China has requested that Iran exert influence over Houthi forces in Yemen to limit their military expansion along the Red Sea coast. This diplomatic action follows a direct request for assistance from Saudi Arabia. The Houthis recently secured control over the port of Mokha and Perim Island between September 10 and 11, which are critical points near the Bab el-Mandeb Strait.
Shipping activity through the Bab el-Mandeb has fallen to 21 vessels per day, a 58% decrease from the typical average of 50. This disruption, combined with issues at the Strait of Hormuz, has created a two-front crisis for oil transport. In response, Saudi Arabia has begun routing additional crude shipments through Oman to mitigate potential supply chain risks.
Oil markets have reacted to these developments, with Brent crude trading between $104 and $105, and WTI crude between $100 and $102. Prices were also influenced by a smaller-than-anticipated reduction in US crude inventories. Markets are currently balancing the impact of Saudi logistical workarounds against the potential effectiveness of Chinese diplomatic pressure.
Beijing maintains significant economic influence over Tehran, as China received over 80% of Iran’s seaborne oil exports in 2025, averaging 1.4 million barrels per day. However, this leverage is constrained, as reducing oil imports would negatively affect Chinese refiners that rely on discounted Iranian crude. Future market stability may depend on whether transit volumes remain below 25 vessels per day.
