When Washington moved, both Riyadh and Tehran were negotiating within an outcome that great-power involvement, not middle-power diplomacy, ultimately determined. This is the core analytical payoff: middle-power diplomacy is real and consequential at the level of shaping conflict dynamics, but structurally insufficient at the level of resolving them when a great power's core interests — in this case, sustained US support for Israel — are engaged.

A Paper II answer that only narrates "Saudi Arabia did X, Iran did Y" is describing the case. An answer that shows how two opposite niche-diplomacy models converged on the same great-power-primacy outcome is applying the theory — and that distinction is usually worth the difference between a 10-mark and a 15-mark answer on the same facts.

Structuring a PSIR Paper II answer around this case study

A theory-application question built on this case rewards a specific architecture, not a chronological retelling of the Gaza war. A workable structure looks like this.

1. 1Define middle power and niche diplomacy in a line or two, citing the core claim: limited capability compensated for by concentrated diplomatic effort in coalition-building, institution-building, or mediation.
2. 2Identify the two niche-diplomacy models in the case — Saudi institutional multilateralism through the Arab Peace Initiative, OIC channels, and the Arab-Islamic Contact Group, against Iran's proxy-network model through the Axis of Resistance.
3. 3Show what each model achieved — Saudi Arabia kept a two-state framework alive and built coalition pressure through Norway and the Contact Group; Iran imposed real multi-front costs but could not replicate its 2006 Hezbollah-war outcome.
4. 4Identify the limiting condition — both were sidelined by the US-brokered January 2025 ceasefire, demonstrating that niche diplomacy shapes parameters without guaranteeing resolution when great-power interests are engaged.
5. 5Conclude with the theoretical refinement — classical middle-power theory assumes a permissive great-power order; this case shows what happens when middle powers compete against each other under a great power that remains decisive, not permissive.

This structure also transfers directly to GS-2 international relations questions on regional powers and conflict resolution, since the underlying analytical move — capability versus outcome, influence versus resolution — is the same one examiners reward whenever a question asks you to evaluate a regional power's diplomatic effectiveness rather than simply describe its foreign policy.

Aspirants preparing PSIR Paper II for the 2027 cycle should treat cases like this one as theory-testing material from the first reading, not as background reading to revisit later. Building that habit — reading every current case through the lens of the theory it is meant to illustrate — is a core part of how our PSIR 2027 optional course (/courses/psir-mains-2027/) structures its Paper II sessions, pairing thinker-and-theory recall with exactly this kind of applied, case-driven answer practice.