Geopolitics of the Horn: Somaliland's Recognition and the Red Sea Security Crisis

Executive Summary

As of January 1, 2026, the Horn of Africa has undergone a seismic shift following the December 26, 2025, announcement by Israel to formally recognize Somaliland as a sovereign state. This unprecedented move by a UN member state has dismantled the three-decade-old policy of "strategic patience" regarding Somaliland's status. The recognition has catalyzed a regional "Security Paradox," where Somaliland's quest for legitimacy has become the primary friction point for a broader Middle Eastern and African power struggle. For G7 policymakers, the immediate challenge is preventing the collapse of the Somali Federal Government (FGS) while managing the emergence of a new Israeli-Emirati-Ethiopian axis in the Gulf of Aden.

This analysis examines the multidimensional implications of this recognition, tracing the strategic calculations of regional powers, the economic transformations underway in the Berbera Corridor, and the potential scenarios that could reshape the Horn of Africa's security architecture in 2026 and beyond.

I. The Israeli Pivot: A New "Periphery Doctrine"

Israel's recognition of Somaliland represents far more than a bilateral gesture—it constitutes a strategic "breakout" maneuver designed to reshape Israel's regional posture in the aftermath of the Gaza war and amid continuing threats from Iranian-backed proxy forces.

The Red Sea Flank: Strategic Imperatives

Following a year of maritime disruptions that have cost the global economy an estimated $200 billion in additional shipping costs and delays, Israel views Somaliland's 850km coastline as a critical intelligence and naval hub. By recognizing Hargeisa, Israel operationalizes its "Red Sea Strategy," creating a platform for signals intelligence monitoring directed at Yemen and potential staging grounds for counter-Houthi operations.

The strategic value of Somaliland's geography cannot be overstated. The narrowest point of the Bab el-Mandeb Strait—just 29 kilometers wide—represents one of the world's most critical maritime chokepoints, with approximately 6.2 million barrels of oil passing through daily. Israeli access to Somaliland's coast provides unprecedented capability to monitor and potentially interdict Houthi maritime operations, including the drone boat attacks that have plagued Red Sea shipping since late 2023.

The Abraham Accords Framework: Expanding the Circle

Prime Minister Netanyahu has framed this recognition within a "Greater Abraham Accords" context, seeking to link Israeli security needs with Emirati commercial interests and potentially drawing in additional African partners. The model appears drawn from Morocco's 2020 entry into the Accords, where Rabat gained U.S. and Israeli recognition of its sovereignty claims over Western Sahara in exchange for normalization with Israel.

Senior Israeli officials have privately indicated that the Somaliland recognition serves multiple objectives: it demonstrates Israel's value as a security partner to Persian Gulf states concerned about Houthi threats; it provides Israel with strategic depth in a region where it has historically lacked presence; and it offers a narrative counter to Turkish President Erdoğan's depiction of Israel as a destabilizing, unbound actor in the region.

The Controversy of "The Decree": Domestic Political Dimensions

While celebrated in Hargeisa, where crowds gathered in the streets waving Israeli and Somaliland flags, the recognition has sparked controversy regarding its legal foundation. Critics in Israel and international observers note that the announcement came via executive declaration rather than through Knesset legislation, leading opponents to label it an "administrative decree" by a politically weakened Netanyahu administration seeking to project strength amid ongoing coalition tensions.

Legal scholars in Tel Aviv have debated whether such recognition requires parliamentary approval under Israeli constitutional practice. However, supporters argue that recognition of foreign states falls within the executive's foreign policy prerogative, citing precedents from Israel's recognition of newly independent states in the 1990s.

The timing—coming just days before the New Year and amid ongoing negotiations over judicial reforms—has led some Israeli opposition figures to characterize the move as a "foreign policy distraction" from domestic challenges. Nevertheless, the recognition enjoys broad support across Israel's political spectrum, with even centrist opposition leader Yair Lapid calling it "a strategic necessity for Israel's Red Sea interests."

II. The Persian Gulf Schism: UAE vs. Saudi Arabia

The recognition has exposed a deep and potentially consequential rift between the two primary Persian Gulf powers regarding the Horn's future, revealing divergent strategic priorities that could reshape regional alignments for years to come.

The UAE: The Silent Architect

Abu Dhabi remains the "silent architect" of Somaliland's international emergence. The Port of Berbera, operated by DP World (Dubai Ports World) under a 30-year concession agreement signed in 2016, has become a de facto sovereign node in the UAE's expanding maritime empire, which now includes significant stakes in ports from Djibouti to Yemen to South Asia.

