Global oil prices moved lower on Thursday after reports said China, at Saudi Arabia’s request, had urged Iran to use its influence over the Houthis and help ease tensions. Markets took the reports as a sign that the risk of a prolonged Middle East supply disruption may be moderating.
According to the report, U.S. crude futures fell back below $100 per barrel. Prices were also pressured by earlier indications that Saudi Arabia was offering additional crude cargoes through Oman, as well as a smaller-than-expected draw in U.S. crude inventories.
Reuters reported that Riyadh turned to Beijing for help last week after the Houthis made a rapid advance along the Red Sea coast, weakening the position of the Saudi-backed coalition government. Sources said Chinese officials did not issue explicit threats and did not signal that Beijing would apply economic pressure on Tehran if it failed to use its leverage with the Houthis.
China’s foreign ministry said it does not want to see regional tensions spread further into Yemen and the Red Sea. It added that the sovereignty and security of all countries should be respected and that facilities vital to people’s livelihoods should not be targeted. Beijing said disputes should be resolved through dialogue and negotiation.
A senior Western diplomat in the region told Reuters that Beijing is one of the few capitals still capable of pressing Iran to restrain the Houthis. The article also notes that the Iran-aligned Shia group Ansar Allah has often shown a willingness to coordinate actions in ways that benefit Tehran, which means it could respond if Iran were to signal a move toward de-escalation.
Another supportive factor for the market was Saudi Arabia’s claim that it could restore half of the East-West pipeline’s capacity within just a few days. At the same time, the article cautions that this assessment may prove overly optimistic, with a clearer picture likely to emerge over the coming week.
Al Jazeera reported that fighting in Yemen continues on several fronts. Government forces are trying to block Houthi advances, including in the strategic Kahbub mountains overlooking Bab al-Mandeb and in Taiz, while Saudi Arabia is backing operations with air strikes in areas around the city.
Among the latest developments, U.S. President Donald Trump told reporters that the United States was “hopefully toward the end” of its war with Iran and said he had spoken with Iranians “directly”. UN Secretary-General Antonio Guterres separately called for de-escalation and diplomacy in the Middle East. Iran’s national security chief Mohsen Rezaei said Washington must take practical steps to earn Tehran’s confidence, stressing that Iran has “zero trust” in the United States.
Separately, a UN fact-finding mission said it had “reasonable grounds” to believe the U.S. was behind two attacks, including the strike on a school in Minab in February, which it said could amount to a war crime.
The piece also notes that throughout the conflict, both Iranian officials and the Houthis have at times said they were willing to give China and other “friendly” countries, including Russia, “special considerations” regarding maritime transit and, in some cases, fees, including in matters related to the Strait of Hormuz.
