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Red Sea Escalation Sows Fear and Uncertainty

The political situation in Yemen has been completely upended by the regional and domestic fallout wrought by Houthi attacks on maritime shipping and the conflict in Gaza. Peace talks between Saudi Arabia and the Houthi group (Ansar Allah) are now on hold indefinitely, and the future of a seemingly imminent deal is now unclear. Attacks on vessels transiting the Red Sea have continued despite more than two months of American and British airstrikes, which inject further uncertainty into the conflict. The Houthis have built a propaganda campaign around their operations to build support and consolidate control. The divided internationally recognized government lacks the capacity to respond, and with few good options, the West’s strategy remains unclear. With negotiations stalled, Yemen is now staring down a bleak future of continued economic hardship and institutional deterioration, and revitalized chances of a return to broader conflict.

Houthis’ Leverage Attacks to Quell Dissent, Consolidate Power

The Houthis’ intercession in the Red Sea and the Western response raise the specter of renewed internecine violence and political instability in Yemen. The conflict has been quieted since a major Houthi offensive failed to take the oil-rich area of Marib in the winter of 2021-22, and the frontlines have remained fairly stable ever since. This state of affairs continued through a UN-sponsored truce brokered in April 2022, and survived its acrimonious collapse later that year. There were initial benefits to stabilization, particularly in Houthi-controlled areas, as peace talks with the Saudis relaxed restrictions on trade and travel. The Houthis leveraged the talks and their military supremacy to conduct economic warfare against the internationally recognized government, blockading oil and gas exports and taking a share of customs revenue. But with the economy deteriorating after years of conflict, and fewer spoils to deliver to its fighters and adherents, public discontent began to grow. The Houthis govern a populace that far outnumbers their own supporters, and financial hardship aggravated popular resentment, particularly over the non-payment of public sector salaries, with workers now owed over five years in back pay. Last August, the teachers’ union went on strike. In late September, demonstrators openly celebrated the anniversary of the republican revolution in perceived defiance of Houthi rule, triggering a crackdown by authorities. Houthi control was never seriously challenged, but its inability to pay salaries is an important weakness, and has been the key demand in talks with Saudi Arabia.

But regional events handed the Houthis a trump card, and they were quick to play it. Following a bloody Hamas-led incursion on October 7, Israel invaded the Gaza Strip. In response, Houthi forces began targeting commercial ships in the Red Sea, casting drone and missile attacks as part of an economic blockade of Israel in solidarity with the besieged residents of Gaza. Houthi operations escalated dramatically with the capture of the Galaxy Leader cargo ship on November 19, and have continued in earnest against targets in the Red Sea and Gulf of Aden (see, Military and Security). The Palestinian cause remains an important touchstone in the Arab World, and in Yemen particularly. Anti-Israeli and anti-American sentiments have been part of the Houthis’ official slogan since the group’s inception, long before it had the means to act against either. But the group has seized on the horrors unfolding in Gaza, casting itself as an active member of the Iran-led Axis of Resistance. While demonstrations in solidarity have taken place across Yemen, the Houthis have institutionalized them into massive weekly marches, and are using the war in Gaza and their own operations in the Red Sea to quell discontent and dissatisfaction.

Anger over the dire economic situation is now being channeled or sidelined by popular mobilization in support of Palestine. The levels of Houthi-orchestrated mobilization at all levels of society are extraordinary, verging on totalitarian, and appear to be both helping cement the groups’ legitimacy and providing large numbers of new recruits. Further, the situation has provided justification for a new wave of authoritarian repression. Critics of the group can now be charged with collusion with Israel and the West, and an accusation alone is apparently sufficient for their incarceration and the forfeiture of their property and assets. This even extends to women: human rights activist Fatima al-Arwali was sentenced to death in December on vague charges of “espionage and aiding hostile parties.” The Houthis have long acted with impunity, and conducted arbitrary arrests, forced disappearances, torture, and extrajudicial murder. But the codification of such practices into law is a troubling step.

