The devastating assault by the Houthis on Riyadh’s international airport in Saudi Arabia was regarded by many experts as the pinnacle of the new escalation in Yemen’s civil war, which has now lasted more than 10 years. A frequent question is: how do these Yemeni insurgents manage to finance their war machine? Although the armed militia, rooted in a branch of Shia Islam, has for years been supported by the Iranian regime, the answer is that the group has managed to build a powerful economic network tied to its political and military leadership in the region.
A recent study by the Mokha Center for Strategic Studies think tank shows that this network is based on control of trade, monopolization of strategic sectors, capture of financial resources, and the transformation of the private sector into one of the war’s most important funding sources. This happened especially after the September 2014 coup, when the Houthis took the capital Sanaa with the help of former president Ali Abdullah Saleh, demanding a share of power.
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The Mokha Center notes that, prior to the war, Yemen’s economy depended heavily on oil and gas revenues, representing between 25% and 30% of GDP, more than 90% of commodity exports, and between 60% and 75% of public revenues. The GDP was around US$43 billion in 2014.
Despite these figures, the local economy suffered from limited diversification, with heavy reliance on imports, and the population endured high poverty and unemployment rates.
Public spending remained largely state-led, while a limited number of traditional merchant houses dominated imports, distribution, and financial services. And economic activity was concentrated mainly in Sanaa, Aden, Taiz, and Hodeidah, while agriculture remained the main source of income for a large portion of the population.
Economic opportunities and commercial privileges were already at that time closely linked to networks of interests and political relationships. As a result, Yemen entered the civil war with a fragile economy, highly dependent on oil and extremely vulnerable to fragmentation — something that was proven when state institutions were dismantled and the conflict erupted.
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War Worsens Conditions
The Houthi coup in September 2014, followed by the outbreak of the civil war in 2015, sent Yemen’s economy into a period of severe contraction. Much of the oil production was disrupted, exports were hindered, and the state lost its main source of foreign currency, as well as over 60% of its public revenue.
This coincided with the division of the Central Bank in 2016 and the emergence of two monetary authorities operating under different fiscal and monetary policies, one controlled by the Yemeni Houthis and the other by the internationally recognized regime supported by Saudi Arabia.
Thus, the efficiency of the banking system declined, the cost of trade and transportation rose, fees and taxes multiplied, and the domestic market fragmented into separate markets governed by different authorities and procedures.
It was in this financial vacuum that the Houthis seized the opportunity to build alternative revenue sources after the decline in oil revenues. The study shows that the group imposed taxes, fees, contributions, zakat donations, and mandatory contributions on companies and merchants.
At the same time, it tightened control over imports, fuels, maritime transport, and foreign exchange. Markets, therefore, became the most stable financial resource within the areas under its control.
Since then, businesses and merchants have faced growing financial pressure, facing costs ranging from licensing and business registrations to imports, transportation, distribution, and services. At the same time, companies tied to the group or to figures close to it received privileges and contracts that strengthened their presence in the most lucrative sectors.
Through this mechanism, part of the lost sovereign revenue was replaced by funds raised from the private sector. Some of these resources were directed to financing military and security expenditures and to meeting the needs of the war economy.
Here are some details of this meticulously organized economic network to finance the Houthis’ troops, weapons, and ammunition.
Private Sector
Commercial registration data analyzed by the Mokha Center show that since 2014/2015 the private sector has shifted from a competitive market environment to an economy governed by privileges and loyalties. Those who submit to the policy of taxes, fees, zakat, and contributions gain speed in registrations and business licenses, as well as authorization for imports, maritime transport, currency exchange, and fuel trade. Meanwhile, independent traders face increasing restrictions and financial charges.
“Through these mechanisms, the group expanded its revenues, increased its ability to control merchants and companies, and steered an increasing share of private sector resources toward the war economy,” says the study.
An analysis of nearly 68,000 business registrations and licenses issued in areas under Houthi control between 2014 and 2025 revealed that company registration expanded, more sharply, in the most profitable sectors—including general commerce and imports, foodstuffs, freight transportation, currency exchange, energy, and pharmaceuticals.
Special contributions and recurring fees also drained part of the profits of companies and merchants. Customs and tax revenues approached 700 billion Yemeni rials (YER) — roughly equivalent to BRL 15 billion, while revenues of the Zakat Authority exceeded 400 billion YER annually.
The total revenues collected in areas under the group’s control reached about 2.2 trillion YER (around BRL 45 billion) in 2023.
Networks of Influence and Monopolies
The years of war changed the priorities of economic activity in the areas controlled by the Houthis. During the period, the prominence of many activities tied to production and long-term investment diminished, while sectors related to trade, imports, currency exchange, energy, and maritime transport expanded.
New companies, tied to the group or to figures close to it, turned to the sectors that generated quicker revenues, such as commerce, imports, energy, currency exchange, and maritime transport. These were the sectors that provided the group with continuous financial resources.
As a consequence, large parts of economic activity became linked to the war economy, in which commercial interests increasingly outweighed questions of influence and control, in an unprecedented manner.
Concentration
The snapshot of the new business registrations reveals a clear trend of concentration of commercial activity in a limited number of provinces under Houthi control, with the growth period varying from one province to another over the years of war.
There is an evident concentration of registrations in the capital city municipality, which accounted for 27% of all new registrations. Next come the Sanaa province, with 16%, and the provinces of Hodeidah and Ibb, with 12% and 11%, respectively.
This concentration resulted from the relocation of capital and commercial activities to provinces where the group intensified its control over revenue-generating institutions and large markets.
