Houthi attacks force diplomatic pivot
Saudi Arabia is shifting away from military confrontation with Houthi rebels in favor of quiet diplomatic efforts. This is reported by individuals with direct knowledge. They aim to shield oil exports and economic stability. The kingdom has engaged in conversations with the Houthi group in Yemen. These talks are facilitated by Omani intermediaries. It is also developing contingency military plans. These are in case discussions collapse.
The new strategy comes after Saudi Arabia carried out limited airstrikes on Houthi targets. This happened over two consecutive days in late July. No further strikes have taken place. The nation seeks a non-combat resolution. Avoiding a major war remains a key objective. The Houthi group holds most of Yemen’s population. They control strategic Red Sea ports like Hodeida.
Houthi demands complicate peace efforts
The Houthi movement has ramped up their demands for additional financial and trade concessions. They request the removal of all restrictions on imports and exports to Houthi-controlled areas. They also want payment of salaries for Yemeni civil workers. They claim these measures are vital for ensuring a sustainable peace. This follows a 2022 ceasefire that ended years of ineffective Saudi-led air raids. The Houthi have introduced a new dimension to the regional conflict. They target ships near Saudi ports, escalating tensions.
Global concerns over energy and trade
U.S. authorities have quietly advised Saudi Arabia to avoid an intense military response to Houthi attacks. Concerns exist that such actions might escalate disruptions. Key energy chokepoints like the Bab el-Mandeb strait and the Strait of Hormuz are at risk. This year has already seen oil prices climb by 35%. This is due to the closure of the Strait of Hormuz. Further conflict could severely affect global energy and trade dynamics.
The economic toll on Saudi Arabia has been significant, with the country’s GDP shrinking by 4.8% in the second quarter, the worst decline since the early days of the pandemic, as ongoing conflict with Iran has caused oil exports to drop. According to analyst Abdulaziz Al Sager, the government is holding back military retaliation for now, reserving it only for incidents that target critical infrastructure.
The Houthi movement, affiliated with Iran’s Axis of Resistance—a network of anti-American and anti-Israeli militias that also includes Hezbollah and Hamas—has intensified assaults on Saudi oil facilities. Notably, the group launched attacks on Saudi Aramco’s installations in the Red Sea port towns of Jizan and Yanbu. These actions are portrayed as part of a wider campaign against U.S. and Israeli interests, especially in light of the ongoing war in Gaza.
Regional strategy and economic pressures
The Houthi’s declaration in early July that they would blockade Saudi ports effectively carried out Iran’s long-standing warning to expand the conflict to trade routes outside the Persian Gulf. Just five days after this announcement, the group fired missiles and drones at key facilities in Jizan and Yanbu. The Houthi group is part of Iran’s broader Axis of Resistance, which includes anti-American and anti-Israeli groups such as Hezbollah in Lebanon and Hamas in Gaza. Following increased American and Israeli strikes on Iran this year, Iran has reportedly urged the Houthi to heighten their operations near the southern Red Sea.
The Houthi have been launching attacks on ships in the southern Red Sea and Gulf of Aden since late 2023, when the Israel-Hamas war began. These attacks were justified as expressions of solidarity with the Palestinian cause and continued until a ceasefire between Israel and Hamas in October 2025. However, support for the Houthi in Yemen has waned in comparison, as noted by Bloomberg Economics analysts, leading the group to frame its recent actions as a reaction to what it calls a ‘siege’ on Yemen. This ‘siege’ refers to Saudi Arabia’s strict control over Yemen’s ports and airports.