Yemen’s Houthis may be on a high from their success in keeping Israelis awake at night with their sporadic missile launches targeting the country’s center of gravity. Dealing with this threat will present considerable dilemmas and challenges to Israel. However, Israeli journalists’ defeatism is overwrought; in fact, less than one year and a half after their grand entrance onto the international stage, the Houthis strategic options are looking considerably worse than they were in October 2023. 

A group like the Houthis, similar to Hezbollah or Hamas, is synonymous with misrule. Their claim to legitimacy does not rest on fostering a thriving economy or reflecting the will of the people through national elections but on their narrative of “resistance.” 

To sustain this narrative, they continuously cultivate friction with external parties to demonize these entities, thereby portraying themselves as the country’s “defenders.” This narrative of foreign powers undermining the country also serves as a convenient excuse to deflect blame for their failures in governance. 

As the “last man standing” against Israel within the axis of resistance, the Houthis might seem to be in their strongest position yet. Their attacks on Israel have undeniably earned them newfound respect among Iran’s IRGC and certain radically anti-Israel factions in the Arab world (though noticeably they have not enjoyed a major popularity boost in their home country of Yemen).  Still, this does not tell the whole, or even most, of the story. 

At the strategic level, a well-positioned regime should enjoy the privilege of choosing between favorable options that advance its core interests. In this sense, the Houthis were at their zenith in 2022 to 2023. During this period, they faced a pivotal decision: accept Saudi Arabia’s generous peace offer or increase pressure to extract more concessions from the kingdom. Concluding the deal could have paved the way for greater international recognition and potentially allowed them to assert control over the rest of Yemen, either by dominating a power-sharing agreement with the Internationally Recognized Government (IRG) or by using force while deterring external intervention. 

However, despite Saudi Arabia’s apparent desperation to exit the conflict, the Houthis chose to delay signing the deal, opting to try to extract additional concessions from their Gulf neighbors. The agreement has yet to be signed. 

Today, a year and three months after October 7, 2023, the Houthis’ situation has worsened considerably. Reports suggest that Saudi Arabia is withholding an agreement, possibly with plans to renegotiate under more favorable terms, given the Houthis’ reported desperation to sign now. The Houthis had hoped the agreement with Saudi Arabia would bring in many billions of dollars, which their regime urgently needs as its ability to extract taxes and “donations” from the population diminishes alongside the declining local economy. 

The Houthis might contemplate escalating tensions with Saudi Arabia, potentially by targeting critical infrastructure or border communities, to pressure the kingdom into advancing the agreement. However, such actions would be highly risky, particularly given the anticipated support for Mohammed bin Salman (MBS) from incoming President Trump. An aggressive approach could backfire, jeopardizing the prospects of reaching an agreement shortly and possibly pushing the Saudis into a more forward-leaning position in the anti-Houthi coalition. 

Yemen’s anti-Houthi forces have also gained newfound momentum. Whereas just a few years ago, it seemed likely that the Saudi-Houthi agreement would mark the beginning of a process that would either severely weaken or even lead to the demise of anti-Houthi forces in Yemen, today risks posed by an expanding Houthi presence on the Arabian Peninsula are now clear to all. 

As a result, Yemeni forces fighting against the Houthis will likely receive the additional investment, arms, and training they had long sought to no avail. 

While the Houthis might consider shifting to a different theater to harness their momentum from their unexpected successes on the Red Sea and Israeli fronts, they now appear entrenched on their current trajectory without a clear alternative. Though they may not urgently need one, the current path of attacking Israel and Red Sea shipping is unlikely to advance the regime’s long-term core interests, including securing reliable revenue sources, ensuring regime stability, and generating popular support. 

There are claims that the Houthis have a financial incentive to continue Red Sea piracy by charging safe passage fees to shipping companies seeking to send ships through Bab al-Mandeb, up to $180 million per month, and it is even cited in the UN Panel of Experts Report. While it is safe to assume that the Houthis are trying to shake down maritime traffic, this claim warrants serious skepticism as it is thinly sourced, and it would be extremely difficult and risky for the companies allegedly sending the money to hide such significant financial transfers to a terror group; if this is occurring at all, it is likely at a scale one or two orders of magnitude smaller than the amount claimed in the reports. 

Meanwhile, American and Israeli responses to Houthi attacks, including targeting their oil reserves and other valuable assets, are causing the regime damages estimated in the hundreds of millions. 

The Houthis may spend the next few months testing out different options. They may continue with their attacks on Israel and maritime traffic in the Red Sea. They might escalate pressure against Saudi Arabia and anti-Houthi forces in Yemen to gauge how firm the pushback is. However, it seems likely that they will face significant resistance on all fronts, forcing them to choose between the best or bad options if they are to maintain the friction necessary to justify their regime.  

This is not to say that dealing with the Houthi problem will be simple, cheap, or quick. But this analysis does provide added insight into the group’s strategic calculations, which serve as a reminder that it is not only Israel that faces strategic dilemmas in this conflict. Ensuring that the Houthis meet firm resistance to all of their regional adventurism will serve to make the Houthis’ strategic dilemmas even more difficult. 

Ari Heistein is an advisor to Israeli startups seeking to sell to the U.S. federal government, a consultant on Yemen-related issues, and a nonresident fellow at the Counter Extremism Project. He has previously worked in business development for an Israeli cyber intelligence company and served as a research fellow and chief of staff at the Institute for National Security Studies in Tel Aviv.

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