The message from Aaron David Miller, a former US Middle East adviser, will spark worry in the West with fears that a powerful Iran will intensify military tensions with the US.
A proxy war between Iran and Saudi Arabia has been fought in Yemen over the past three years which the Saudis are said to be losing.
Mr Miller said: “I don’t believe the Saudis are going to come out winners.”
A number of long-range missile strikes have been launched against Saudi Arabia by Yemeni Houthi rebels against the capital Riyadh and dragging the Saudis into a vicious war.
A total of 87 missile strikes have been launched by the Iran backed Houthi rebels during the war.
Speaking to Newsweek Mr Miller continued: “A sophisticated missile capacity in Yemen is not only going to create a serious security problem for Saudi Arabia.
“It’s also going to make it extremely difficult for much, if any, of the crown prince’s new vision for Saudi Arabia to take place.”
Reforms already taking place in Saudi Arabia include the decision to let women drive and plans to create a new tourist hub similar to Dubai on the coast of the Red Sea.
The most recent attack against the Gulf Kingdom came on November 4 when an Iranian made Qiam-1 missile is said to have exploded near Riyadh airport.
Major General Jafari from the Iranian Revolutionary Guard Corps claimed that Tehran did not authorise the strike or provide the rebels with the military equipment.
He said: “The claim that the missile was delivered to Yemen by Iran is baseless.
“These missiles have been manufactured by the Yemenis and their military industries.”
However, that statement has been rejected by their Middle East rivals, who have argued that the Houthi attacked on the Iranians’ command.
In a statement they said: “Iran’s role and its direct command of its Houthi proxy in this matter constitutes a clear act of aggression that targets neighbouring countries, and threatens peace and security in the region and globally.”
Tehran’s aggressive actions have worried the US, who fear that the nation is positioning itself to become a regional superpower.
Local media reported last month that Iran’s newly appointed Navy Commander Rear Admiral Hossein Khanzadi is planning to fly the Iranian flag in the Gulf of Mexico.
Mr Khanzadi said the naval expedition into far away international waters would spread a message of peace and friendship while demonstrating its power.
He said: “Our fleet of warships will be sent to the Atlantic Ocean in the near future and will visit one of the friendly states in South America and the Gulf of Mexico.”
The US has recently pulled out of a deal aimed at reducing Iran’s nuclear capacity due to fears that the deal does not offer enough protection to America and could put them at risk.
President Trump refused to certify the Joint Comprehensive Plan of Action originally brokered by his predecessor claiming it “is not a fair deal”.
The UK, US, Russia, France, China, and Germany have all agreed to sign the deal with Iran regardless of whether the move.
Mr Trump has argued that the Iran nuclear agreement is too lenient and called for tougher sanctions to be imposed on the state.