U.S. Continues to Combat Iranian Reach with New Houthi Sanctions
As the United States government continues to identify and target foreign threats to national security, the U.S. Treasury made a significant move to escalate its financial and economic pressure on an old foe acting across the Middle East. Iran-aligned militant group Ansarallah, commonly known as the Houthis, became the subject of new disciplinary efforts levied by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) on January 16th, 2026 when they announced a sweeping round of sanctions against the group with aim of dismantling both their financial and logistical lifelines and limiting the reach of their destabilizing activities.
The Houthi’s, based in Yemen, have gained increased international scrutiny over the past several years given a sharp increase in reckless and ultimately deadly activities perpetrated by the group within this period. The group grasped global headlines beginning in 2023 after carrying out a series of unprecedented missile, drone, and unmanned surface vessel attacks targeting both merchant and cargo ships transiting the Red Sea – one of the world’s busiest and most critical maritime trade corridors. These actions, which continued into 2025, led to the sinking of multiple commercial vessels, the unwarranted deaths of countless seafarers and innocent civilians, and the subsequent pausing and rerouting of vessels attempting to carry out their normal operations. The Houthi’s were also involved in missile and drone strikes on Israel and Israeli infrastructure in 2024 and 2025 as part of their declared solidarity with Palestinians in wake of the ongoing regional conflict seen between Israel and Palestine. During this time, the group had also seen their presence as an Iranian proxy grow, while effectively expanding Iran’s reach into Red Sea and Levantine security dynamics and growing the financial avenues available to the already heavily-sanctioned Iranian government, this in spite of Tehran’s regional sway being weakened by Israel’s retaliatory attacks on its proxies, including on the Houthis in Yemen.1
While disciplinary actions have been taken against the group by several major world powers in wake of these actions, the U.S. Treasury Department estimates that the Houthis are still managing to generate more than $2 billion annually from illicit oil sales, with these funds playing a pivotal role in the proliferation of terrorist activity in the Middle East and beyond. Iranian-linked firms in the UAE play central roles in moving oil to Houthi-controlled areas and in facilitating payments that flow back into Yemen, this despite recent widespread sanctions. In response to this growing relationship, the latest package of sanctions announced by the Treasury this month targeted a total of 21 individuals and entities, as well as one vessel, accused of facilitating the transfer of oil products, procuring weapons and dual-use equipment, and providing financial services that sustain the Houthis’ operations.2 Among those designated were front companies and intermediaries based in Yemen, Oman, and the United Arab Emirates, which the Treasury described as part of the Houthis’ complex revenue-generation and smuggling networks. These networks have also enabled the group to continue their unprovoked attacks on commercial vessels transiting the Red Sea – actions that the American government has deemed “acts of terror” that threaten both global commerce and the respective interests of the American economy. By further constricting these avenues, U.S. policymakers hope to erode the financial foundations that underwrite the Houthis’ maritime attacks and wider destabilizing activities.
The January sanctions build on an increasingly aggressive approach against the group (as well as Iran) that has unfolded over the past several years. These included the designation of Ansarallah as a terrorist entity in 2024, ultimately culminating in the group’s classification as a Specially Designated Global Terrorist (SDGT) and later as a Foreign Terrorist Organization (FTO) under U.S. law. These labels expanded the ability of Treasury authorities to impose blocking sanctions on both individuals and entities tied to the group’s financing and logistics. Over the last two years, OFAC has also repeatedly targeted various layers of the Houthis’ financial apparatus. In December 2023, the Treasury designated currency exchangers and exchange houses in Yemen and Turkey that funneled Iranian financial assistance to the group, while in 2024, they levied sanctions against multiple companies and individuals based in China and Hong Kong linked to weapons procurement operations that supplied drones, missiles, and other lethal equipment that the Houthis used to carry out their aforementioned attacks. Separate designations in July 2024 and April 2025 also focused on illicit shipping and money-laundering networks moving Iranian commodities – including fuel – that generated tens of millions for Houthi repositories and the Iranian government attempting to evade current U.S. sanctions.
While effective in limiting traditional avenues for fund-raising on behalf of these named actors, these economic tools have been more effectively paired with advanced military pressure in other parts of the U.S. government’s response to the broader crisis involving the Houthis. In the spring of 2025, U.S. and allied forces conducted a series of air and naval strikes on Houthi targets inside Yemen – now known as Operation Rough Rider – which aimed to degrade missile batteries, anti-ship systems, and logistics hubs that posed imminent threats to commercial shipping activity. While these actions did not ultimately end the group’s hostile maritime exploits, they underscored the willingness of the U.S. government to utilize both economic and military instruments to defend the interests of the global financial system. The U.S. has pointed to the continued growth of the Houthi network in spite of their efforts and worked to maintain attention on the group’s destabilizing activities amongst its international counterparts, securing continued reporting to the United Nations on maritime security issues and pressing for multilateral measures to protect shipping lanes in order to allow global commerce to continue unabated.
In a press release following the recent sanctions announcement, current Secretary of the Treasury Scott Bessent stated “The Houthis threaten the United States by committing acts of terror and attacking commercial vessels transiting the Red Sea. Treasury is taking action to cut off nearly two dozen individuals and entities involved in transferring oil, procuring weapons, and providing financial services for this Iran-backed terrorist organization.” Bessent added that the Treasury will continue to use “all tools at its disposal to expose the networks and individuals enabling Houthi terrorism.”2 Taken together, this series of sanctions, military strikes, and diplomatic engagement on behalf of the U.S. reflects their sustained effort to disrupt the Houthis’ capabilities, constrain their financial networks, and limit their capacity to threaten international shipping and regional stability. The Treasury’s emphasis on targeting not just the group itself but the wider web of facilitators and enablers also recognizes that the Houthis’ reach extends well beyond Yemen’s borders – creating a challenge that the U.S. government and international allies must confront head on to protect national security and the integrity of the global financial system.
The Treasury press release, which contains specifics on those designated in the recent actions, can be found here.
Citations
- Associated Press. “Latest US Sanctions Target Houthi Funding Networks, Treasury Says.”Reuters, 16 Jan. 2026
- S. Department of the Treasury. “Treasury Increases Pressure on Houthi Smuggling and Illicit Revenue Generation Networks.”U.S. Department of the Treasury, 16 Jan. 2026