Between 2020 and 2022, the group consolidated its dominance over markets, expanded its revenue-raising mechanisms, and imposed additional restrictions on independent merchants. In parallel, loyal entrepreneurs and companies linked to the group received privileges that facilitated their expansion.
The growth subsequently observed in Saada, during 2023–2025, also deserves note, the study says. It indicates the shift of part of the commercial activity to the group’s main stronghold — where influence networks and economic decision-making are concentrated, and where financial resources are more directly linked to financing military and security activities.
Foreign Trade
With ever-greater control over the activities with the highest financial flow, every imported good now had to face a long chain of charges before reaching the market.
The group maintains control—directly or indirectly—over the operations that govern imports, transport, and financial transfers. This provides a clear advantage to companies tied to the group and to businessmen loyal to it, expanding monopolists’ influence in markets.
Meanwhile, independent traders faced rising financial charges, weakening their ability to compete.
The financial resources obtained through these activities increased year after year, becoming a steady source that funded the war economy, financed military and security expenditures, and ensured the maintenance of the influence networks the group had established in the private sector.”
Monopoly of Oil and Energy
Since the early years of the war, the Houthis recognized that the oil and energy sector represented one of the largest cash-flow sources in the areas under their control. Therefore, they moved quickly to strengthen their control over the importation of petroleum products, their distribution, and the respective transport and storage networks, the study says.
“The group granted privileges to companies and entrepreneurs loyal to it or linked to its leadership, whether directly or through intermediaries. The fuel trade became a constant source of fees, levies, and profits, providing a liquidity that was used to cover military and security expenses, as well as strengthen the war economy,” the Mokha Center details.
The trade in petroleum derivatives has acquired exceptional importance, as it generates daily cash flows hard to compare with those of other commercial sectors. Each shipment of fuel crossing ports or distribution points generates additional fees, levies, and profits. These resources are, then, channeled into the financing networks the group depends on to cover the costs of its fighters, to finance its security apparatus, and to meet its logistical needs.
“Thus, control over the fuel market has become both a means of dominating the broader market and a way to ensure a continuous flow of resources, even during periods of declining public revenue.”
Currency Control
The study also notes that the Houthis recognized early on that control over money movement was as important as control over markets. Therefore, they sought to expand their influence in the foreign exchange and remittance sector, taking advantage of the declining relevance of commercial banks and the disarray of much of the banking system.
“Currency exchange companies became a fundamental channel for moving resources, settling commercial payments, financing import operations, and providing liquidity to merchants and companies linked to the group. These networks allowed money transfers into and out of Yemen, bypassing the restrictions faced by the traditional banking sector.”
International reports link several of the currency exchange and remittance firms listed in the table to Houthi leaders or to the group’s financial networks. Their activities go beyond traditional financial services, encompassing the management of part of the cash flows the group has relied on during the years of war.
These companies process merchants’ transfers, settle import payments, provide liquidity to companies linked to the group, and carry out the payments necessary to acquire fuel, goods, and logistics services. In return, they charged commissions and fees that became an additional source of revenue.
These financial channels also serve as a means to circumvent restrictions on bank transfers, maintaining the flow of resources necessary for cross-border smuggling operations and for acquiring military supplies.
Through this mechanism, the foreign exchange sector became one of the main pillars of the war economy. It provides the resources needed to finance military and security activities, and has helped sustain the economic influence networks that the group built during the war.
Transport and Smuggling
Also given extreme importance to the transport and logistics sector, as it represents the link between foreign suppliers and the markets under the group’s control. Through transport companies, commercial intermediaries, and shipping agents, the Houthis ensured a continuous flow of fuel, goods, and equipment. They also established external routes to obtain dual-use materials that can serve both civilian and military purposes.
This sector also provided transport, brokerage, customs clearance, and logistics services. These activities generated profits and fees that benefited companies tied to the group, while at the same time preserving the supply lines it needed throughout the war years.
The network extends from Yemen to Iran, China, Malaysia, and Hong Kong and has been involved in the purchase, transport, and shipment of dual-use materials and technologies, including semiconductors, electronic components, and equipment that can be used for both civilian and military applications.
Companies and intermediaries have managed purchases, transport, customs clearance, and settlement of payments with suppliers outside Yemen. They also connect foreign trade to financing and resource-transfer networks, ensuring the continuity of smuggling operations despite international restrictions and sanctions.
In addition to generating financial returns for companies linked to the group, this network secured stable supply lines and access to components and technologies that support military programs and guarantee the ongoing flow of resources needed for the war economy.
What is the Bottom Line?
According to the study, customs duties and charges constituted the largest financial source, with an annual value of about 480 billion Yemeni riyals (YER) — about BRL 10.24 billion. Next come various fees and levies, totaling around 360 billion YER (BRL 7.9 billion), while contributions tied to the war effort reached 180 billion YER (BRL 3.8 billion).
Dozens of billions more were raised through sponsorship of various events and activities.
Resource mobilization did not stop there. The Mokha Center notes. Transportation costs, service charges, additional fees and import-related expenses added about 420 billion YER (BRL 8.9 billion) to the charges borne by the private sector — an amount that largely ended up reflected in the prices of goods and services.
Revenues through taxes, levies, zakat, fees, contracts, privileges, and contributions imposed on companies and merchants generated regular cash flows exceeding 1.5 trillion YER per year (BRL 32 billion).
The think tank says that the possibility of imposing sanctions, anti-money laundering measures, and tracing financial flows are tools that could have intensified pressure on the financing networks and monopolies created by the group. And it notes that such measures could also have raised the economic cost of continuing these operations. However, the use of these instruments remained limited, and this allowed these networks to expand, consolidate their influence, and renew their resources year after year
