George Friedman in this article discusses the development of Saudi Arabia relations towards Iran. The article is drawn from Stratfor and can be viewed here.
It is important to note that both countries, Saudi Arabia and Iran, have been playing their foreign policy in foreign lands. Both countries have almost always avoided any major one-on-one conflict and their latest disputes have also taken place in the region via transnational identities.
First, the author argues his case about Iranian interest in influencing Iraqi policies. This reality has been later enforced in the view of Saudis after the United States administration decision to withdraw military troops from Iraq and as a result Saudis have stepped up their support for Sunni Muslim in Iraq trying to keep the balance Iran who has a much bigger leverage in the country.
Second, Iran has used a similar strategy, at least according to the Saudis, the author argues, to influence Shia uprising in Bahrain. This is another battle fought in foreign land and Saudis have played tough to send a message to Iran to stay away from meddling with the Sunni minority rulers in Bahrain. This was also another test played by Iran to try destabilize a Sunni ruled country in order to gain more influence and use it for their own advantage. At the same time, this Iranian game posed a test for the Saudis who responded with a military aid to suppress the revolt in Bahrain and send a clear message to Iran to keep its hands off from Bahrain.
At the same time, the author in the article discusses the U.S. support of Saudis in regards to Iranian latest plot to kill the Saudi ambassador to the United States. According to the U.S. Justice Department, the plot was instigated by the Iranian intelligence and both, United States and Saudi Arabia, held Iran government responsible for the plot. This sent a new shockwave to the Iran – Saudi relationship and the relationship between the two has hit a new low.