The showdown in the Red Sea has cast a deep shadow over talks to end the conflict between the Iran-backed Houthi rebels on one side, and the internationally recognized government and the Saudi-led coalition supporting it on the other, according to a commentary published by Crisis Group international.
Before it began, Omani-mediated negotiations between the rebels and the Saudi-led coalition had been advancing, with the parties having reached a set of understandings about a three-phase roadmap aimed at formalising the de facto truce and implementing the humanitarian phase of the deal, which includes salary payments and revenue sharing.
These talks stalled out once the Houthis commenced attacks on international shipping, however: Riyadh and Washington (and other partners) believed that to continue talks under the circumstances would legitimise and reward the Houthis. Absent progress in these talks, peace on the ground is maintained only by a de facto truce, which has governed the parties’ conduct since a formal ceasefire expired in 2023.
Against this backdrop, the UN special envoy has also found it hard to find a workable diplomatic lane. The Houthis have refused to discuss the Red Sea crisis or their attacks on Israel – which they frame as linked to the war in Gaza – and even in humanitarian matters such as prisoner exchanges or road openings, the envoy’s office has struggled to exert influence.
Meanwhile, the Houthis’ Yemeni adversaries have pursued their own military build-ups. On several fronts, especially in the central Marib province and along the western coast, fighters loyal to the Presidential Leadership Council have fortified their positions and received reinforcements, with the Houthis also dispatching fresh troops and supplies.
The Houthis attach particular importance to the western coast, fearing that their opponents might attack there, particularly from areas under the control of the National Resistance Forces, a PLC-aligned faction led by Tareq Saleh. Consequently, they have strengthened their defences in that sector, and there have been some sporadic clashes between the two sides.
For all the political and military challenges it faces, Yemen’s greatest challenge is the economic warfare between the Houthis and their foes. The financial system remains divided between two central banks – one in Sanaa under Houthi control and the other in Aden under the internationally recognised government.
The split deepened in July 2025 after the Houthis printed new currency without coordinating with Aden, undermining understandings reached in 2024 to ease tensions. Houthi revenues are falling, due partly to the disruption of trade through Hodeida.
Against this backdrop, Yemen faces a multi-faceted and mounting humanitarian crisis.
Lasting stability in Yemen requires resolution of it’s war in all its regional dimensions – something that the European Union recognised in its May 2025 Council Conclusions.
The starting point for a new diplomatic push might be the Houthi-Saudi roadmap drawn up before the Red Sea crisis, which contemplates a nationwide ceasefire, payment of public salaries and the resumption of oil exports, and (critically) lays the groundwork for UN-led Yemeni-Yemeni talks that would bring in factions excluded from the bilateral Saudi-Houthi dialogue.
As it encourages diplomacy to proceed along these lines, the EU and member states should also quietly engage Washington on the question of how to use the potential lifting of sanctions as an incentive for progress, while also keeping them from undermining the prospects for a political settlement.
Brussels could do more to encourage the rebuilding of relationships between communities aligned with the Houthis and those aligned with the government. For example, as the EU assesses its longstanding support for Track II mediation efforts in Yemen, it should consider investing more in strengthening exchanges between local mediators and reconciliation committees. It can also work to strengthen intercommunal relations by supporting shared services.
One example is the Marib electricity project, which is located in government-held areas but supplies power to Sanaa. Engaging community leaders from both sides to reactivate this service would benefit all parties and could help build confidence across battle lines.
Finally, the EU should continue – and ideally step up – its humanitarian and development efforts across Yemen. This support must extend beyond government-controlled areas to reach populations under Houthi control to the extent permitted by humanitarian licenses under the various sanctions regimes. Given the starkly different conditions in the two parts of the country, a dual approach is needed. In Houthi-controlled areas, international NGOs – the EU’s main humanitarian partners on the ground – face crackdowns by the group and high delivery costs (owing to the costs of insurance and overland travel from government-controlled areas). There is no easy way to go about this but the bloc and its member states might explore alternative channels, including partnerships with local organisations and the private sector, while also using government-controlled areas as a logistical hub for reaching northern provinces.
In government-controlled areas, conditions allow for more ambitious engagement. The EU’s established relations with the Yemeni government should be translated into concrete support: strengthening state institutions, enhancing the capacity of local authorities to deliver public services, and helping communities build resilience. This could include scaling up support for key institutions such as the coast guard, the Aden-based Central Bank, and local offices providing public services, to strengthen their operational capacity. The EU should also double down on assisting local authorities in supporting internally displaced persons and other vulnerable Yemenis through both humanitarian and development initiatives. Such efforts would not only improve governance in these areas but also create an inspiring model for people under Houthi control to demand better services and accountability.
The Gaza ceasefire creates an opening to ease the Red Sea crisis, but building on this opportunity will require all-hands-on diplomacy, both to ensure that the truce endures and to seek a way out of Yemen’s civil war.