Iran reopened its embassy in Saudi Arabia on Tuesday, seven years after they severed ties in 2016. The ceremony was held inside the embassy's compound in Riyadh, the capital of Saudi Arabia.

Representatives of Iranian and Saudi foreign ministries attended the ceremony. Iran's consulate general in Jeddah and its representative office with the Organization of Islamic Cooperation will also be reopened a day later, according to the Iranian foreign ministry.

The re-opening of the Iranian embassy in Saudi Arabia has been regarded as a positive move in the Middle East by many.

"I think any time two countries, especially two countries with so much influence in that area, in the Gulf, are engaged in open and constructive dialogue, it is helpful to the region," said Stephane Dujarric, the spokesperson for UN Secretary-General Antonio Guterres, at a daily press briefing on Tuesday.

The major step toward reconciliation comes three months after the two sides agreed to restore bilateral ties in a deal brokered by China.

In March, Saudi Arabia and Iran reached a groundbreaking agreement in Beijing to resume diplomatic relations and re-open their embassies and missions. Since then, the two countries have continued to advance toward the goal of restoring diplomatic ties.

A positive shift

Ali Al-Ahmed, director of the Institute for Gulf Affairs, hailed China's contribution in bringing peace and prosperity to the region, saying this is the first major power to achieve this.

"The Chinese model is not only beneficial for China in terms of increasing commerce in the region, but also benefits the people in the region, and governments in the region," he told CGTN.

Since the United States sent troops to the Gulf four decades ago, Al-Ahmed said, the economic resources of the region have been focused on security and weaponry instead of development. He welcomes the shift brought by China and believes more moves of restoring regional ties will follow.

In terms of regional security concerns, Al-Ahmed said it would be better for the Gulf countries to have a regional agreement for security instead of having foreign powers patrol the Gulf.

According to the Emirati foreign ministry's statement on May 31, the United Arab Emirates (UAE) withdrew its participation in the U.S.-led maritime coalition Combined Maritime Forces (CMF) two months ago. Experts predicted that more countries in the region will follow suit.

More trade opportunities

Mohammad Marandi, an Iranian American academic and political analyst, told CGTN that the embassy's reopening is a significant development because the U.S. has been able to control much of West Asia through keeping countries of the region divided.

Marandi pointed out that the Gulf region is the center of the world's energy, and all countries in the region are involved one way or another in the rapprochement, creating opportunities for investment and trade.

"The countries have huge potential when it comes to cooperation. And because of the investment in ports and railways in the region, I think in the years to come, the trade could increase dramatically," said Marandi.

His opinion was echoed by Iranian analysts who said regional security and stability is the basis for economic development, and the restoration of diplomatic relations provides a new opportunity for deeper cooperation.

A positive impact has been seen on the markets as well. Qeshm International Airport in Iran has announced that they will begin the first direct flight from Qeshm to Jeddah in June.