The postponement of a joint summit between the European Union and the Gulf Cooperation Council, announced Thursday, has put the economic cost of the Houthi campaign against Saudi Arabia into sharp focus. The gathering, scheduled to be held in the kingdom next week, was pushed back after the council cited what it called continued attempts by the terrorist Houthi militia to target Saudi Arabia and its civilian infrastructure, threatening the security of innocent civilians. For investors and operators in the region, the rescheduling is a visible marker of how quickly risk perceptions around the Saudi market are shifting.
The commercial damage is already measurable. Saturday’s attack on King Khalid International Airport in Riyadh killed 13 people and left more than 300 injured, according to Saudi authorities, and a projectile struck the same facility on Sunday, killing one person, the kingdom’s General Authority of Civil Aviation confirmed. The week before, an attack on Abha International Airport killed two people and wounded 28. Operations at King Khalid remain suspended. Etihad Airways, Qatar Airways, and Philippine Airlines are among the carriers that have announced a suspension of flights to Riyadh. The U.S. embassy in Riyadh has warned Americans of potential flight cancelations, airspace closures, and travel disruptions, and stipulated that U.S. government employees now require special authorization to use any airport in the country.
Energy infrastructure has also been hit. Tuesday night’s attack on Saudi Aramco’s executive offices in Dhahran caused a limited fire, the Ministry of Energy confirmed, with no injuries reported. The Houthis struck Aramco’s headquarters on Wednesday, and hours later vowed to press on. “Operations toward Saudi depths will continue in the coming days,” said Houthi military spokesman Yahya Saree, who described the locations as legitimate targets and framed the attacks as a response to Saudi strikes on Yemen. Saudi Arabia responded with strikes on an oil depot on the outskirts of Sanaa on Tuesday, as the tit-for-tat exchanges escalated. Falling debris from intercepted missiles and drones injured four people in Riyadh.
Meanwhile, the defense economics of the conflict are under scrutiny inside the kingdom. Saudi Arabia is the world’s top purchaser of American weapons, according to the Stockholm International Peace Research Institute, yet it is struggling to stop attacks launched from positions deep within striking range. Saudi authorities are investigating why their defense systems failed, and analysts point to geography as a factor: the border with Yemen stretches more than 800 miles. “Expecting a country the size of Saudi Arabia to intercept every missile is simply unrealistic. No defense can guarantee complete protection,” said Ali Shihabi, a Saudi analyst, in an online post.
The fighting has shattered a cease-fire brokered by the United Nations in April 2022, which held for over four years before collapsing in July. The Houthis claimed Saudi Arabia had struck Sanaa Airport, targeting a Houthi delegation returning from Iran, and launched ballistic missiles in retaliation. Following further strikes on Houthi targets that month, the group began attacking Aramco oil refineries, and in September Saudi airports became a target. The escalation unfolded amid the fallout of the U.S.-Iran war. In September, the Houthis said they had captured Perim Island in the Bab el-Mandeb Strait, a critical maritime chokepoint, and seized other islands to tighten their grip on the Red Sea coastline. Fearing a stronger Houthi position could further constrain global energy supplies, Saudi-backed forces recaptured key areas around the strait in early October.
The Houthis, a Zaidi revivalist movement that emerged in the 1990s and has fought Yemen’s internationally recognized government for around two decades, seized Sanaa in 2014, triggering the civil war. They now control most of the country’s west. Their ties to Iran date back to the 1990s, with weapons supplies, training, and funding accelerating from 2009, according to Farea Al-Muslimi, a Yemeni research fellow at Chatham House. The group is often counted in Iran’s “Axis of Resistance,” though Fawaz Gerges of the London School of Economics notes they are among Iran’s more independent regional allies. With the fall of the Assad regime in December 2024 and the weakening of Hezbollah, Al-Muslimi argues the Houthis have become Iran’s most important regional ally, precisely because of their capacity to disrupt Red Sea trade.
Their stated aims are economic as much as military. “The Houthis want to put severe pressure on the Saudi Arabia economy, airport infrastructure, and security,” says Mahmoud Shehrah, a Yemeni political analyst at Chatham House. “They want to squeeze Saudi Arabia’s arms to push them to a political settlement.” Gerges says the group wants open skies and ports so money can flow into its coffers, and recognition as the legitimate government in Sanaa. The disruption is costly for Crown Prince Mohammed bin Salman, who is eager for Saudi Arabia to be seen as a safe harbor, and Gerges doubts the Saudi leadership will concede to Houthi demands, which would be seen as surrender and humiliation.
Washington’s posture remains in flux. President Donald Trump said Tuesday the Houthis “are behaving very badly,” recalling the U.S. strikes between March and May last year that responded to Houthi attacks on Red Sea shipping, before a cease-fire was reached via Omani mediation. On Saturday he suggested the U.S. may join Saudi strikes on the Houthis. A senior U.S. official told TIME that Washington is “in continuous dialogue with Saudi Arabia and the Republic of Yemen Government regarding regional stability and we will always fulfill our commitments to our partners.” For markets watching the Gulf, the unresolved question is whether that backing can restore the perception of stability that the summit’s postponement suggests has been lost.