In “Mid-East Coup: As Russia Pounds Militant Targets, Iran Readies Ground Invasions While Saudis Panic,” we outlined what we think is likely a close approximation of Moscow and Tehran’s plan for the region. Here is a brief summary of what we said: Putin looks to have viewed this as the ultimate geopolitical win-win. That is, Russia gets to i) expand its influence in the Middle East in defiance of Washington and its allies, a move that also helps to protect Russian energy interests and preserves the Mediterranean port at Tartus, and ii) support its allies in Tehran and Damascus thus preserving the counterbalance to the US-Saudi-Qatar alliance. Meanwhile, Iran gets to enjoy the support of the Russian military juggernaut on the way to protecting the delicate regional nexus that is the source of Tehran’s Mid-East influence. It is absolutely critical for Iran to keep Assad in power, as the loss of Syria to the West would effectively cut the supply line between Iran and Hezbollah. The same dynamic is playing out in Iraq. That is, Iran is fighting ISIS via various Shiite militias just as it’s fighting the Saudi-led coalition in Yemen via the Shia Houthis. It is thus extremely significant that Baghdad has agreed to share intelligence with Syria and Russia, as that effectively means the Iran-backed Shiite militias battling for control of Iraq will enjoy the support of the Russian military. This is nothing short of a Middle Eastern coup, as Iran looks to displace Saudi Arabia as the regional power broker and as Russia looks to supplant the US as the superpower puppet master. Do not expect Saudi Arabia and Israel to remain on the sidelines here. Make no mistake, the stakes couldn't be higher for Riyadh. Assad's ouster would have removed a key Iranian ally and cut off Tehran from Hezbollah. Not only would that outcome pave the way for deals like the Qatar-Turkey natural gas line, it would also cement Sunni control over the region on the way to dissuading Tehran at a time when the lifting of crippling economic sanctions is set to allow the Iranians to shed the pariah state label and return to the international stage not only in terms of energy exports, but in terms of diplomacy as well. Just about the last thing Riyadh wants to see ahead of Iran's resurgence, is a powergrab on the doorstep of the Arabian peninsula. The situation is made worse by what's going on in Yemen. The Houthis are backed by the Quds Force which means that the battle between the Saudi-led coalition that also includes Qatar and the UAE, is simply another manifestation of Riyadh attempting to rid the area of Tehran's influence. Here's a clip which purports to show the Saudi-led coalition bombing the Houthis: One must also factor Iraq into the equation. For all intents and purposes (and the US knows this), it's lost to Tehran. IRGC commanders have deep political ties in Baghdad and control the various Shiite militias battling alongside the Iraqi regulars. Because the main adversary is ISIS, neither the West nor its Sunni allies can protest unless they are willing to admit that they have at one time or another assisted the fighters that went on the become Islamic State. In short, Riyadh is in a tough spot. Going from Yemen to Syria would have been an escalation as things stood three months ago. But now, the Saudis may have missed their window. Entering the war in force as they've done in Yemen would mean direct confrontation with the Russians and Iranians and that would represent a monumental roll of the dice. That said, the Saudis can ill-afford to sit on the sidelines and watch as Iran becomes the new regional power broker which is why, as Bloomberg noted earlier today, Riyadh will likey step up its support for the various proxy armies fighting for control of Syria. Here's more: The principal risk for Russia is that Saudi Arabia, Turkey and Qatar, who support armed groups fighting Assad’s forces including radical Islamists, will sharply increase their military supplies in response to the Russian intervention, said the Russian officials. “The Russians have not seen the heat of Syria yet,” said Mustafa Alani, the Dubai-based director of National Security and Terrorism Studies at the Gulf Research Center. “The regional powers can give the Russians limited time to see if their intervention can lead to a political settlement -- if not, there is going to be a proxy war.” Of course it's already a proxy war and has been for years, but with the Quds Force and Hezbollah advancing on Aleppo, time is