The Yemen war is about to come to an end. A Saudi official admitted this week for the first time since 2016 that Riyadh is in talks with the Houthi rebels. The talks have surfaced despite the Houthis being in charge of the capital Sanaa and the other most populous parts in Northern Yemen, which indicates that the Saudis are coming to terms with this status quo. The radical approach of effectively flushing the Houthis out of the north has been abandoned. The new approach of accepting the Houthis as part of the new post-war reality in Yemen, on the other hand, is much more sophisticated.

Saudi Arabia seems more open to some kind of coexistence with the Houthis in north Yemen through taking control over them from Iran. After signing the Riyadh power-sharing agreement between the separatist Southern Transitional Council and the UN-recognised government in Aden, Saudi Arabia and the UAE seem to be ready to move on to the next phase of their gouty war in Yemen.

Instead of the endless fighting, Saudi Arabia is trying to convince the Houthis to sever ties with its regional rival, Iran. After all, all the Houthis want is legitimacy of their new strategic posture in Yemen. This, in their view, must be cited in a similar power-sharing agreement that guarantees their share in a federation-like new system that includes president Abedrabbo Mansour Hadi’s government and separatists in the south.

The Saudis are quite right to adopt this strategic shift in their policy. After almost five years of war, which resulted in more than 100,000 victims, the worst humanitarian crisis in the world, and has damaged the country’s image on the world stage, a change was desperately needed.

But these are not the only catalysts behind this change.

The attack on the Saudi Aramco oil installations in September, which knocked out half of the Kingdom’s production, was a tipping point. This week, Aramco launched an initial public offering (IPO) to be listed on the local stock market, abandoning Mohamed bin Salman’s original plan to list it on overseas markets. The escalation with Iran began to have a direct effect on the Saudi economy.

Moreover, the Yemen war is historic as it exposed Saudi Arabia’s national and geopolitical weaknesses. Besides the big holes in its defence strategy, Saudi Arabia has found itself vulnerable on an unprecedented level. Throughout the last two years (especially after Bashar al-Assad had appeared to be heading towards a decisive victory over his opponents in Syria) Iran has been clenching its fist on Iraq, the Levant and Yemen. This means effectively flanking Saudi Arabia from the north and south.

The overlap of strategic lines in the vast area between the Red Sea, the Persian Gulf, the Mediterranean Sea in the north and the Gulf of Aden in the south, draws an abstract inverted pyramid. The base sits on Iran’s “strategic corridor” between Tehran and Beirut, and the head stands at the Yemeni capital Sanaa.

Saudi Arabia (and most of the other smaller Gulf nations) have now been taken hostage in this fight. It is quite fair to say that the Saudis and their allies in the UAE have been left completely alone to stand up to Iran’s expanding influence. Officials in the two countries feel extremely exposed due to Trump’s failure to assert any solid security guarantees from the US. The Arab community as a whole seems to be out of sight, and there is no appetite, in countries like Egypt, for example, to throw their weight behind some Arab fraternity against the “Persian hegemony,'' as many in the Gulf like to call it.

The results look grim. The misery of the Arab world, under the hypothetical Saudi leadership, recalls the sick man of Europe doomsdays of the Ottoman Empire. A series of popular uprisings and civil wars exhausted the region and gave Iran a free ticket to take on its Sunni rivals at an unprecedented pace and scope.

But it is only the ongoing second wave of these uprisings that can pave a way out of desperation for Saudi Arabia.

While Iran seems occupied with trying to find a way to quash relentless protests which form a direct threat to its long-maintained clout in both Iraq and Lebanon, its grip on the Houthis is loosening. The crippling US sanctions, which Trump reimposed on Iran last year after pulling the US out of the nuclear deal, leave no room for the Ayatollahs to step in with a plan to prop up their Shia allies in Yemen, Lebanon or Iraq (so long as Iran doesn’t consider a military invasion to crush the uprising in Baghdad and other cities in the south, which is still on the table).

Saudi Arabia, on the other hand, still holds huge economic sway. Through a generous economic package (similar to the economic incentives in the south as part of the Riyadh agreement), the Saudis ought to take a step ahead of the Iranians before holding any talks with Iran through the Pakistani PM Imran Khan or president Emmanuel Macron’s mediation initiatives. After all, holding direct talks with the Houthis has always been the US way forward to stop the war.

Shrewd as this approach may look (highly dependent on whether it will actually pay off) the Saudis are moving alone into uncharted waters in Yemen after the drawdown of the Emirati troops earlier this year.