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US President Joe Biden's administration on Thursday imposed sanctions on 13 people and entities over claims they provided “tens of millions of dollars” in Iran-linked funds to the Houthi rebels in Yemen.
These are the first Houthi-targeted sanctions issued by Washington since the start of the Israel-Gaza war, which has led to an eruption of activity among Tehran's proxies in the wider region.
“The Houthis continue to receive funding and support from Iran, and the result is unsurprising: unprovoked attacks on civilian infrastructure and commercial shipping, disrupting maritime security and threatening international commercial trade,” Brian Nelson, undersecretary of the treasury for terrorism and financial intelligence, said in a statement.
The US and its allies are working to counter a mounting threat in the Red Sea from the Iran-backed Houthis – a new development related to the war in Gaza that could affect international trade.
Missiles and drones launched from Houthi-controlled areas of Yemen were aimed at three ships in the southern Red Sea on Sunday, the US military said.
The simultaneous attack followed Houthi drone and missile attacks last month on the Israeli port city of Eilat, which is adjacent to Aqaba in Jordan and Egyptian resorts.
The US Treasury Department on Thursday said US warships “have had to respond in self-defence to missile attacks from the Houthis”.
“Such actions further regional instability and risk broadening the conflict between Israel and Hamas,” it said.
The conflict also risks disrupting international trade, as the area is a major maritime route for oil and other goods.
“We are looking at a major externality of the Gaza war that could cripple international trade,” Jordanian security specialist Saud Al Sharafat told The National. “There is no immediate response to it."
In addition to shipping, Houthi missile and drone capabilities pose an “imminent threat” to three bases used by US troops in southern Jordan, he said.
Despite the US announcement that a new naval task force could be set up to protect commercial shipping in the Red Sea, the Houthis can still expand their attacks, encouraging armed groups in countries including Somalia to join in, said Mr Al Sharafat, who leads the Shorufat Centre for Globalisation and Terrorism Studies in Amman.
There is unlikely to be a major US response, which aids the Houthi strategy of increasing attacks, he said. America is stretched in Ukraine and is “trying to restrain Israel”, he said.
Washington instead responded on Thursday with sanctions on several people and entities reportedly linked to Iran.
The targets of Thursdays sanctions included Iran-based Houthi financial facilitator Said Al Jamal, who the Treasury alleges “has for years relied on an array of exchange houses, both in Yemen and abroad, to remit the proceeds of Iranian commodity sales to the Houthi movement”.
Bilal Hudroj of the Lebanon-based Hodroj Exchange was also on the list for working “with Al Jamal to make financial transfers to Houthi officials in Yemen”.
“Hudroj and Hodroj Exchange have sent millions of dollars and euros to Yemeni exchange houses aligned with Al Jamal. At least some of these payments were made in direct co-ordination with senior Houthi members,” the Treasury said.
Shortly after the Israel-Gaza war broke out on October 7, the Houthis announced their intention to stop Israeli ships from travelling across the Red Sea. But attacks by the rebels have mostly targeted non-Israeli maritime traffic.
About 10 per cent of annual global trade passes across the Red Sea. A senior executive at a regional cargo company expected Arab Red Sea ports to be affected.
“For now the Houthis are saying take notice we are here. But the longer the Gaza war goes on, its impact will be more unpredictable,” he said.
“The Israelis will be the least affected because their main ports are on the Mediterranean. Jordan, Saudi Arabia and Egypt will feel the impact.”
On Wednesday, Reuters reported that Saudi Arabia asked Washington to respond with restraint to the Houthi attacks on ships, a move a Jordanian source said reflected a desire by the kingdom and other Arab countries to deal deftly with the threat.
“No one wants an escalation that could result in the Houthis closing the Bab Al Mandeb, or mount a replica of the Aramco attack,” he said.
In 2019, a drone attack on Aramco sites in Saudi Arabia claimed by the Houthis caused a major disruption to oil production and soured ties between the kingdom and Washington.
US National Security Adviser Jake Sullivan said Washington and its allies discussed having a naval escort force in the Red Sea.
Officials in Egypt said the country relayed its intention to join the naval task force, while maintaining communication channels with the Houthis.
The security and revenue of the Suez Canal, an international waterway that links the northern reaches of the Red Sea to the Mediterranean, is at stake for Egypt. A disruption of traffic through the canal would affect global trade and rob Egypt of nearly $10 billion in annual hard currency revenue.
One official said senior intelligence officers were recently in contact with Houthi officials to gauge the intentions of the group amid the war in Gaza.
“We have no way of influencing their decisions, but we want to familiarise ourselves with their thinking and to gauge their intentions,” the official told The National.
Gen Mohsen Al Daary, defence minister of the Houthi-led government, visited Egypt in May and met Egyptian President Abdel Fattah El Sisi and the country's Defence Minister Gen Mohamed Zaki.
Egypt has also intensified communication with Iran to prevent the escalation of the Gaza war into a full-fledged regional conflict, the official said.
Early in the war, two drones fired by the Houthis towards Israel fell short of their intended targets and hit Egypt’s Red Sea towns of Taba and Noweiba, on the Gulf of Aqaba.
Farzin Nadhimi, a specialist on Iran's naval capabilities at the Washington Institute for Near East Policy, said the US idea of a naval task force would need a clear mission to protect ships and the power to take defensive actions.
This would, he said, contrast with a 2022 formation, called Task Force 153 that “lacked a strong mandate and rules of engagement”.
