The fuse flirts with the powder keg.
The US naval buildup targeting Yemen's Ansar Allah brings us closer to full-scale regional war.
Executive Summary:
The Israel - Gaza War and the Yemen escalation are taking place in the context of Iran’s war to expel the US from the Levant and the Arabian Peninsula, by showing that it is a weak, incapable and unwanted security guarantor.
The overall Iranian strategy is to present the US with a choice of either backing down in Gaza (thereby humiliating Israel and the US and showing that the Zionist project is no longer viable), or fighting in Iraq, Syria, Yemen, Lebanon, Gaza and even Iran itself simultaneously.
The US can cause enormous damage, but it cannot win such a war. Its economy is too indebted, its global commitments are too big, and its internal stability is too frail.
The US’ naval buildup indicates a greater likelihood of the US striking targets in Yemen as part of newly announced Operation Prosperity Guardian.
Civilian ships belonging to countries included in Prosperity Guardian will be at highest risk of attack if the US strikes at Ansar Allah (Houthi).
Targeting Ansar Allah’s radars raises the risk of the group attacking shipping indiscriminately, laying sea mines and closing shipping lanes.
Ansar Allah can likely target individual ships with a greater volume of missiles than they are currently using, and would do so against military and Western-owned civilian vessels if hostilities commence.
The group would also initially strike at US bases in Djibouti, Bahrain and Qatar, with the aim of furthering Iran’s strategic objective of expelling the US from West Asia. Such actions would also increase pressure on the US to strike Iran.
Ansar Allah may threaten to strike energy targets in these countries unless they expelled US forces, or denied US forces use of their territory. Iraqi factions would back them, both in striking US bases and in striking energy targets, if it came to that.
Saudi Arabia and the UAE’s exclusion from Prosperity Guardian is risk positive for them. Saudi interception of Houthi missiles is a key indicator that Ansar Allah strikes against Saudi would resume.
These dynamics bring the region closer to Iran declaring that it is a nuclear power, to a full-scale war that involves Iran directly, and to an Iran-led energy embago.
The US expending resources in the Middle East helps China, as missile interceptors being used against the Houthi come from a small stockpile that is hard to replenish.
The US is in this in a reactive capacity, and is not thinking clearly about second and third order consequences, as I had argued here.
Analysis
The Iran-led Resistance Axis’ strategic objective is to expel the US from West Asia and assert Iran’s dominance over the region’s shipping chokepoints - the Suez Canal, Bab al-Mandab and Hormuz. This would allow Iran to replace the US as the regional hegemon, ahead of Iran’s competitors Saudi Arabia and Turkiye. Iran and the Resistance Axis’ tactical objective is to impose a ceasefire in Gaza, even if this entails risking a full-scale conflict with the US.
The US has begun a naval buildup to defend international shipping passing through the Red Sea against Ansar Allah attacks. It announced Operation Prosperity Guardian, which includes Italy, the UK, France, the Netherlands, Norway, Spain, Bahrain and the Seychelles. The latter two’s role is limited to basing rights, obviously.
The buildup includes three aircraft carrier strike groups (one new, two previously deployed) and three new destroyers. Three aircraft carriers indicates either an attempt to impose deterrence, which has already failed, or imminent military action.
Notably, the UAE and Saudi Arabia are not part of Operation Prosperity Guardian, which is risk positive for their own security.
It is unclear if this operation will merely intercept Houthi missiles, or will conduct strikes against Houthi radars and missile firing positions.
The former would carry relatively low risk of escalation, but is economically not viable, meaning that it is a short term solution that only works if an Israel-Hamas ceasefire is a month or so away. It is not.
Ansar Allah will not be deterred by the US build-up – just as Hezbollah was not deterred by the deployment of US aircraft carriers to the East Mediterranean. The group has continued with attacks on shipping.
Risks to shipping:
The Houthi tactical objective is to damage ships and risk sinking them to pressure the US and the West into imposing a ceasefire on Israel.
The group has repeatedly warned ships to keep their transponders switched on during their transit of the Red Sea, and claimed that ships that are not going to Israel or are not connected to Israel are not at risk.
Ansar Allah are targeting each ship with one or two UAVs or missiles, usually one. Ansar Allah could hit ships harder - firing five or six missiles and drones per ship - but are choosing not to. They would likely do so against US naval vessels if the US were to conduct strikes against Yemen.
The Houthi are likely identifying ships for targeting using open sources and Yemeni coastal radars. It is unclear whether fishing boats and secure communications are being used to monitor sea lanes.
The US will likely strike Ansar Allah controlled radars, leading the group to fire at ships with less accuracy and possibly reducing its ability to target specific ships.
If US airstrikes prevent Ansar Allah from targeting specific ships, they would likely resort to mining Bab al-Mandab and Red Sea waterways.
