Recent escalation in the Yemen conflict has driven trader focus on Houthi capabilities, with the group seizing Red Sea coastal territory including areas near the Bab el-Mandeb Strait in September 2026 before Saudi-backed Yemeni government forces launched a counteroffensive. In response, Houthis have conducted repeated missile and drone strikes on Saudi targets, including deadly attacks on Riyadh’s international airport in early October that killed at least 13 people and hit Aramco facilities in Dhahran. Saudi airstrikes have targeted Houthi positions and oil depots in Sanaa and Hodeidah, while both sides exchange threats over further strikes. Ground incursions across the Saudi-Yemen border remain limited by terrain, Saudi air defenses, and the Houthis’ preference for asymmetric long-range attacks rather than conventional advances. Iran’s reported mediation offer and scheduled regional diplomatic activity could influence de-escalation timelines.