The kingdom severed ties with the Islamic Republic in 2016.
Saudi Arabia and Iran reached an agreement “in principle” to reopen consulates in the two countries and an announcement over the restoration of ties is expected within weeks, an AFP report said.
“They, in principle, have reached an agreement to reopen consulates… and I think an announcement of normalisation of ties may come in the next few weeks,” a foreign diplomat residing in Saudi Arabia told AFP on Sunday.
Earlier this month, Saudi Arabia confirmed it held a fourth round of talks with Iran’s new administration on 21 September.
Iran’s Foreign Ministry Spokesperson Saeed Khatibzadeh also confirmed the two countries held recent talks, the first to take place since the election of Iran’s new president Ebrahim Raisi.
“There have been good discussions on bilateral issues & good progress on Persian Gulf security. Since president Raisi taking office, messages have been exchanged at an appropriate level,” said Khatibzadeh in a previous statement.
Commenting on the latest round of talks, the foreign diplomat said the two regional powers were “on the verge” of agreeing “to ease tensions between them and the [diplomatic] proxy war in the region”.
“Saudi Arabia is interested in ending the conflict in Yemen…which has cost it billions of riyals,” the foreign diplomat said.
Since 2015, Riyadh has led a military intervention to push back Houthi rebels and reinstate the government of Abedrabbo Mansour Hadi after the rebel group overran all government institutions in Sanaa in 2014.
Six years on, at least 233,000 Yemenis have been killed, among them 131,000 of whom died as a result of malnutrition, lack of healthcare and medicine.
Saudi Arabia and Yemen’s internationally-recognised government have long accused Iran of backing the Houthis with weaponry and drones, though Tehran says it only provides the rebel group with political support.
The kingdom cut off relations with the Islamic Republic in 2016 after Iranian protesters stormed Saudi diplomatic sites following Riyadh’s execution of popular Muslim scholar Sheikh Nimr al-Nimr.
Strained relations further dwindled following the election of former US President Donald Trump, who openly favoured Riyadh’s leadership in its confrontation with Tehran.
Since Qatar and Saudi Arabia restored diplomatic ties on 5 January, Doha has expressed its willingness to mediate between the kingdom and its regional rival.
During the Gulf Security Forum on Wednesday, Qatar’s Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani said his country is encouraging positive momentum between the two countries amid reports of talks to ease tensions.
“Our aim is to reach a regional security understanding between the GCC and Iran. Iran is our neighbour, Iran is a player in our region and we cannot deny it,” he said, reiterating the importance of engaging with the Islamic Republic.