Inside the Houthis’ expanding war economy in Yemen

What the report says

Al Jazeera reports that Yemen’s Houthis have built a broad wartime economic system in the areas they control, especially in northwestern Yemen and around key Red Sea routes. The group has held Sanaa since 2014 and already controlled major coastal territory, including Hodeidah, before its recent advance along the Red Sea coast. While those battlefield gains may improve its military position, the article says they do not by themselves remove sanctions or open normal commercial channels.

According to the report, the Houthis have centralized revenue collection through taxes, customs duties, religious alms and other levies, creating what one research center described as a parallel economy. The article cites estimates that this system brings in substantial direct and indirect resources each year, while also raising costs for businesses through fees, transport expenses and other charges. It also notes that Houthi authorities have revoked thousands of commercial agency licenses, which critics say could allow affiliated businesses to take over market space. The Houthis say their measures are meant to support domestic production and simplify regulation.

The report also highlights external financing tied to energy trade and smuggling. The US government has accused the group of profiting from illicit oil sales and of using networks linked to Iranian oil and regional intermediaries. These financial channels operate under US and UN sanctions. Al Jazeera says the Houthis deny some of these allegations.

The article places this revenue system against Yemen’s wider crisis: millions need humanitarian aid, and public employees in Houthi-held areas have gone unpaid for years. That context helps explain why the group uses war and mobilization to justify continued levies, while critics argue the conflict deepens ordinary Yemenis’ hardship.