Yemen

Yemen has an 11.3% probability of a new armed-conflict onset within the next 12 months, representing a high risk. The principal long-run drivers are Yemen’s prolonged civil war, fragmented sovereignty, weak institutions, limited economic capacity, and the presence of heavily armed domestic and externally backed factions. These conditions make local confrontations more likely to widen or create a distinct new theatre of violence.

Recent reporting shows government-aligned forces intercepting four explosive-laden Houthi boats near the Hanish and Zuqar islands and seizing advanced drone components allegedly destined for the Houthis. The incidents involve the internationally recognised government, Houthi forces, Iran-linked networks, and maritime actors in the Red Sea, creating potential for escalation on Yemeni territory or around its islands.

The largest uncertainty is whether maritime confrontation remains contained or connects with Yemen’s existing internal front lines and external rivalries. The clearest risk-raising development would be a sustained Houthi-government clash around the Red Sea islands or direct Saudi, Israeli, or other foreign strikes on Yemeni territory; continued interdiction without broader fighting would support a lower escalation pathway. Prediction markets before the August 31 deadlines implied 0.9% for Israeli military action and 5.3% for Saudi military action against Yemen.