Saudi Arabia’s balancing act

Ref: ADS-54

Summary: with relations with the UAE further strained and the Yemen conflict still unresolved Saudi Arabia must perform a challenging balancing act as an end to the Iran war continues to be elusive.

We thank Helen Lackner for today’s article. An expert on Yemen, Helen also works as a freelance rural development consultant with a particular interest in water, among other environmental issues. SAQI Books has published the paperback edition with new material of her Yemen In Crisis, now subtitled Devastating Conflict, Fragile Hope. It is a seminal study of the war: what lies behind it and what needs to happen for it to finally end. Her latest book  is Yemen: Poverty and Conflict published by Routledge. You can find Helen’s most recent Arab Digest podcast A black eye in Yemen for the UAE here.

There is much speculation about the position of Saudi Arabia in the current US-Israeli war against Iran. Given the dramatic reduction of shipping transiting through the Hormuz strait and the on-off counter US blockade, the Red Sea has increasing relevance as a substitute route. The complex web of concerns include both conflicting and complementary interests for Iran, Saudi Arabia, the two competing Yemeni ruling factions – the Huthis and the country’s internationally recognised government [IRG] – Egypt, the UAE alongside Israel and the US. Each of these must balance a multitude of domestic and international factors.

The Saudi regime exported the majority of its hydrocarbons via the Gulf for decades because it is the site of its main oil producing areas and markets further east. Alongside other powers, it merrily ignored the obvious vulnerability of the Hormuz strait, noticeable with the most superficial of glances at a map. Alongside other GCC states it did its best to discourage the US from engaging in a full-scale war against Iran, offering Trump outrageous bribes in 2025, only to be completely ignored when the US decided to join Israel in a war that has had disastrous consequences regionally and beyond.

Notably, despite numerous speculative statements to the contrary, Saudi Arabia remains as uninvolved in the conflict as possible and takes a very different approach to the UAE’s aggressive pro-US/Israel stand. To safeguard its maritime traffic, Saudi Arabia re-activated its 1980s east-west pipeline and now exports close to 7 million barrels/day via the Red Sea Yanbu port, still about 30% less than its pre-conflict total. It is therefore vulnerable to any threats to Red Sea routes, particularly the Bab al Mandab as 80% of its exports travel eastwards. Yemen is at the core of the problem as the Huthis control most of Yemen’s Red Sea coast and an IRG faction the Bab al Mandab itself.

For the Saudis, the 2023 reconciliation with Iran had long-term advantages. Despite rivalry for leadership of the Muslim community, the absence of enmity allowed the Saudi regime to focus on its domestic economy and other elements of its foreign relations. In 2026, the deteriorating relationship with the UAE intensified with the latter’s increasing closeness to Israel creating a fault line on the Palestinian issue. Saudi Arabia perceives Israel as the main regional threat and is committed to progress towards the 2002 King Abdullah (now Arab League official position) two state solution. UAE-Israeli positions in Sudan and Somaliland potentially threaten encirclement for the Saudis who are responding through intensified cooperation with Pakistan, Türkiye and Egypt, possibly leading to a post-war ‘non aggression pact’ with Iran. Egypt’s ambiguity is a challenge as it depends on the UAE for massive investments while being close to the Saudis on Sudan. For the Saudis, the UAE’s exit from OPEC is a further blow as it threatens a rapid and dramatic drop in prices when the current Gulf war ends and the Saudi regime will continue needing giga funds to finance its remaining grandiose projects but foreign investment remains way below expectation. Convergence between Israel and the UAE may lead Trump’s US to support the Emiratis in their rivalry with the Saudis, if it has to make a choice.

Yemeni politics are at the heart of Saudi political options. Dialogue with the Huthis was close to reaching agreement in late 2023. Although requiring Saudi financing of Huthi personnel and reconstruction, it would have ensured an end to cross-border attacks on the kingdom. There are renewed efforts to revive these negotiations: the Huthis are now weakened by the damage caused by US and Israeli strikes in 2025, the worsening economic and financial position following the renewed US declaration of Ansar Allah as a Foreign Terrorist Organisation and the increasingly severe humanitarian crisis (see our 21 April Newsletter.) All these strengthen muted opposition to their rule. In addition, of course, with the current blockades and destruction, Iran is less able to provide the same level of support as in the past. Despite these problems, the Huthis are battle hardened, run a tightly controlled military and have the added asset of threatening potential attacks on Saudi Red Sea shipping and investments.

Following the ousting of the UAE from southern and eastern Yemen (see our 27 January Newsletter), Riyadh is now effectively the sole external influence on the IRG and could compel it to accept whatever deal it makes with the Huthis. Alternatively, Saudi Arabia might support an IRG military offensive against the Huthis. To date, it has clearly not taken either route: an IRG victory over the Huthis is by no means certain, as it remains divided and military weak despite a restructuring of its security forces.

The Huthis are close partners with Iran but they are not proxies merely executing orders from Tehran. When their interests coincide, actions are coordinated; when they don’t, the Huthis act according to their own interests, rather than Iran’s. They share anti-Israeli ideological commitment and Iran has provided important military (parts for advanced weaponry) and economic (petroleum products) to the Huthis over the past decade. The Huthis are now the least damaged operational entity of the Iranian supported axis of resistance. For Iran the Huthis have been a highly cost-effective ally, costing about US$ 300 million annually or less.

Demonstrating their independence, Huthi involvement has been little more than symbolic in the current war, with three aerial attacks against Israel prior to the 7 April ceasefire between Iran and the US-Israeli side (see our 23 March Newsletter). They have threatened Red Sea shipping and taken preparatory measures in anticipation, but have launched no attacks. Getting involved militarily is a major risk: it would jeopardise the incipient renewed negotiations with the Saudis, at a time when Saudi control over the IRG is stronger and might lead to an offensive against them. It would also provoke the US and jeopardise the May 2025 ceasefire which ended 52 days of intense bombing. Most recently the US has threatened to resume bombing should the Huthis attack any US shipping.

US-Israeli actions will be decisive. Most people and leaderships in the region want to avoid resumption of the war as it would probably lead to a disastrous collapse of essential infrastructure. For the Saudis, Huthi attacks in the Red Sea would also immobilise essential import and export traffic and threaten many major investments. For the first time since the war began, Trump mentioned Gulf concerns in his latest postponement of threatened ‘end of civilisation’ attacks on Iran. Interestingly, this time, even the UAE joined Saudi Arabia and Qatar in calling for negotiations, rather than further apocalyptic killing and devastation. But even putting to one side Trump’s usual bombastic language, still his unwillingness to compromise and total lack of understanding of the complexities of the region and the war may mean disaster is no more than postponed.