China urged Iran to rein in Houthis after Saudi plea, sources say

Three Iranian sources with knowledge of the matter said China has privately requested that Iran leverage its influence over Yemen's Houthis to help curb the group's military operations. The request came after Saudi Arabia appealed to Beijing, according to the sources, as Houthi forces rapidly expanded their territorial gains along Yemen's Red Sea coastline.

Riyadh turned to China for assistance following an increase in the Houthi offensive that raised the risk to Saudi oil exports and maritime traffic, the sources indicated. Beijing has publicly urged restraint, dialogue and the return of safe navigation. Its reported private communication to Tehran went a step further, with China asking Iran to exert its sway over the Houthis to stop the conflict from widening further along vital energy routes.

The Houthis maintain a close relationship with Iran, though Tehran has publicly denied characterising the group as a direct proxy. Recent reports have nonetheless pointed to substantial Iranian backing for the Houthi campaign. Last week, Reuters reported that Iranian Revolutionary Guard personnel had supplied weapons, funding and tactical advice during the group's push along the Red Sea coast. The fresh Chinese request thus appears intended as a de-escalation effort and could help ease supply concerns.

Crude oil declined after the news broke, with the price falling below a major trendline that could lead to further drops. It feels as though we are moving into a de-escalatory phase.