Escalation Pathways
In response to any airstrikes, the Houthi retain the option of striking US bases in Djibouti, Kuwait, Bahrain, Qatar and the rest of the GCC, coupled with the threat to sink the ships and strike the energy infrastructure of any Gulf country that hosts US bases that are used in striking Yemen. They would be supported by Iraqi factions in doing so, who would also escalate their attacks against the US in Syria and Iraq.
This would fit perfectly into Iran’s strategy of expelling the US from West Asia, as it would show that the US is a weak security guarantor, reinforcing the lesson that the UAE and Saudi Arabia took from Yemen, and building on past US failures in the region, as discussed below.
It is reasonable to assume that there is some unused anti-ship capability in Gaza. Hamas - and Iran behind it - may well wait for the US to strike against Yemen, then strike US ships in or near the Suez Canal. Hamas would then claim to be supporting the Houthi, as the Houthi are supporting Hamas.
This would cause shipping from the global east to be severely disrupted, and would have an immediate impact on European energy prices and inflation. This would bring additional pressure on the US to stop Israel’s war.
It would also severely raise the risk of a direct Iran - US confrontation. Such a confrontation would very likely entail an energy embargo.
The overall Iranian strategy is to present the US with a choice of either backing down, or fighting in Iraq, Syria, Yemen, Lebanon, Gaza and even Iran itself simultaneously. The US can cause enormous damage, but it cannot win such a war. Its economy is too indebted, its global commitments are too big, and its internal stability is too frail.
Strikes against each of Saudi Arabia and the UAE are unlikely in the initial phase of any conflict, as this would risk the budding rapprochement between Iran and Saudi Arabia, and the old and deepening trade ties between Iran and the UAE, which would also adversely impact China, Russia and India.
The Iranians and the Houthi will have no qualms about striking Bahrain, and, given Iran’s position across from Qatar’s biggest gas field (North Field/South Pars), they will likely be emboldened to strike Udeid in Qatar in the belief that Qatar has no choice but to seek de-escalation.
Iraqi factions are also likely to fire missiles at US bases in the region, and, possibly, at energy assets, in support of the Houthi, to put pressure on regional actors to deny the US military use of their territory and airspace, and possibly to comply with an energy embargo against the West.
If Saudi Arabia intercepts missiles launched from Yemen, or if the Houthi’s situation becomes desperate, this may change the dynamics and lead to Yemeni strikes against Saudi Arabia.
The UAE and Saudi Arabia have been working on achieving neutrality and moving away from the US, which they have discovered to be a poor security guarantor and partner. They also have the most to lose from a confrontation between Iran and the US that drags them in. They may opt to deny the use of their airspace and territory to the US.
That would be an enormous blow to the US’ global role, and would be qualitatively different from Turkiye denying the US access to its territory for the 2003 Iraq invasion.
This is taking place while the Israel - Lebanon front is getting harder to control, as mutual deterrence frays.
Cost Dynamics
US production of interceptor missiles is quite small and costly, averaging around 150-300 units per year.
The US has produced 500-800 SM-6 missiles (latest generation) at a cost of between $4.3 and $4.8 million dollars each.
It has produced an unknown number SM-2 missiles at a cost of $400k-$2 million each. (We may be wrong about the above figures, but they are the best estimates we could find. We are open to being corrected).
A Houthi drone or missile may cost between $5,000 and $25,000.
Iran is supplying UAVs to Russia, indicating that it is producing munitions at a high rate.
Every Western interceptor used against Ansar Allah depletes a stockpile that is intended for Iran and China - spending these resources weakens the US globally. There is an opportutniy as well as a financial cost.
Bad US Options
The US has limited options. Saudi Arabia, with full US backing, tried using the Yemeni government to dislodge Ansar Allah between 2004 and 2011 through the six Sa’ada Wars.
The Yemeni government, a coalition of southern militant groups, the Muslim Brotherhood, the remnants of the Yemeni army, and Islamic State and al-Qaeda in the Arabian Peninsual fought against the Houthi with full Saudi air support between 2015 and 2023.
The overall result was that the Houthi have never been this powerful. All these wars backfired spectacularly.
Striking Yemen from the air is also not very promising for the same reasons mentioned above. The Houthi have been fighting against foes with superior aerial capabilities since 2004.
Watch for:
The Houthi sinking a vessel, causing far more pressure on the US to act against Iran directly.
Qatar pre-emptively declaring that it would not allow Udeid to be used against Yemen, placing pressure on other Gulf states to follow suit.
Chinese shipping companies suspending operations through the Suez – that would be very unlikely and would probably pressure Iran to rein the Houthis in.
The Houthi sinking a US Navy ship, forcing the US to retaliate, including probably against Iran.
Hamas revealing anti-ship capabilities that effectively target Israeli vessels, which may pressure the US to reconsider.
A long humanitarian ceasefire in Gaza that gives everyone an off-ramp.