The Houthis’ rapid advance toward one of the world’s most critical shipping chokepoints has intensified scrutiny of the extensive financial network enabling the Iran-backed group to evolve from a Yemeni insurgency into a well-armed regional power capable of threatening global maritime trade.
The group has seized new territory along Yemen’s Red Sea coast, including the strategic port city of Mocha, and expanded toward the Bab el-Mandeb Strait. This waterway connects the Red Sea to the Gulf of Aden and carries a significant share of global maritime commerce and energy shipments.
For the Trump administration, the Houthi advance poses both military and financial challenges. Washington is intensifying efforts to disrupt the resources sustaining Iran and its proxies, yet the Houthis have built a sophisticated sanctions-evasion network while controlling ports, trade routes, and millions of Yemenis—raising a complex question for Treasury: how to disrupt the funding without cutting off essential food, fuel, and humanitarian aid to civilians?
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Yemen’s Iran-backed Houthi forces have warned they will close the Bab Al-Mandeb Strait via missile-drone attacks if Gulf states join the U.S. and Israel in targeting Iran. (Mohammed Hamoud/Getty Images)
The group operates a financial network that extends far beyond Yemen, according to Adam Rousselle, founder of Between the Lines Research.
“We’re dealing with a well-capitalized group,” Rousselle told Fox News Digital.
In a 2025 investigation for the Global Network on Extremism and Technology, Rousselle traced a financing system spanning Houthi-controlled ports, tariffs, Iranian oil, informal hawala networks, cryptocurrency exchanges, and foreign facilitators across Russia, Türkiye, and Southeast Asia.
Control of ports has historically been central to Houthi revenue because Yemen depends heavily on imports. Rousselle’s GNET report noted that the Houthis impose steep fees at ports they control and tariffs on goods entering their territory from rival Yemeni ports.
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Satellite imagery shows Bab el-Mandeb Strait, a critical shipping waterway and the gateway to the Red Sea, as Iran threatens using Yemen’s Houthi allies to shut the Bab el-Mandeb gateway to the Red Sea, in this handout picture dated July 12, 2026. (NASA Worldview/Handout via Reuters)
The group’s latest territorial gains could strengthen that economic base even further.
Nadwa Al-Dawsari, a Yemen expert and associate fellow at the Middle East Institute, testified before the House Foreign Affairs Committee in September 2025 that territory is central to the Houthis’ ability to withstand external pressure.
“The most important source of that leverage is territory,” Al-Dawsari testified. “The Houthis have been able to consolidate their power and build increasingly sophisticated military capabilities because they control significant territory, a large population, ports, infrastructure, and resources.”
“That territorial base allows them to recruit, generate revenue, manufacture and store weapons, control smuggling routes, and regenerate capabilities degraded by airstrikes and sanctions,” she added.
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Houthi supporters chant slogans during an anti-U.S. and anti-Israel rally in Sanaa, Yemen, Monday, March 17, 2025. (AP Photo/Osamah Abdulrahman)
Rousselle emphasized the Houthis’ finances should not be viewed as Tehran simply handing cash to an Iranian proxy.
“It’s a misunderstanding that the Iranians just give them money,” he said, describing the Houthis as embedded in a broader Iranian commercial ecosystem.
“The Houthis aren’t sanctions-proof; they’re sanctions-adapted,” Miad Maleki, senior fellow at the Foundation for Defense of Democracies, told Fox News Digital. “Most of their money is made inside Yemen—customs and taxes at Hodeidah and Ras Isa, and fuel above all.”
Treasury estimates the Houthis generate over $2 billion annually from oil sales, while Iran provides the group with a free monthly oil shipment via Iranian-owned or affiliated companies in Dubai. Treasury has also documented Houthi revenue from taxes imposed on petroleum imports.
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Scott Bessent, Treasury Secretary, departs following a tariff announcement in the White House Rose Garden in Washington, D.C., U.S., on Wednesday, April 2, 2025. (Photographer: Jim Lo Scalzo/EPA/Bloomberg via Getty Images)
“Sanctions can’t reach domestic extraction,” Maleki said. “What they can reach is the plumbing between Sana’a and the outside world—the exchange houses, the Dubai and Muscat correspondents, the tankers, and the wallets.”
At the center of this system is Sa’id al-Jamal, identified by the Treasury Department as an Iran-backed Houthi financial official operating an international network that sells Iranian commodities and channels proceeds toward the group.
