Ever since Saddam Hussein’s fall in 2003, Iraq has been used as an arena of competition between Saudi Arabia and Iran. Proxy war, Iraq’s dependence on Iran, sectarianism, as well as Iraq’s exclusion from Arab countries remain issues stemming from the conflict between Riyadh and Tehran. Reconciliation between Iran and Saudi Arabia provides an opportunity for Baghdad to adopt a relatively neutral foreign policy, leading to the enhancement of diplomatic and economic relations, for Iraq’s benefits.