Saudi Arabia has reopened its embassy in the Iranian capital of Tehran. The Iranian embassy in Saudi Arabia's capital of Riyadh resumed operations in June.

The foreign ministers of the two countries announced the reopening of the embassy at a news conference in Riyadh on Thursday.

The two nations, which follow different branches of Islam, had cut diplomatic relations in 2016 as they competed for influence in their region. In March, Tehran and Riyadh agreed to restore ties in an agreement mediated by China.

The new Iranian ambassador to Saudi Arabia, Alireza Enayati, spoke with NHK last month before he took up the post. He indicated that Iran will work to improve relations with Gulf nations.

The ambassador said the two countries are aiming to build a bilateral relationship and to make a regional and global impact as well.

The envoy also expressed hope that the idea of security based on economic development and cooperation will be established in the Gulf region.

Riyadh is also seeking better ties with Israel with the help of the United States. It is still unclear whether the normalization of Iran-Saudi relations will lead to regional stability.