Houthi territorial advances along Yemen’s Red Sea coast and islands in the Bab el-Mandeb Strait since September 2026 have heightened threats from missiles, drones, and small boats, prompting elevated ISPS Security Level 3 and increased war-risk insurance. Saudi-backed Yemeni government forces launched counteroffensives in October, claiming gains around Dhubab and parts of the strait area, though Houthis dispute these and maintain positions enabling potential targeting. Daily ship transits have fallen sharply—recent 7-day averages near 29 versus pre-crisis baselines—but remain well above the IMF PortWatch threshold of 10 that defines “effective closure” for related prediction markets. Ongoing clashes, disputed control claims, and rerouting to the Cape of Good Hope route continue to shape trader assessments of sustained disruption versus outright shutdown.