It is unclear how long this state of affairs can last. Now six months old, the war in Gaza has gone on longer than many observers expected, and the international community has done little of consequence to effect its end. So long as it continues, the Houthis can exploit the resistance narrative to channel public anger toward Israel and the West, allowing them to sidestep questions of economic mismanagement and entrench their authoritarian rule and millenarian ideology. But the dire economic situation cannot be avoided indefinitely. The Houthis continue to fund their operations through their dominance of business interests, appropriation of public assets, and collection of taxes, but the ongoing deterioration of the economy risks a renewal of popular discontent. Alleviating such pressure will prove difficult. Attacks on shipping have doubled the cost of imports, and with some ships rerouting away from the ports of Hudaydah, there is concern that the group will no longer be able to collect the same levels of customs revenues it had secured on their reopening. Growing escalation between branches of Yemen’s divided central bank and fallout from the Houthis’ reinstated terrorism designation have hindered remittances and internal cash flows. And any relief promised by a Saudi-Houthi peace deal is now further away.

At present, the Houthis still seem inclined to entertain Saudi overtures and conclude an agreement that would facilitate Riyadh’s departure from the conflict in exchange for much-needed cash. They have made positive statements regarding the reopening of roads and the potential resumption of oil and gas exports. But emboldened by their continued successes, the Houthis could leverage their military capacity again at any point, even after a deal, either to extract further concessions or make gains on the battlefield. The group has sent reinforcements to multiple frontlines in the last few months. Flush with new recruits, and bestowed with a new level of regional and international legitimacy, they could again press on Marib and attempt to claim its lucrative oil fields and refining capacity. If final status talks with the government ever take place, the Houthis will hold the whip hand, their position and legitimacy only strengthened by their operational reach into the Red Sea.

No Good Options for the West

Houthi attacks on shipping quickly raised the groups’ international profile, and drew global attention to the vulnerability of traffic through the Red Sea and Bab al-Mandab. After a series of condemnations, public warnings, a UN resolution, and the announcement of a multinational maritime defensive task force, the US and the UK ultimately rose to Houthi provocation and responded in kind, launching a series of airstrikes on military installations and missile launch sites on January 12. The US provided logistical and intelligence support to the Saudi-led coalition against the Houthis at the outset of Yemen’s civil war, but its appetite for involvement diminished after criticism of excessive civilian casualties and the assassination of journalist Jamal Khashoggi in 2018. President Biden moved to limit America’s role to defensive functions upon his arrival to office, and removed the Houthis’ terrorist group designation that had been hastily imposed by his predecessor. But the US is now a party to the conflict, conducting ongoing strikes and reinstating the terrorism designation on February 16.

The decision to re-engage with direct action against the Houthis has enormous political ramifications. The first problem is that the strikes, even in concert with US and EU defensive maritime task forces and efforts to interdict Iranian weapons shipments, have been ineffective at stemming attacks on shipping. Apart from a brief pause in February, when weapons reportedly ran low, Houthi attacks have continued unabated. The end of March saw a similar lull, but it is unclear if this is due to the airstrikes’ effectiveness or increased caution after the arrival of Russian naval vessels to the region and a seemingly accidental attack on a Chinese tanker. The US has reportedly been careful to limit airstrikes to missile and drone sites and related military installations, but the Houthis are used to aerial bombardment, and much of their arsenal is mobile. Neither direct damage nor the depletion of weapons stockpiles have eliminated their operational capabilities. And the groups’ attacks do not require a high success rate to sow chaos and scare off shipping – even in a degraded state, they retain some deterrent effect.

The material impact of the Houthi attacks on Israel is limited. Most of Israel’s trade comes through the Mediterranean, and attempts to hit its Red Sea port of Eilat have been largely ineffective. The city has been economically harmed by the situation, but this is true for nearly all regional ports, including those of poorer countries along the Horn of Africa. The hardest hit economies are likely those of Egypt, which has lost significant revenue from the Suez Canal, and, tragically, Yemen, whose access to trade and humanitarian relief has been thrown into jeopardy. And while the Houthis have claimed to target only ships linked to the US, UK, and Israel, or those servicing Israeli ports, they have struck a number of vessels with no obvious ties. Even a reported deal to avoid Russian and Chinese ships was promptly followed by an attack on a Chinese tanker.