The UAE's strategic calculus regarding Somaliland operates on multiple levels. First, a sovereign Somaliland represents a permanent hedge against a potentially hostile, Turkish-aligned Mogadishu. Turkey's growing military presence in Somalia—including a 10,000-strong training mission and recent defense agreements granting Turkish companies exploration rights in Somali waters—has alarmed Emirati strategists who view Ankara's regional activism as a direct challenge to UAE interests.

Second, the UAE sees Somaliland as integral to its "String of Ports" strategy designed to secure maritime trade routes and project Emirati influence across the Western Indian Ocean. DP World's $442 million investment in Berbera has transformed it from a modest regional port into a potential container hub capable of servicing the entire East African hinterland.

Third, and perhaps most importantly, the UAE views recognition as a means of permanently securing its commercial investments. Unlike arrangements with recognized governments that could be reversed by future administrations, Emirati officials calculate that a sovereign Somaliland government would remain permanently grateful to—and dependent upon—its early benefactors.

Notably, the UAE has maintained careful public silence on Israel's recognition, avoiding explicit endorsement while refraining from joining Arab League condemnations. This studied ambiguity reflects Abu Dhabi's delicate balancing act: supporting Israeli and Somaliland interests while avoiding a complete break with Saudi Arabia and other Arab League members.

Saudi Arabia: The Custodian of Unity

Riyadh's response has been swift and unequivocal. Within 48 hours of Israel's announcement, the Saudi Foreign Ministry issued a "categorical rejection," aligning with the Arab League's unanimous condemnation of the move. For the Saudis, any fragmentation of Somalia represents a dangerous precedent that could empower secessionist movements across the region, particularly in Southern Yemen.

Saudi Arabia's opposition operates at three distinct levels. First, there is the ideological dimension: as the self-proclaimed "Custodian of the Two Holy Mosques" and leader of the Islamic world, Saudi Arabia has traditionally championed the territorial integrity of Muslim-majority states. Supporting or even acquiescing to Somaliland's recognition would undermine this positioning.

Second, Yemen represents an existential concern for Saudi security policy. After years of costly intervention in Yemen's civil war, Riyadh fears that recognizing Somaliland could provide precedent and momentum for Southern Yemeni separatist movements. The Southern Transitional Council (STC), backed by the UAE, has long sought independence for South Yemen. Saudi recognition of secessionist precedents in the Horn could fatally undermine Riyadh's efforts to maintain a unified—and friendly—government in Sana'a.

Third, Saudi Arabia's Vision 2030 economic transformation program depends critically on Red Sea development, including the $500 billion NEOM mega-city project on the Kingdom's northwestern coast. Saudi planners view regional stability as essential to attracting the foreign investment and tourism necessary for Vision 2030's success. The fragmentation of Somalia, with potential spillover into broader regional instability, threatens these carefully laid plans.

The Saudi-Emirati split over Somaliland represents the most significant divergence in the Persian Gulf Cooperation Council (GCC) policy since the 2017-2021 Qatar crisis. However, unlike that dispute, both Riyadh and Abu Dhabi are attempting to manage their differences privately, avoiding the public recriminations that characterized the Qatar blockade. This restraint reflects both powers' recognition that maintaining GCC unity is essential amid broader regional challenges, including Iranian influence and the uncertain trajectory of U.S. engagement in the Middle East.

III. The Egypt-Somalia-Turkey "Axis of Unity"

In response to the emerging Hargeisa-Tel Aviv-Addis Ababa alignment, a counter-axis has solidified in Mogadishu, bringing together Egypt, Somalia, and Turkey in a coalition united by opposition to Ethiopian maritime ambitions and Israeli regional expansion.

Egypt's Kinetic Encirclement Strategy

Egypt's response to the recognition has been perhaps the most consequential in military terms. Fearing Ethiopia's maritime expansion via the January 2024 Memorandum of Understanding (MoU) with Somaliland—which would grant landlocked Ethiopia access to the Red Sea—Egypt has dramatically escalated its military presence in the Horn.

In late 2025, Cairo deployed what it characterizes as "advisory" forces to Mogadishu, including air defense systems, armored vehicles, and reportedly up to 5,000 military personnel. This represents Egypt's largest military deployment beyond its borders since the 1973 Yom Kippur War. Additionally, Cairo has secured agreements to upgrade naval facilities in both Eritrea and Djibouti, effectively positioning Egyptian forces to monitor and potentially interdict any Ethiopian military moves toward the Somaliland coast.

