The Iran-backed Houthi movement has seized the strategic Yemeni port of Mocha and advanced toward the Bab el-Mandeb Strait, a critical maritime chokepoint connecting the Red Sea to the Gulf of Aden. The group now controls territory along Yemen’s Red Sea coast, raising concerns over potential disruptions to global trade and energy shipments.
The Houthis have warned they will block the Bab el-Mandeb Strait through missile and drone attacks if Gulf nations join a U.S.-Israel conflict with Iran. The group operates a multibillion-dollar financial network spanning ports, tariffs, Iranian oil, informal hawala networks, cryptocurrency exchanges, and foreign facilitators in Russia, Türkiye, and Southeast Asia, according to research by Adam Rousselle of Between the Lines Research and the Global Network on Extremism and Technology.
How the Houthis fund their operations
The Houthis generate revenue through tariffs on goods entering their territory, fees at ports under their control, and taxes on imports—Yemen relies heavily on imports for food, fuel, and medical supplies. The group’s financial system includes informal money transfer networks (hawala) and cryptocurrency exchanges, which complicate international sanctions enforcement. Iranian oil shipments and trade through ports in Russia and Türkiye have also been linked to the group’s funding, per Rousselle’s investigation.
US and Saudi Arabia weigh military options
For the Trump administration, the Houthi advance presents a dual challenge: military pressure and financial disruption. Washington has intensified efforts to cut off funding to Iran and its proxies, but the Houthis’ control over ports and trade routes complicates sanctions enforcement. The administration is grappling with how to restrict the group’s revenue without cutting off civilian supplies in Houthi-held areas.
Saudi Arabia has urged the US to take military action against the Houthis, framing their expansion as an immediate threat to regional stability. The Bab el-Mandeb Strait carries about 12% of global seaborne oil trade, making it a vital economic corridor. Any disruption could have global economic repercussions, including higher fuel prices and supply chain delays.
Humanitarian concerns amid escalation
The Houthis’ control over ports and trade routes has raised alarms about civilian access to food, fuel, and medical supplies. International aid groups warn that strict tariffs and fees imposed by the group could exacerbate Yemen’s humanitarian crisis, which remains one of the world’s worst. The UN and humanitarian organizations have called for unimpeded access to ports to prevent further deterioration of living conditions.
Regional and global implications
The Houthis’ military and financial expansion comes amid escalating tensions between Iran and Israel, with the group positioning itself as a key player in any potential regional conflict. Their control over the Red Sea coast and threats to the Bab el-Mandeb Strait have drawn attention from global shipping companies and energy markets, which are monitoring the situation for potential disruptions.
Analysts note that the Houthis’ ability to evade sanctions and sustain their operations highlights the challenges of countering Iran-backed proxy groups in the Middle East. The group’s financial network, which extends beyond Yemen, underscores the complexity of isolating militant organizations without harming civilian populations.