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GSN Risk Grade – B↑1 Recent developments Bank ratings: Qatari bank ratings could be downgraded due to their high dependence on external funding, which makes them more vulnerable to external shocks. Fitch Ratings, in a report published on 23 November, said the sector was more dependent on international funding than its GCC peers, with foreign liabilities accounting for 48% of funding at end-September.

Houthi forces have made sizeable territorial gains in recent fighting, but while much of the international focus has been on action around Marib City, another important element has been securing control of vital smuggling routes from the Gulf of Aden coast up to Sanaa. While in private many Saudis see the conflict on their southern flank continuing indefinitely – with potentially catastrophic consequences as the missile and drone war continues – recent developments may reflect manoeuvres by the Houthis and other belligerents before any UN-led negotiations are held.

The Houthis are currently focused on two priorities: the lifting of restrictions on Sanaa international airport and Hodeida seaport; and securing the flow of weapons to retain a credible strike capability into Saudi Arabia.

The Islamic Republic of Iran Navy (Nejada) has boosted its presence in the Red Sea and Gulf of Aden area, amid an intensification of attacks on merchant vessels. In mid-October, Flotilla 78 led by frigate IRINS Alborz took over operational responsibility for the area from the IRINS Alvand-led Flotilla 77, which docked at Salalah for a port visit.

The primary component of Iran’s forward defence strategy is the use of proxies to neutralise threats across adjacent borders – as in Iraq – or to create disruptive threats to divert attention away from the homeland, as in Yemen, Syria and Lebanon.

There have been further movements of coalition forces following Saudi troop redeployments and withdrawals in Mahra, Shebwa and Aden in October. Saudi and UAE forces have withdrawn from the port area of Hodeidah, in effect ceding the city to the Houthis. A coalition spokesman described this as part of tactical redeployments, with the troops needed elsewhere.

A new phase in the Yemen conflict is taking shape, as Houthis close in on Marib City and Saudi forces are redeployed. Military operations in Marib province by President Abd-Rabbu Mansour Hadi’s government and its allies in the Saudi-led coalition have shifted from a focus on preventing the fall of Marib City to how to react once Houthi forces take control – an echo of the situation in June 2018 before the Stockholm Agreement.

Foreign minister Hossein Amir-Abdollahian has invited his Azerbaijani counterpart to Tehran and said he will visit Baku “at the appropriate time”, in an apparent attempt to reduce tensions which have flared up amid military exercises by both countries and Iranian allegations that Azerbaijan is receiving military assistance from Israel.

Tensions between leadership rivals in Mahra and Socotra are rising, as fighting between Houthi forces and those of President Abd-Rabbu Mansour Hadi’s government intensifies in Marib and threatens to spill over into the few regions that have not seen major fighting, specifically Hadhramaut and Mahra.

GSN Risk Grade – Yemen F6 Overview Politics: Conflict has for years exacerbated multiple humanitarian crises, pushing Yemen towards the verge of collapse and ‘failed state’ status (GSN’s political risk category F).

The devastating terrorist attacks of 9/11, and the US pursuit of vengeance, plunged the Gulf region and wider Arab world into turmoil. Key states in the region clamped down hard on Islamist groups, their supporters and the financing methods that kept them going.

In contrast to the UAE’s public withdrawal from Yemen – where Emirati military forces formally pulled out last October, although it has retained a less widely publicised presence, notably on the islands of Socotra and Mayyun – Oman has steadily increased its influence in the worn-torn state.

The scale of the 11 September 2001 attacks in the US was unprecedented, but the likelihood of a major incident involving jihadists and what had become the American ‘hyperpower’ was no surprise. GSN observed in 1998, years after it had reported on the threat posed by Osama Bin Laden, that there was “little problem in gaining warning of the intentions of America’s foes to attack”. Here, GSN raids its huge archive to report on the run up to the horror of 20 years ago. A Part 2 will cover 9/11’s aftermath and George W Bush’s ‘global war on terror’, which removed the Taliban from Kabul but saw the US bogged down with devastating consequences in Iraq.

Israeli defence minister Benny Ganz claimed Iran is using an airfield at Kashan, near Isfahan, to train its allies in using Iranian-built armed drones, after satellite imagery shown at a briefing on 12 September apparently captured two Kaman-22 armed drones on the airfield apron.

Russia’s military co-operation in the Gulf fits in with a broader approach to the Middle East/North Africa (Mena) region, by which it has established firm links with a number of countries and tested its equipment in conflicts, including Syria and Libya.