ADEN/DUBAI, Sept 11 (Reuters) - Yemen's Iran-aligned Houthis reached the strategic island of Perim in the Bab el-Mandeb Strait on Friday, four Yemeni government sources told Reuters, moving to tighten their grip on a vital global shipping route in the widening Middle East war.
Earlier, two sources from the Saudi-backed, internationally recognised Yemeni government said its forces had pulled out of Perim and that the Houthis had also taken the mainland Red Sea coastal town of Dhubab, which faces the island.
If the Houthis gain control of the Bab el-Mandeb Strait, which is on the opposite side of the Arabian Peninsula from the Strait of Hormuz, it could give their backer Iran a critical advantage in its war with the U.S., reducing supplies through a second major transit corridor and sending oil prices surging.
Saudi Arabia, the world's largest oil exporter, has relied on the Red Sea route since the Iran conflict effectively closed Hormuz, through which a fifth of global oil used to flow.
SMOKE SEEN ABOVE SAUDI EAST-WEST OIL PIPELINE
In a further potentially significant development for Riyadh, satellite imagery showed smoke on Thursday in the vicinity of Saudi Arabia's East-West oil pipeline, which has become a vital means for the kingdom to divert its crude exports from Hormuz.
There was no confirmation from Saudi Arabia of any incident in the area. The Saudi government media office and state oil giant Aramco did not immediately respond to requests for comment on the smoke visible in the imagery verified by Reuters.
Aramco has used the East-West pipeline to ramp up crude flows from Saudi Arabia's eastern coast to the Red Sea to its west after U.S.-Israeli airstrikes on Iran began six months ago, prompting Tehran to effectively shut the Strait of Hormuz.
Saudi crude supply fell 2.3 million barrels per day on the month in August to 6 million bpd, the lowest level in more than three decades, the International Energy Agency said on Friday, partly due to the targeting of ships transiting the Bab el-Mandeb Strait by groups linked to Yemen's Houthis.
Global oil prices were on track to end the week above $100 a barrel for the first time since mid-May, though they were slightly lower on Friday after the Financial Times reported that foreign ministers in the Middle East were trying to work out a temporary deal to manage shipping through the Strait of Hormuz.
Reuters could not immediately verify that report.
Vessels transiting the Strait of Hormuz fell to seven on Thursday from 11 the previous day, preliminary ship-tracking data showed on Friday, well below the 10-day average of 10.
YEMENI GOVERNMENT FORCES PLOT COUNTER-OFFENSIVE
Yemeni government forces indicated they would try to retake areas captured by the Houthi militants in their lightning offensive this week along the Red Sea coastline.
They announced they would deploy weapons and aircraft to eliminate any movement of the "terrorist" Houthi militias in strategic areas, including the road leading to the coastal city of Mocha, which the militant group captured on Thursday along with the Red Sea islands of Hanish.
Military spokesman Colonel Majed al-Nazili called on civilians to avoid using the route between the city of Taiz and Mocha and steer clear of equipment belonging to the Houthis, mountain fighters who withstood years of devastating Saudi air strikes during Yemen's civil war.
Reuters reported on Thursday that the dramatic Houthi advance down Yemen's Red Sea coast this week came with direct guidance from Iran's Revolutionary Guards seeking to open a new front in Tehran's war with the U.S., according to Yemeni government, Iranian and regional sources.
Iran told the Houthis last week to escalate their attacks on Saudi Arabia, a close U.S. ally, and promised more funding, weapons and senior officers to help them do so, two Iranian sources said.
While Iran describes the Houthis as an ally, it publicly denies giving them military direction, saying they are "not a proxy".
TRUMP REJECTS SAUDI CALLS TO BOMB HOUTHIS, AXIOS REPORTS
Saudi Arabia has been bombing Houthi targets in Yemen but not the strategic areas the group has seized this week.
Saudi Crown Prince Mohammed bin Salman called U.S. President Donald Trump twice on Thursday and urged him to launch strikes against the Houthis, Axios reported, citing two U.S. officials.
Trump rejected the request, and U.S. officials said the administration does not intend to take direct military action against the Houthis at this time, the report said.
Representatives for the White House did not immediately respond to a request for comment on the Axios report.
A regional source said Trump was considering what actions to take and that the U.S. was helping with targeting the Houthis.
According to Axios, the U.S. is worried about the rapidly escalating conflict in Yemen and is stepping up support for Riyadh while seeking to avoid direct military involvement.
Gulf foreign ministers plan to meet their Iranian counterpart in a push by Oman and Iran to secure buy-in for a temporary deal to manage shipping through the Strait of Hormuz, the Financial Times reported on Friday.
The gathering is scheduled to be held on Monday in the Omani coastal city of Salalah, the report said, citing two people briefed on the matter.
(Catherine Cartier reported from Beirut; Additional reporting by Samia Nakhoul in Ankara, Maha El Dahan in Dubai and Jacob Bogage in Washington; Writing by Michael GeorgyEditing by Gareth Jones)
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