An extraordinary report from Israel Hayom says Saudi Arabia is seeking a ceasefire with the Houthis through a deal that would see $1 billion transferred to the Iranian-backed group via Tehran.

Citing unnamed Gulf diplomatic sources, the newspaper says Saudi Defense Minister Prince Khalid bin Salman made a visit to Tehran to negotiate the agreement as part of today’s four-way meeting with Turkey and Pakistan. One source went so far as to claim that the money was brought aboard the military transport aircraft carrying the Saudi delegation.

The report comes amid continuing Houthi attacks on Saudi oil infrastructure and Iranian disruptions to tanker traffic in the Strait of Hormuz, both of which have severely constrained regional oil exports.

Saudi Arabia confirmed the diplomatic visit but did not acknowledge any financial transfer. Riyadh has publicly maintained that it will not submit to military pressure or provide funding before the Houthis make territorial concessions.

The proposed payment reportedly relates to a previous agreement under which Saudi Arabia would fund public-sector salaries and reconstruction in Houthi-controlled Yemen in exchange for an end to attacks.

For oil markets, the possibility of a negotiated ceasefire is significant, particularly if it allows Saudi Arabia to restore disrupted production and exports. However, it would not necessarily resolve the separate threat to shipping in the Strait of Hormuz.

The larger takeaway is that Saudi Arabia may be looking for a way out of the conflict even if it means making substantial concessions to Iran’s allies.

The $1 billion payment allegation is based on anonymous sources and remains unconfirmed. Given the potential implications for oil prices, it warrants considerable caution.