Iran has increased its economic stranglehold on Yemen while simultaneously obviating Saudi influence over Yemeni economics. Earlier this week, the Houthi-dominated government of Yemen signed a power deal with Iran that will enable Yemen improve its power grid as well as stabilize its energy infrastructure.
In return, the Iranians gained control of the Red Sea port of al Hudaydah, thus bolstering their capabilities to influence maritime commerce across the Red Sea region as well as imperil Israeli maritime trade (especially that which is dependant on the Red Sea).
The Houthis came to power in Yemen after overthrowing the Sunni-led government of Abd Rabbuh Mansur Hadi. The Shiite Houthis were backed by Iran during their insurgency, and after their successful coup; they have given Iran considerable latitude over Yemeni internal affairs while concurrently eroding Saudi influence over the nation.
Saudi Arabia discontinued its financial assistance to Yemen, and the resultant budget deficit has been plugged by Iran which also seeks to increase its influence over the Gulf region as well as promote and protect Shia Islam.
The close relations between the Houthi regime and the Ayatollahs of Iran have led to the regional isolation of Yemen with the neighboring Sunni-dominated governments backing Sunni militants in Yemen.