Perhaps due to the confined scope of Houthi operations, the US has refrained from targeting the group’s leadership, defense ministry, or frontline forces. Doing so would introduce an even greater level of instability in Yemen – it is unclear what would transpire if members of the Houthi leadership were assassinated, or if the group’s stranglehold on power in the north was suddenly loosened. The organization has a centralized and hierarchical structure, which could ameliorate the loss of some senior figures. But the current level of US and UK action has accomplished little apart from allowing the Houthis to trumpet their defiance of the West and Israel, providing powerful rhetorical ammunition for their consolidation of power. Houthi attacks on US military vessels have been unsuccessful, but in such circumstances, simply enduring the airstrikes can convincingly be touted as victory.

Houthi propaganda has only been bolstered by the messaging coming out of Washington and London. Both capitals have attempted to separate Houthi attacks from their stated cause, the Israeli invasion of Gaza, and cast the airstrikes as combatting Iran-sponsored terrorism and protecting international trade. But association is in the eye of the beholder. Whether or not it has conditioned Israeli military action or placed strain on the Israeli economy, the boldness of the Houthi attacks is enormously popular both in Yemen and the region, particularly in contrast with the West’s lack of moral courage on Gaza. The US has provided military support and political cover for the Israeli invasion since the outset, and its apparent indifference to flagrant violations of international law and the staggering number of civilian casualties colors perceptions of its military response in Yemen. A congressional spending bill proposes to end all US support for UNRWA, one of the largest employers and providers of assistance in the enclave. Repeated calls for a ceasefire in the UN Security Council were vetoed by the US, and a resolution only passed after it finally abstained from voting. The unwillingness of the US and the West to seriously push for an end to the fighting in Gaza delegitimizes their claims to uphold the international order and, in many quarters, lends legitimacy to continued Houthi violence on behalf of the Palestinians.

Perhaps aware of the limited effects of airstrikes alone, the US seems to be looking for domestic partners in Yemen, a notion that various elements in the internationally recognized government have been eager to encourage. A visit by National Resistance forces chief and Presidential Leadership Council (PLC) member Tareq Saleh to London was rumored to have been accompanied by requests for support, and the US is apparently evaluating a number of actors with an eye toward bolstering forces opposed to the Houthis, either through material support or coordinated action. There are a number of obvious problems with such a plan. The government remains divided, and the fraught legitimacy of constituent members of the PLC stems primarily from their military capabilities. Empowering one faction against the rest could further upset the fragile balance between them, which has already produced popular mobilization, military confrontation, and violence. This would weaken the internationally recognized government, furthering the imbalance of power in favor of the Houthis and imperiling the prospect of a negotiated settlement.

The members of the PLC are also subject to the policies of their suzerain backers, Saudi Arabia and the UAE, and it would take the commitment of significant resources over a long period to effect or supersede such relationships. The Saudis are loath to antagonize the Houthis, as they still hope to conclude a deal, and the UAE, while more hawkish, has demonstrated limited interest in pressing north since the 2018 Stockholm Agreement halted an advance by allied forces up the west coast. Continued tensions between the Gulf rivals only complicate matters further, as do politics within their own governments.

The Saudis’ preeminent position in the coalition is not borne out on the ground, where the two most powerful groups in the south are backed by the UAE: the Southern Transitional Council (STC), led by PLC member Aiderous al-Zubaidi, and the Giants Brigades, headed by Abdulrahman al-Maharrami, also known as Abou Zara’a. Their priorities are incongruous with those of the West. The STC retains an openly secessionist ideology, advocating the revival of a southern state, and may be uninterested in fighting for territory it has no interest in keeping. Abou Zara’a is a problematic figure in his own right, and the Giants Brigades contain Salafi elements, which the US will likely be hesitant to support. Vying for international attention and support has reportedly already sown suspicion between the two groups. Tareq Saleh’s National Resistance forces are another candidate, given their concentration on the west coast. But like other Yemeni leaders, Saleh is preoccupied with the war on the ground and the balance of power, both within the government and with respect to the Houthis.

