Clash of the theocratic titans
Each country has positioned itself as the Middle East's main embodiment and defender of one of the two major divisions of Islam, Sunnism (Saudi Arabia) and Shiism (Iran). Iran is, in fact, the largest and most powerful predominantly-Shiite country. There are several Sunni states in the region larger in population than Saudi Arabia (notably Egypt and Turkey), but Saudi Arabia defines its very identity based on a radical form of Sunni Islam, which other majority-Sunni states do not.
Arabia is a vast, extremely arid, barely-habitable region about one-third the size of the continental US, traditionally the wild frontier beyond the southern edges of the ancient birthplace of civilization in Mesopotamia (Iraq) and Syria. For most of its history it was poor and fragmented, inhabited by numerous tribes with no common identity beyond the Arabic language and culture, which never produced any sense of common nationhood. Aside from its brief unification in the time of Muhammad (which led to the conquest of most of the Middle East), the first unification of most of Arabia came with the foundation of the Saudi kingdom in 1932.
Oil was discovered in 1938, and in the 1960s and 1970s the monarchy gradually wrested control of this lucrative resource away from Western interests. Since then, oil wealth has allowed the regime to exercise influence far beyond what a country of its modest population size (28 million today) could normally do. This has mostly taken the form of spreading its extremist and puritanical brand of Sunni Islam as far afield as Pakistan and even Muslim communities in Europe. The rise of al-Qâ'idah, the Taliban, and militant Islamist groups in Europe owes much to Saudi influence and money.
The country's internal religious repression -- executions by beheading, prohibition of alcohol, women forbidden to drive and subject to strict rules on their clothing and social activity -- is sometimes thought by Westerners to be typical of the whole Middle East, but this is not true. Saudi Arabia is a radical exception. Most of the Middle East is far more modern and secular, despite the continuing presence of some hard-line Islamist groups in most countries.
More recently Saudi influence has been declining. Population growth has diluted the impact of oil income, while economic modernization and secularization have made other Middle Eastern countries less amenable to Saudi influence. But the biggest threat to the kingdom's position has been the rise of Iran.
Iran has been an international pariah since its 1979 Islamic revolution, but has nevertheless managed to win some influence. The Asad regime in Syria (dominated by Alawite Muslims, a sect derived from Shiism) has long been an Iranian (and Russian) client, and since the overthrow of Saddam Hussein, Iran has taken on a protective role over the Shiite majority in Iraq, especially since the rise of Dâ'ish, a mortal enemy of Shiites.
This influence has a massive weight of history behind it. If Saudi Arabia is one of the region's newest countries, Iran is one of the oldest; Iranian national identity extends back at least as far as the coronation of Cyrus the Great in 559 BC. Since then, a succession of Persian states and empires have often dominated much or most of the Middle East.
Last year's US-Iran nuclear deal set off loud alarm bells in Saudi Arabia. US support is the cornerstone of Saudi security; a US warming to Iran could threaten the kingdom's position as the premier US client state in the region. It's true that Iran is also theocratic and harshly repressive, and also supports extremists and terrorists beyond its borders; but the election of reformist President Rouhani in 2013 brought the promise of genuine change.
It's not clear why the Saudi regime decided to trigger a confrontation right now by executing al-Nimr, but I think this analysis has much truth in it. If the Saudi move was a panicky blunder by a declining power, it would hardly be unprecedented. But it cannot have been welcomed by the US, since it complicates both US-Iran relations and the fatuous "peace process" in Syria. Still, the Saudi regime may believe that its best option is to inflame tensions and hope that the US-Iran rapprochement is destroyed.
It might seem odd to view Saudi Arabia as a declining power. It still has oil wealth and, on paper, a strong military. But that military has shown itself to be far less impressive in fact. When Iraq invaded Kuwait in 1990, the Saudis immediately called in US forces to expel it, rather than dealing with the problem themselves. The recent Saudi intervention in Yemen seems to be turning into an expensive fiasco. Iran's military has suffered from years of sanctions, though that situation has forced the country to develop the ability to manufacture its own equipment, even tanks and submarines. How well either country's military would perform in a real war is hard to predict.
Both countries have potential internal sources of instability. Between 5 and 10 million of Saudi Arabia's 28 million people are foreign guest workers. Its oil is mostly near the Persian Gulf coast, an area near Iran and inhabited by a restless and repressed Shiite minority. Iran's population is much larger at 78 million, but up to 40% of those are members of various non-Persian ethnic minorities who have been integrated into the Iranian state for centuries but whose attitude toward it is difficult to assess. Both countries' populations, especially the young, chafe under the puritanical restrictions of their theocratic regimes. The Iranians, however, have been able to force some change by the mass protests of 2009 and by electing Rouhani; the Saudi state, an absolute monarchy, offers no such institutional path to change.
It seems clear, though, that Saudi Arabia is declining and Iran is inching back toward its historic dominant position. The US could, if it chose, hinder this evolution, but cannot stop it short of an all-out war, even if we decided it was in our interest to do so. Our best course is to prepare to adapt to it -- and accept that events will be driven mostly by internal developments in both countries, not by what we do.