There are three major dimensions to IRAN-SAUDI conflict, geo-strategic, sectarian, and historical. Iran-Saudi remained persistent geo-strategic rivals in Persian Gulf politics existing since the 1980s. Prior to 1979, Iran remained a closer policing state/ally of USA, ensuring the security of Arabian Sea in the Strait of Hormuz, but after 1954 there is a decline in US-Iran relations which turned to zero-sum relations after 1979 due to Iranian revolution which resulted in an end to the kingship and US ambassador got imprisoned. Saudi-US relations grew after the patro-dollar agreement.
By default, Iran is a Shia country with a Sunni minority whereas KSA is a Sunni state with Shia minority areas mostly. There is a stronger role of religion in both states. In both states, spiritual leader matters a lot. In KSA there is enough space between the Wahab legacy and the kingship but in Iran, the supreme leader now is Khomenai whose consent is very important in all policy matters.
Gulf Co-operation Council is an organization of Arab countries for their economy under the leadership of KSA. But with the passage of time, this became an anti-Iran bloc because it has all Sunni nations as its members. It helped Saudi Arabia to subjugate Iran.
These sanctions resulted in regional and world isolation towards Iran and their exports/trade reduced.
Iran steadily rose after 2003 due to US intervention in Iraq, toppled down Saddam Hussein regime, who was the biggest military rival of Iran, and Noor-ul-Maliki came to power (a Shia dominant government) and relations with Iran normalized.
By default, both are sectarian states. Internal and external policies remained dominant by the sectarian factor. After 1979, both states adopted sectarian policies to over-power each other. The 1979 revolution gave rise to the revolutionaries and Tehran started supporting the revolutionaries across the Persian Gulf on Sectarian lines.
Afghan jihad was global in nature with three key players:
- Saudi Arabia
Saudi Arabia now adopted Jihadist policy and funded madrassas, both Iran and KSA now expanded their own sides of Islam. This sectarian rift between the two countries affected the overall Uma and Pakistan in particular, which also gave rise to the sectarian divide in Pakistan too.
Sectarian violence in Pakistan is rampant centering from Jhang, Parachinar, Quetta, Hangu, Karachi, and Rawalpindi to Gilgit, with declared sectarian terrorist organizations.
IMPORTANCE OF THE TWO FOR PAKISTAN:
KSA is of immense political, economic and spiritual importance for Pakistan. While GCC is important for Pakistan, so antagonizing KSA means antagonizing GCC. It was obvious in the fact when Pakistan refused Saudi Arabia to send its troops to KSA for Yemen, in return UAE gave space to India.
Whereas Iran has more of spiritual importance than political to Pakistan because of the presence of Shrines and shares a long territorial border with Iran, also IP can become a major energy booster to Pakistan.
But, the persistent tilt of Pakistan towards KSA, always antagonized Iran and made Iran tilt more towards India, eventually leading to the Gawadar-Chahbahar problem.