Treasury reported in April 2025 that al-Jamal’s network had procured tens of millions of dollars in weapons, sensitive goods, and commodities from Russia, and identified eight digital-asset wallets used by the Houthis. Blockchain analytics in Rousselle’s GNET research identified nearly $900 million in outflows across those addresses.
Rousselle cautioned that this figure may not reflect the full scope of Houthi wealth.
“The system is more important than the number itself,” he said, describing the network as fluid and difficult to quantify.
Rousselle noted that Russia has become a significant partner. “The Russians are definitely more hands-on in their support,” he said.
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Houthi supporters demonstrate in solidarity with Iran, amid a two-week ceasefire between the U.S. and Iran, in Sanaa, Yemen, April 10, 2026. (Khaled Abdullah/Reuters)
Al-Dawsari’s congressional testimony similarly highlighted the Houthis’ expanding relationships beyond Iran, noting the group is “deepening ties with other U.S. adversaries, particularly Russia and China.”
She cited reports that Russia provided targeting data to help the Houthis attack Western ships in the Red Sea and that Russian petroleum products were transferred ship-to-ship into a Houthi-controlled tanker before reaching the Houthi-controlled port of Ras Isa.
The China connection is more complex. Rousselle said Chinese-linked private actors appear in parts of the network but distinguished this activity from proven direct Chinese government involvement.
“The Chinese are kind of … turning a blind eye,” he said.
His GNET report described Iranian oil flowing to privately owned Chinese “teapot” refineries and examined transactions linked to Southeast Asian financial networks, while cautioning that available evidence did not establish direct Chinese government control of Houthi financing.
Al-Dawsari pointed to a broader Chinese role in Houthi supply chains. Citing U.S. officials, she said a Chinese satellite company with ties to the Chinese military provided satellite imagery supporting Houthi attacks against U.S. warships and international shipping. She also cited interdiction data showing 60% of components and materials used in the Houthi Qasef-2K drone came from China, compared with roughly 15% from Iran.
This sprawling network is now testing Treasury Secretary Scott Bessent’s broader effort to isolate Tehran economically and disrupt financial channels sustaining Iran and its proxies.
Rousselle noted that decentralized illicit-finance networks present a fundamental challenge.
“You’re dealing with a ‘you shut down one, another pops up’ kind of situation,” he said.
Maleki argued Washington should concentrate on points where Houthi money intersects with the formal financial system.
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Protesters hold weapons during a demonstration of predominantly Houthi supporters showing solidarity with Palestinians in Gaza and condemning U.S. strikes in Yemen, in Sanaa, Yemen, May 30, 2025. REUTERS/Adel Al Khader TPX IMAGES OF THE DAY
“The soft spots are wherever Houthi money touches the formal system,” he said. “Treasury has named the Yemeni banks and the Sana’a exchange houses that pay for missile components; it should now name the foreign correspondents still clearing for them. That is the one tool that changes behavior overnight.”
Oman represents another potential pressure point. “Oman is the Houthis’ land bridge and their mailing address,” Maleki said.
But squeezing Houthi finances presents a dilemma: Yemen remains one of the world’s most fragile humanitarian environments, and the Houthis control ports and infrastructure through which civilians receive food, fuel, and other basic goods.
“I would be lying if I had a concrete answer to it,” Rousselle said when asked how Washington could disrupt Houthi revenue without worsening the humanitarian crisis.
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Members of the Saudi-backed Yemeni government forces react during clashes with Yemen’s Iran-aligned Houthis in a location near Al-Hazm, Yemen, in this screen grab obtained from a handout video released September 9, 2026. (Media Centre Of The Yemeni Armed Forces/Handout via Reuters)
“The humanitarian argument is the Houthis’ best shield, and it’s backwards,” Maleki said. “Food and medicine are licensed and should stay that way.”
“Keep the goods flowing and take away the toll,” he added, arguing Washington should seek ways to prevent humanitarian trade from generating taxes and fees for Houthi authorities.
Rousselle warned the challenge extends far beyond Yemen.
A map highlights the Yemeni port city of Hodeida on the Red Sea coast, where Israeli airstrikes targeted Houthi military infrastructure on Sept. 16, 2025. (Associated Press)
“This isn’t just about the Houthis,” he said. “This is about any sanctioned actor worldwide capable of harnessing financial systems that are completely outside of regulatory control.”
The Treasury Department did not immediately respond to Fox News Digital’s request for comment.