In the short term, it is not clear that the West is capable of stemming Houthi attacks. The majority of Houthi drone and missile attacks have failed to hit their targets, but their operational successes, and the threat of further action, have been enough to see shipping prices spike and ships rerouted. Ending the attacks completely would entail the complete destruction of launch sites, stockpiles, and manufacturing capabilities, and interdicting smuggled weapons. This is likely impossible. The US has no diplomatic leverage with the Houthis, and little with Iran following the end of the JCPOA. Escalating the scope of airstrikes and attempting to remove the Houthis or pressure their leadership is likely tempting, but there is no obvious choice for a domestic partner to provide ground support, and the US is unlikely to send significant troops of its own. Empowering disparate elements of the divided government is unlikely to be effective and could well be destabilizing.

The best chance of quickly ending the attacks in the Red Sea is through a comprehensive ceasefire and an Israeli withdrawal from Gaza. There is disagreement among experts as to whether the Houthis would even stop at such an outcome, or if they would continue until further concessions are offered and greater public legitimacy accorded. Certainly, the Israeli occupation provides them an indefinite pretext. But the US seems intent on its current course in Palestine: it has done little to pressure Israel outside of muted public admonishment, and given the scale of atrocities that have already occurred it is doubtful further episodes will change matters.

In the long term, the West likely has to contend with a new form of leverage by the Axis of Resistance on the Red Sea. The Houthis could plausibly be conditioned by a peace deal or the burdens of governance, to the point where the massive disruption of trade to Yemeni ports is no longer in their interest. But the attacks jeopardize the very peace that could incentivize a change of behavior, and at present Saudi Arabia seems content to negotiate by appeasement. The accumulation of weaponry by the Houthis, much of it Iranian, has transformed their operational capabilities, and with it their regional and international leverage. The mass production of cheap unmanned aerial vehicles and their proliferation could well rearrange the asymmetry between the West and armed non-state actors more broadly, much as Kalashnikov rifles did half a century ago. At present, they seem to have few answers to the challenge. If the US wants to act in Yemen, it should do so with economic and logistical support to the internationally recognized government, that it might better serve the pressing needs of its people and better represent them in final status talks.

Government Gets New PM, But Remains Sidelined

Sidelined in the Saudi talks, foundering on the edge of bankruptcy, and faced with continued economic and institutional degradation, the internationally recognized government has been little more than a spectator to the international crisis in the Red Sea. Prime Minister Maeen Abdelmalek Saeed, long expected to be replaced, finally stepped down, succeeded by Foreign Minister Ahmed Awadh bin Mubarak on February 5. Bin Mubarak previously served as Ambassador to the United States and the United Nations, and was chief of staff to former President Abdo Rabbu Mansour Hadi. He was abducted by the Houthis in January 2015 and placed under house arrest, and has since been an outspoken critic of the group. Saeed is now serving as an advisor to PLC chief Rashad al-Alimi.

Bin Mubarak has been keen to appear busy upon his entry to office, conducting meetings with officials from the electricity sector, Tax Authority, and Central Organization for Control and Audit. He established a new fuel tenders committee on February 18, and ordered the suspension of the head of the Tax Authority, pending an investigation. This has driven a similar flurry of activity from other politicians. But Bin Mubarak’s power and influence is limited. He was reportedly Riyadh’s choice for the post, but is said to be unpopular in his own cabinet and with the PLC. Yemen’s ambassador in Riyadh, Shaya al-Zindani, was appointed to the vacant foreign minister post on March 26. Zindani is reportedly not popular either, and members of the PLC reportedly delayed his swearing-in, apparently in hope of finding someone else.

