The upheaval in the Arab world has challenged the traditional roles of the two leading powers in the Gulf, Saudi Arabia and Iran. Both nations must now reassess their relationships with regional actors. For both nations, long-standing alliances are at stake. While the upheaval in the Arab world holds both opportunities and risks for the Saudi regime, Iran, with the support of the Assad regime, is increasingly finding itself in quite a strategic quandary. Further developments in the region will significantly define the future balance of power in Saudi Arabia and Iran.