running out for Riyadh and Doha to make a move and on Monday, Saudi foreign minister Adel al-Jubeir stepped up the rhetoric, effectively telling the Iranians to stay out of the neighborhood. Here's more via AFP: Saudi Arabia's foreign minister on Monday urged Iran to stop "meddling" in the affairs of the kingdom's neighbours, warning that Riyadh stood ready to confront Tehran's actions. "We wish that Iran would change its policies and stop meddling in the affairs of other countries in the region, in Lebanon, Syria, Iraq and Yemen," Adel al-Jubeir said at joint press briefing with his German counterpart Frank-Walter Steinmeier in Riyadh. "It is difficult to have positive relations" with Tehran, "when Saudi Arabia and its people are the target of continuous aggression" from the kingdom's arch rival, said Jubeir. Saudi Arabia supports rebel groups who are fighting to oust Assad in the Syrian conflict. "We will make sure that we confront Iran's actions and shall use all our political, economic and military powers to defend our territory and people," said Jubeir. He accused Iran of acting like a "colonising state" in Syria, and demanded it pull its fighters out of the country and stop supplying arms to Assad. Otherwise, "it will be difficult (for Iran) to play a role" in finding a solution for the conflict in Syria, he said. Now, there are a number of amusing things about those statements. First, it's not as though Iran wasn't invited to Syria. Bashar al-Assad most certianly welcomes the presence of the IRGC and as mentioned above, the Shiite militias in Iraq are battling alongside the Iraqi army, while Baghdad has just inked an intelligence sharing agreement with Tehran. Throw in the Quds deep political connections and it would be difficult to somehow say that the Iranians aren't welcome in Iraq. So this idea of Iran being a "colonizing state" is a bit tenuous. Also, while Iran may have been invited to Syria, one would be hard pressed to say the same thing about the various extremists groups backed by Riyadh and Doha. Furthermore, it's rather strange for the Saudis to make statements like "it will be difficult for Iran to play a role in finding a solution to the conflict." We hate to be the bearers of bad news, but Iran is already playing a role in finding a "solution" - they're summarily wiping out the groups funded by the Saudis on the way to restoring the regime. If anyone is going to have a "difficult" time playing a part, it's the Saudis. On the "bright" side, the US military industrial complex looks likely to a boost from it all. Here's Bloomberg: The Pentagon is notifying Congress of a planned sale to Saudi Arabia of as many as four Littoral Combat Ships for $11.25 billion, according to a U.S. official, as the U.S. works to bolster defenses of its Gulf allies after the nuclear deal with Iran. The ships are part of a planned modernization, replacing older U.S.-built vessels in the Royal Saudi Navy’s Eastern Fleet. The sale also begins to deliver on President Barack Obama’s pledge to improve the military capabilities of the U.S.’s Arab allies. Saudi Arabia and other nations in the Gulf Cooperation Council sought such reassurances before acquiescing to the U.S.-led deal with Iran on its nuclear program. The Saudis and other Sunni Arab nations were unnerved that, in exchange for curbing its nuclear program, their Shiite rival Iran will win relief from crippling economic sanctions and access to billions of dollars in frozen funds. Russia’s military intervention in Syria alongside Iran to back President Bashar al-Assad has further raised sectarian tensions in the region. The ships sold to the Saudis will be the first major export of a new, U.S.-built surface naval vessel in years, the U.S. official said. The Littoral Combat Ship, designed for operations in shallow coastal waters, is made in two versions by Lockheed Martin Corp. and Austal Ltd. The Saudis have indicated they’re interested in the Lockheed ship, according to previous reports, including by Defense News. The takeaway here is that it's gut check time for the Saudis. With Iran set for a return to the world stage and with a resurgent Russia backing Tehran's regional power grabs, Riyadh (and Ankara, and Doha) must decide whether to i) step up support for Sunni extremists proxy armies and risk being publicly derided by Putin for supporting terrorism, ii) intervene directly as in Yemen and risk starting a world war, iii) do nothing and watch Iran become regional power broker. Get the popcorn...