The primary problem is that the government has very limited agency due to its reliance on limited foreign funding. Bin Mubarak’s arrival was accompanied by the release of a second tranche of a Saudi grant, worth some 1 billion Saudi riyals (US$250 million), which stabilized the Yemeni riyal and allowed the government to resume its suspended FX auctions, which finance the import of basic commodities, including food (see, The Economy). The government was very nearly out of money; Bin Mubarak had reportedly requested officials to limit all non-essential travel to cut costs. An Emirati fuel grant has helped provide electricity to Aden, a perennial problem that sparked demonstrations last year. But the drip-feeding of grant money leaves the government unable to undertake comprehensive reforms and is insufficient to reverse the steady decline of the currency and living conditions. Over half of the population of Yemen is reliant on humanitarian support, and aid appeals are routinely underfunded. It is unclear why the Saudis seem so inclined to keep the government in permanent supplication. Riyadh may be concerned that further support would jeopardize the resumption of its talks with the Houthis and the inter-Yemeni talks that are intended to follow. But the divided government will inevitably be the far weaker party in any such negotiations, undermining it further injects the possibility that it will not survive long enough to participate. In the interim, the civilian populace continues to suffer growing and needless deprivation.

In hope or desperation, elements of the government have attempted to leverage renewed Western interest into material support. Al-Zubaidi openly called for the US and UK to share intelligence and provide weapons and training to pro-government forces, calling insufficient support of ground forces a key failure in the war so far. National Resistance forces leader Tareq Saleh met with US Ambassador to Yemen Steven Fagin and regional US commanders in February; the two had spoken earlier via video conference. Al-Alimi met UK Foreign Secretary David Cameron in Riyadh, and pressed Britain to follow the US in designating the Houthis a terrorist organization; the government also hopes the US will upgrade its own designation to Foreign Terrorist Organization, which entails a wider range of sanctions and travel bans for anyone who associates with the group. Al-Alimi also traveled to the Munich Security Conference, meeting with the Bahraini foreign minister and NATO Assistant Secretary-General for Political Affairs Boris Ruge. In March, he reportedly approached the US about extending protection to southern ports and oil export terminals to allow the resumption of hydrocarbon exports, the government’s primary source of income and foreign currency before the Houthis shut them down with a series of drone and missile strikes in October 2022.

But support for individual government actors will only underwrite internal competition. In February, STC forces faced off with Saudi-backed Nation’s Shield forces in Hadramawt, who were attempting to take up positions near Mukalla. Nation’s Shield forces were formed with the intent of giving PLC chief Al-Alimi his own armed group, and the tensions between the forces reflect both Saudi-UAE competition and ongoing competition on the council between Al-Alimi and Al-Zubaidi. But the episode is just one of many. STC forces have routinely mobilized against Islah-aligned forces in the 1st Military Region in Hadramawt, and there are continued reports that tensions have grown between the STC and the Giants Brigades, under their increasingly prominent leader Abou Zara’a.

Yemen’s war had transformed into an economic contest, but the uncertainty accompanying renewed military escalation likely has commanders worried. The Houthis have mobilized huge numbers of recruits on the back of propaganda relating to Palestine, and reinforced a number of key frontlines. There has been continued fighting, particularly in Taiz, Al-Dhalea, southern Hudaydah, and Marib. The government cannot be confident that the Houthis will not seek to press their advantage, either in the short term or following the Saudis’ intended departure from the conflict. The government is right to seek support to shore up its position, but the competition between its members and their foreign backers has been a problem since its bizarre inception two years ago. The prospect of Western support both highlights and reinforces these divisions, and if not done carefully, its destabilizing impact will outweigh any material benefits.

