Yemen government forces said they've reclaimed the strategic port city of Mokha from the Iran-backed Houthis, seeking to loosen the militant group's grip on a critically important Red Sea oil route.
In a lightning advance, the Saudi Arabia-backed government said Monday that its forces had taken control of Mokha "following fierce battles against Iranian-backed Houthi terrorist militia" and had captured a number of key locations on the coast around Bab el-Mandeb Strait.
Yemen government forces said they had also launched a "strategic offensive" on the country's capital of Sanaa, which the Houthis have held since 2014.
CNBC could not independently verify the claims. The Houthis have reportedly denied that Mokha had fallen.
Situated about 75 kilometers (46 miles) north of the Bab el-Mandeb Strait, Mokha is historically known as the region's chief coffee-exporting center, and the source of the term mocha.
Along with other key sites, the port city was seized by the Houthis in early September, a development that was seen as a major blow to Saudi Arabia at the time, given that it significantly raised the possibility of the Iran-backed group exerting control over the Bab el-Mandeb Strait.
Iran's closure of the Strait of Hormuz, another strategically vital oil route on the other side of the Arabian Peninsula, has already roiled energy markets and sent shock waves through the global economy.
Alongside Saudi Arabia, Turkey and Pakistan on Monday agreed to activate "deterrence measures" and rapidly deploy forces to support the oil-rich kingdom and counter attacks by the Houthis in Yemen.
The agreement, which came after an emergency meeting between the countries' respective defense ministers in Riyadh, said the three countries share "a firm commitment to collective defense" and hold a unified position in confronting threats.
Oil prices were slightly lower on Tuesday morning as energy market participants closely monitored the sprawling Middle East conflict, which began with U.S. and Israeli strikes on Iran in late February.
International benchmark Brent crude futures with December expiry traded 0.3% lower at $100.12 per barrel, having briefly dipped below $100 earlier in the session, while U.S. West Texas Intermediate futures with November expiry stood nearly 0.9% lower at $88.63.
"While there are growing signs of a recovery in oil flows from the Persian Gulf, the market remains nervous about potential supply disruptions from the region. This is keeping prices well-supported for now," energy strategists at ING said in a research note published Tuesday.
"This nervousness is likely to persist until there are signs of progress in a deal between the US and Iran. In the meantime, the risk of further escalation remains very real," they added.
