It looks the U.S.’s dominant power in the Middle East has reached its sell-by date. From As`ad AbuKhalil at consortium news.com:
The U.S. does not want to experience what Britain experienced in Suez in 1956: a watershed moment signaling its global decline.

Smoke rises from oil tanks beside the Suez Canal hit during the initial Anglo-French assault on Port Said, Nov. 5, 1956. (Fleet Air Arm, Imperial War Museums, Wikimedia Commons)
The announcement in China on Friday of the resumption of relations between Saudi Arabia and Iran (after a 7-year freeze) caused a stir in Washington with U.S. mainstream media underlining the rise of China’s diplomatic role in the region at the expense of the U.S.
The U.S. has consistently aborted diplomatic initiatives of its allies and adversaries alike. China, on the other hand, emphasized that the cornerstone of its policies in the region is peace and diplomatic relations, in clear contrast to U.S. and Western roles in launching wars and instigating conflict.
Iran has been calling for the normalization of relations with Saudi Arabia for a few years, but Saudi Arabia snubbed all those initiatives. The Saudi government has been trying to win a brutal war in Yemen, which basically, and paradoxically, brought Iran closer to the Saudi border by virtue of Houthi reliance on Iranian assistance in the face of Saudi savagery.
The Iraqi government (through its Shiite component) has been mediating between Saudi Arabia and Iran for a few years. The Shiite political groupings in Iraq are fully aware that a rapprochement between the two countries would reflect favorably on the relations between Sunni and Shiite political grouping in the country.