Iran building new network of proxies to pressure US Gulf allies: Officials

Saudi Arabia and the United States carried out airstrikes against Iran-backed militias in Iraq in July after accusing them of launching drone attacks on Saudi oil facilities. The attacks had been claimed by Yemen's Houthi rebels, who are also backed by Iran.

Regional officials have now told The Associated Press that the Houthis assisted the Iraqi militias in planning and carrying out the two-day drone assault, indicating a growing level of coordination between the two groups.

For decades, Iran built a network of armed allies along Israel's borders. Many of those groups suffered heavy losses during conflicts that followed Hamas' 7 October 2023, attack from Gaza. Israel launched major attacks against Hamas as well as Lebanon's Hezbollah, previously Iran's most powerful regional ally.

Regional officials and analysts say Tehran is increasingly relying on Iraqi militias and the Houthis to put pressure on Saudi Arabia and other US partners in the Gulf. The aim, they say, is to increase the economic and military costs of the war launched by the US and Israel in February.

The strategy carries significant risks. A fresh wave of Houthi attacks on Saudi oil facilities Tuesday raised fears of a return to full-scale conflict between the Houthis and the kingdom. Meanwhile, Iraq has ordered militias to disarm by the end of this month, although several powerful Iran-backed groups have rejected the order. A renewed US campaign to isolate Iran economically could further intensify the confrontation.

Iran-backed groups in Yemen and Iraq apply pressure from both sides

Two Saudi officials, citing intelligence information, and a senior Iraqi security official confirmed that the Houthis participated in the Iraqi drone operation. According to them, Houthi representatives worked from an operations centre operated by Iraqi militias.

Saudi Arabia and the United States responded with joint airstrikes that killed at least 20 Iraqi fighters, six Iranian advisers and at least one Houthi official.

The death of the Houthi official, which had not previously been reported, was confirmed by a Houthi official and a member of an Iraqi militia.

A US military official said Houthi fighters had also been killed in earlier US strikes in Iraq. The official said Washington was concerned about the presence of Houthi members in Iraq and their potential ability to conduct attacks against other countries, including Saudi Arabia.

Two officials from Iraq's Popular Mobilisation Forces, an umbrella organisation of militias that is formally part of the country's security structure, denied that the group had taken part in the attack on Saudi Arabia. They also denied that Houthis were operating under the PMF's authority.

The PMF includes several powerful Iran-backed militias, some of which operate independently at times.

The officials and the militia member spoke anonymously because they were not authorised to discuss the matter publicly. The Houthis did not respond to requests for comment.

Cooperation expanded during the Gaza war

Relations between Iraqi militias and the more organised Houthi movement strengthened during the Gaza war, when the groups coordinated attacks against Israel, according to Houthi and regional officials.

At the height of the conflict, Houthi leader Abdel-Malek al-Houthi publicly referred to the existence of a joint operations room.

Following US and Israeli attacks on Iran on 28 February, Iran and allied groups began launching attacks against Gulf countries in an effort to widen the conflict and impose costs on major oil-producing states that host US military forces.

"Iran has a hybrid strategy in the current war. We are not fighting on one front and we are not using one tool," Mahdi Mohammadi, an adviser to Iran's parliament speaker, wrote on social media in June.

Ahmed Nagi, a senior Yemen analyst at the Crisis Group, said the Houthis' increased role during the Gaza conflict created new opportunities for cooperation in Iraq.

"Many groups there became eager to support the Houthis, and in return, the Houthis started sharing their military expertise with Iraqi militias," Nagi said.

He described the emerging cooperation as a way of "squeezing Saudi like with pliers."

Houthi blockade increases pressure on Saudi Arabia

A week before the Iraqi drone attack, the Houthis announced a blockade targeting Saudi shipping in the Red Sea.

That move threatened another major trade route at a time when disruption in the Strait of Hormuz had already shaken the global economy.

According to the conflict-monitoring organisation ACLED, the Houthis have launched more than a dozen attacks against Saudi oil facilities and tankers in the Red Sea since late July.

On Tuesday, the group carried out a series of attacks targeting oil and other facilities in southern Saudi Arabia. Saudi authorities said more than 70 people, including women and children, were injured.

ACLED said the Houthi blockade has pushed Saudi Arabia to adopt a "dark" shipping policy, including switching off tracking systems on oil tankers travelling through the Red Sea.

Saudi oil shipments increasingly targeted

Saudi Arabia had redirected a large portion of its oil exports towards the Red Sea after Iran effectively shut the Strait of Hormuz.

However, following the start of Houthi attacks, Saudi Arabia began moving more oil northward towards the Suez Canal and Egypt's SUMED pipeline.

Global shipping monitor Kpler reported that flows through the pipeline increased from about 650,000 barrels per day in June to more than 1.9 million barrels per day in August.

The Houthis demonstrated last month that they could also threaten this alternative route when they attacked a Saudi tanker in the northern Red Sea with a missile.

The tanker was reportedly travelling from the Saudi port of Yanbu towards the Suez Canal, around 1,000 kilometres (700 miles) from territory controlled by the Houthis.

Adam Baron, a Yemen expert at the New America think tank in Washington, said the Houthis appeared prepared to accept short-term costs in pursuit of what they view as longer-term advantages, including expanding their influence along the Red Sea coast.

"The train to a return to full scale war has left the station, and it's unclear if anyone is going to jump in to stop it," Baron said, pointing to Washington's focus on Iran and Saudi Arabia's reluctance to become directly involved in Yemen again.

Houthis have their own reasons to target Saudi Arabia

The Houthis captured Yemen's capital, Sanaa, in 2014.

A year later, Saudi Arabia joined Yemen's internationally recognised government in a military campaign against the rebels. Saudi authorities were likely concerned about the possibility of having a Hezbollah-style armed group operating along their border.

The Yemen civil war has killed at least 150,000 people, according to UN estimates, and at various points brought the country close to famine.

A ceasefire that had largely remained in place since 2022 has now effectively collapsed.

For years, a Saudi-led blockade has increased pressure on the Houthis while also causing severe hardship for civilians living in areas controlled by the rebels.

The Houthis have frequently responded to pressure by escalating their attacks.

Elisabeth Kendall, a Yemen expert at Cambridge University's Girton College, said renewed fighting could give the Houthis an opportunity to seize energy-rich parts of eastern Yemen.

Houthis possess a wide range of advanced weapons

The Houthis control large parts of northern and central Yemen and have spent years acquiring advanced weapons through smuggling networks despite the blockade and a UN arms embargo.

Iran denies supplying weapons to the rebels, but Iranian-made arms have been recovered from battlefields and intercepted shipments.

The Houthis possess a broad arsenal that includes cruise missiles, ballistic missiles, drones and unmanned submarines.

Saudi-backed forces in Yemen are now fighting the Houthis on several fronts, including around the strategically important port of Hodeida and Taiz province on Yemen's western coast.

The Houthis, meanwhile, have attacked Mokha, the main Red Sea port that remains under government control.

Saudi Arabia appears hesitant to launch another direct campaign against the Houthis. But Kendall said that if the rebels continue escalating their attacks, the kingdom "will have to act decisively once and for all."