Prospects for Peace Recede

The greatest casualty of the Red Sea attacks has been the indefinite postponement of Yemen’s peace process, as the parties reassess their positions and strategies. Bilateral Houthi-Saudi talks had been progressing for a year when the maritime attacks began, and the announcement of a deal had appeared imminent. That process, known as the roadmap, would have orchestrated the Saudis’ exit from the conflict and been followed by inter-Yemeni talks. The long-term political prospects of the proposal have always been fraught. It is unclear how the Houthis could ever be incentivized to share or relinquish power, and recognition of their de facto control of north Yemen would herald the end of a unified state. Houthi Deputy Chief Negotiator Abdelmalek al-Ejri has reportedly said that Abdelmalek al-Houthi would continue as supreme leader under any arrangement, the first such public testament of the group’s post-war intentions. De-escalation has brought benefits to Yemen, particularly in Houthi areas, with the reopening of Sana’a airport and the ports of Hudaydah. But escalation in the Red Sea has thrown the peace process into jeopardy.

The Saudis have been careful not to overtly criticize the Houthi attacks, likely due to their continued interest in a deal, fear of being targeted themselves, and concern over domestic sentiment. Of all the belligerents, the Saudis’ position may be the most fixed: the kingdom is clearly set on extricating itself from the war in Yemen as soon as possible. It has gained nothing from its involvement, and is far more interested in its own development and pursuit of regional economic power. Riyadh seems to have belatedly understood that it will be far cheaper to buy its way out than to continue. If anything, the fighting in the Red Sea only justifies its view that the Houthi threat of perpetual economic disruption cannot be contained via airstrikes. Entrenching the Houthis may give the West pause in supporting peace talks, but having already tried to remove them by force, the Saudis have few other options. A Saudi-Houthi deal may still be possible: in late March, there were unsubstantiated rumors that a Houthi delegation had traveled to Riyadh to renew discussions. Whatever the case, the kingdom’s objectives, and its preferred means of obtaining them, remain unchanged.

For the US, the situation is far less clear. The Houthis’ newfound capabilities present a troubling development, and extend the reach and deterrent capabilities of Iran through its coalition of non-state actors. Though it had offered its support to both the UN peace process and the bilateral Saudi plan that subsequently overtook it, Washington is now unlikely to back a peace deal that rewards or further empowers the Houthis. As financial compensation was a key pillar of the proposed deal, this could be a significant impediment. In any event, the West will not support an agreement while the attacks in the Red Sea continue. In turn, the targeting of shipping is unlikely to abate while the war in Gaza continues. With Israeli officials suggesting fighting will continue throughout 2024, there may be little room for movement. US Special Envoy for Yemen Tim Lenderking recently met with Saudi and Omani officials, and told the media that the US, “favor[s] a diplomatic solution, we know that there is no military solution.” But given the airstrikes currently underway, the remarks likely reflect a willingness to keep options open, rather than a push for action on peace talks.

The internationally recognized government, excluded from negotiations and presented the roadmap by Saudi officials as a fait accompli, remains in a difficult position. Riyadh’s transparent attempts to extricate itself from the conflict at any cost will hurt the government’s bargaining position when they are finally allowed at the table, as will Saudis’ apparent efforts to keep them incapacitated. With such a weak hand, the government should dread final status talks, but its current predicament is such that it may welcome whatever economic respite they provide. With the negotiations pushed back, the government returns to its perennial preoccupations of economic and institutional collapse, military competition, and internal division.

The Houthis’ decision to risk the process in search of global and regional recognition has brought them immediate benefits, though events have yet to run their course. They seem confident that the Saudis will be happy to pick up where they left off, and having demonstrated the extent of their military capacity, will likely seek further compensation. Such maximalism has already paid dividends in negotiations. The Houthis have publicly expressed an openness to de-escalation measures. It seems unlikely they could strike a deal with the Saudis while drone and airstrikes are still ongoing, but there is nothing strictly preventing it, or for a private understanding that a deal will be concluded when international pressure is less intense.

But the Red Sea attacks and the intercession of the West bring instability and uncertainty. War is unpredictable, and the military and political fallout of the escalation is not yet apparent. Despite its clear problems, the promise of a Saudi-Houthi deal represented a step toward peace for a country that has gone a decade without it. There is hope that it can be salvaged, but for now the war and its deprivations continue.