As if things weren’t difficult enough for Gulf states after months of Iranian strikes, the return to a full-blown war in Yemen has led to volleys of Houthi drone and missile fire at Saudi Arabia.

That hasn’t only threatened the kingdom’s airports and cities, but its export of oil through the Red Sea, the route by which it has bypassed Iran’s disruption of the Strait of Hormuz.

Saudi Arabia had to weigh whether to match Houthi advances in Yemen with an escalation of its own, caught between the danger of intensified strikes on its infrastructure and the possibility the group would make big gains.

With Houthi forces perched on the Bab el-Mandeb Strait and already firing sporadically at the kingdom, Saudi Arabia has returned to war, four years after the last phase of the Yemen conflict ended with a truce. 

Will it work this time? Quick gains by Yemeni government forces around Bab el-Mandeb under cover of intense Saudi air strikes (Reuters gave an early glimpse last week of what was planned), may only provide a partial picture.

The area where most territory has changed hands is on the Red Sea coast, where the flat terrain is ideal for mobile warfare.

Once the fight moves to the rugged hills of Yemen’s highland interior, as is already happening on other frontlines, it’s a lot harder to make big gains, even when backed by Saudi jets.

The Houthis are themselves more effective than in the past, using drones and aided by Revolutionary Guard commanders from Iran. They recently managed to encircle government forces in Taiz after fighting in the mountains.

Meanwhile the government’s own forces, while united in enmity with the Houthis, are riven by regional and ideological rivalries that bode poorly for a long campaign.

It all adds up to an uncertain struggle in Yemen, and the likelihood of more Houthi attacks on a kingdom that had hoped to spend this decade working on ambitious development plans.

One of those, a 2034 World Cup stadium to have been built at the futuristic NEOM in northwest Saudi Arabia, has been quietly shelved, Reuters reported this week — a reminder of the sort of challenges Saudi rulers may have preferred to stay focused on. 

Middle East airlines had already been buffeted by regional instability since the October 7, 2023, attack and this year they were only just recovering from the US-Iran war when last week's flydubai incident caused another challenge.

This chart shows how Gulf airlines have clawed back flight levels since the sudden onset of the conflict grounded most planes around the region. 

Joy has been a commodity in short supply in the Gulf this year, and a combination of the Iran war and financial strains mean that will be true in one very specific sense next year too. 

Saudi Arabia is set to cancel its annual Joy Awards, its star-studded answer to the Oscars or the Grammys, two people with knowledge of the matter have told Reuters.

Those tuxedos — and gold-trimmed Gulf-style bisht cloaks — will have to be put back in the closet until better times return. 

This newsletter was edited by Aidan Lewis and produced by Rawan Yaghi.