Egypt's strategic calculus is driven by existential concerns about Nile water security. With 95% of Egypt's water supply originating from the Nile and Ethiopia's Grand Ethiopian Renaissance Dam (GERD) now operational and reducing downstream flow, Cairo views any enhancement of Ethiopian strategic capabilities as an unacceptable threat. Ethiopian access to Red Sea ports—particularly if accompanied by naval capabilities—would give Addis Ababa increased leverage in Nile negotiations and reduce Egyptian strategic options for pressuring Ethiopia on water issues.

Moreover, Egypt views Israeli recognition of Somaliland as part of a broader strategic encirclement. Israeli-Ethiopian security cooperation has deepened significantly since 2020, including intelligence sharing and reportedly joint surveillance operations. The prospect of Israeli intelligence assets operating from Somaliland's coast, monitoring Egyptian Suez Canal traffic and Red Sea naval movements, represents a significant security concern for Cairo.

The Egyptian deployment to Somalia also reflects broader regional competition. Cairo has historically viewed the Horn of Africa as falling within its sphere of influence, a perception dating back to ancient times. The emergence of an Israeli-Emirati-Ethiopian axis threatens to permanently diminish Egyptian influence in a region that Cairo considers strategically vital for controlling approaches to the Suez Canal—the source of approximately $9.4 billion in annual revenue for Egypt's struggling economy.

Turkey's Security Guarantee: The Mogadishu Shield

Turkey has emerged as the most vocal international opponent of Somaliland recognition and the primary military guarantor of the Somali Federal Government. Ankara's October 2025 agreement granting Turkish companies exploration rights in Somali territorial waters—potentially worth billions in oil and gas reserves—has given Turkey significant economic stakes in maintaining Somali territorial integrity.

Beyond commercial interests, Turkey's engagement in Somalia reflects President Erdoğan's broader vision of Turkish leadership in the Muslim world. Since 2011, when Erdoğan became the first non-African leader to visit Mogadishu during a severe famine, Turkey has positioned itself as Somalia's most reliable international partner. Turkish companies have built roads, hospitals, and schools; the Turkish military operates the country's largest foreign base, training thousands of Somali soldiers; and Turkish Airlines is one of the few international carriers serving Mogadishu.

The "Turkish-Somali Defense Pact," signed in February 2024, commits Turkey to defending Somali territorial integrity against external aggression. Turkish officials have made clear that this commitment extends to opposing any Ethiopian military presence on Somaliland's coast. This creates a potentially explosive situation: Turkey is a NATO member, while Israel maintains close security ties with the United States and other NATO powers. Any military confrontation between Turkish and Israeli-backed forces in the Horn could create unprecedented tensions within the alliance.

Turkish opposition to Somaliland recognition also serves domestic political purposes for Erdoğan. By positioning Turkey as the defender of Somali unity and opponent of Israeli expansion, Erdoğan appeals to nationalist and Islamist constituencies at home while projecting Turkish power abroad. The Somaliland issue allows Erdoğan to cast Turkey as a principled defender of Muslim lands against what he characterizes as Western and Israeli neo-colonialism.

Strategically, Turkey's Horn of Africa engagement is part of Ankara's broader effort to secure influence in regions where Western powers and the Persian Gulf states compete for dominance. By backing Somalia against the Israeli-Emirati-Ethiopian axis, Turkey positions itself as an indispensable player in Red Sea security—a role that could give Ankara leverage in negotiations with both the United States and European powers on issues ranging from Syrian refugees to NATO expansion.

IV. Economic Analysis: The Berbera Corridor 2026

The expansion of the Port of Berbera has transitioned from a logistical project to what analysts now describe as a "geostructural anchor"—a infrastructure network so economically significant that it shapes the strategic calculations of regional powers.

Current Metrics and Projections

The expansion of the Port of Berbera has evolved from a conventional infrastructure upgrade into what regional analysts increasingly describe as a geostructural anchor—a strategic logistics and trade node whose economic gravity is reshaping political and commercial calculations across the Horn of Africa. By 2026, Berbera is no longer merely a coastal outlet for Somaliland but a central pillar in a broader corridor strategy linking the Gulf of Aden to the Ethiopian highlands and, by extension, to global maritime trade routes.

Quantitatively, the transformation has been substantial. Container throughput, which stood at approximately 500,000 TEUs in 2024, is projected to exceed one million TEUs following the completion of DP World’s Phase II expansion. This doubling of capacity places Berbera in direct competition with Djibouti, long the dominant maritime gateway for Ethiopia. Operational efficiency has improved in parallel: average vessel turnaround time has been reduced from roughly 25 hours to an estimated 18 hours, a critical metric for shipping lines operating under tight cost and scheduling constraints.

