The agreement between Saudi Arabia and Iran to restore diplomatic relations is expected to have an impact on Iraq and its various factions. Political circles are waiting to see what that impact will be, while head of the Sadrist movement, cleric Moqtada al-Sadr awaits the right opportunity to declare that he is coming out of political retirement. Iraqi sources said the settlement is encouraging Prime Minister Mohammed Shia al-Sudani to “tighten his relations with armed Shiite factions”. Meanwhile, decision-makers in Baghdad, most notably the pro-Iran Coordination Framework, are adjusting with and seeking to benefit from the calm that has prevailed after the Saudi-Iran deal was announced earlier this month. Sudani has received “regional encouragement” to contain the factions. This will probably lead to a change in balances of power among Shiite forces in Iraq, possibly even lead to new alliances in the next parliamentary elections, predicted the sources. It remains to be seen whether Sadr has the cards that would allow him to rein in his rival, the Coordination Framework, which has become a force to reckon with in Iraqi politics. Sources close to Sadr believe that the regional settlement will not have a long-term impact in Iraq. “The cleric is focusing his attention on reading the internal scene and waiting for his moment to act to create a new political factor in the coming phase,” they explained. Amid the speculation, the ambassadors of Saudi Arabia, Iran and Syria to Iraq met in Baghdad last week. A trusted told Asharq Al-Awsat that media close to Tehran received “instructions to cease attacking Gulf countries and figures.” It added that the instructions also called for avoiding escalation and fueling tensions over regional issues, such as the situation in Yemen. Also last week, the Baghdad and Erbil governments reached an agreement over the payment of salaries of Kurdistan Region employees. Informed sources said the agreement was part of a deal “approved by the Coordination Formation and a positive consequence of the settlement between Saudi Arabia and Iran.” Framework MPs said the agreement would pave the way for a political alliance at the expense of the Sadrist movement. Other sources revealed that Erbil received “guarantees from regional powers to resolve its situation in Iraq and the region and to seize the opportunities created in wake of the deal between Riyadh and Tehran.” A Shiite political source told Asharq Al-Awsat that the Framework is prepared to “consolidate new rules for political life in Iraq and that the leaders of its parties believe the situation is very ripe to carry out what is necessary.” However, he believed that Sadr “will not allow the Framework free reign away from his influence,” predicting that the cleric may soon return to political life. Sadr had recently ordered prominent members of his movement against traveling abroad during the holy fasting month of Ramadan because they needed to be present at “very important meetings.”