The economic spillover effects extend well beyond port operations. Ethiopia’s utilization of the Berbera corridor—previously marginal at around 14 percent of its external trade—is projected to rise toward 30 percent by 2026, reflecting both political diversification away from overreliance on Djibouti and the growing reliability of Berbera’s logistics ecosystem. This shift carries strategic significance, offering landlocked Ethiopia greater leverage in its trade negotiations and reducing systemic vulnerability to single-corridor disruptions.

At the domestic level, the macroeconomic impact on Somaliland is increasingly evident. Direct employment associated with port operations, logistics, and auxiliary services has expanded from approximately 3,200 jobs to an estimated 12,000, with multiplier effects across construction, transportation, and urban services. Correspondingly, the port and corridor are projected to contribute roughly 2.5 percent to Somaliland’s GDP by 2026, compared to a marginal 0.4 percent contribution prior to the expansion. These gains are reinforced by a sharp increase in foreign direct investment, which has risen from approximately $180 million to an estimated $650 million, driven primarily by logistics firms, warehousing developers, and regional transport operators seeking early-mover advantages.

The physical transformation of the port underpins these trends. The completion of a new 400-meter quay, combined with the installation of advanced ship-to-shore gantry cranes, has enabled Berbera to accommodate Post-Panamax vessels—an operational threshold that fundamentally alters its competitive positioning in the Red Sea–Gulf of Aden maritime system. In effect, Berbera has transitioned from a peripheral port to a functional alternative node within the regional trade architecture, anchoring Somaliland’s economic strategy and reshaping the balance of infrastructural power in the Horn of Africa.

The Ethiopian Lifeline: Multi-Sectoral Integration

Ethiopia's economic stake in Somaliland's success has grown exponentially since the January 2024 MoU. Despite international controversy surrounding that agreement—which Somalia characterized as an illegal annexation attempt—Ethiopia has proceeded with a series of "Multi-Sectoral Agreements" with Somaliland throughout 2025.

The centerpiece of this integration is the Berbera Corridor Standard Gauge Railway (SGR), a $3.8 billion project connecting the port to Ethiopia's eastern highlands and ultimately to the capital, Addis Ababa. Once completed in 2028, the 600-kilometer railway will dramatically reduce transportation costs for Ethiopian exports, which currently travel primarily through Djibouti at significant expense.

Ethiopia's motivation for this massive investment is straightforward: diversification away from near-total dependence on Djibouti, through which 95% of Ethiopian trade currently flows. This dependency has given Djibouti enormous leverage over landlocked Ethiopia, manifested in port fees that Ethiopian officials privately describe as "extortionate." The 2016 termination of DP World's Doraleh Container Terminal concession by Djibouti—a move that benefited Chinese state-owned enterprises—further alarmed Ethiopian planners about supply chain security.

Energy Dimension: The Gas Pipeline Project

Perhaps the most significant development in late 2025 was the announcement of a proposed natural gas pipeline from Ethiopia's Ogaden Basin to Berbera. Recent exploration has revealed that Ethiopia's Ogaden region contains an estimated 4 trillion cubic feet of recoverable natural gas reserves—enough to potentially transform Ethiopia into an energy exporter.

The proposed pipeline, with an estimated cost of $2.1 billion and expected completion in 2029, would allow Ethiopia to export liquefied natural gas (LNG) through Berbera's planned LNG terminal. This project makes Somaliland's sovereignty a non-negotiable strategic interest for Addis Ababa, as it represents Ethiopia's best opportunity to generate foreign exchange revenue and reduce dependence on imported fossil fuels.

The energy dimension has attracted interest from international oil majors, including Shell and TotalEnergies, which have reportedly held preliminary discussions about participating in the LNG infrastructure. However, the uncertain legal status of Somaliland has prevented major commitments. Israeli recognition, and potential future recognitions by other states, could unlock significant international investment in what analysts describe as "East Africa's next energy frontier."

G7 Trade Impact: The Resilience Route

For G7 economies, the Berbera Corridor offers what strategists have termed a "resilience route"—an alternative to the increasingly contested Bab el-Mandeb passage for accessing East African markets. With Houthi attacks having forced many shipping companies to reroute around the Cape of Good Hope at enormous cost, the prospect of a secure, efficiently operated port network in the Gulf of Aden holds significant appeal.

However, this potential is contingent on the region remaining free of the emerging Egypt-Ethiopia proxy conflict. The deployment of Egyptian forces to Somalia has raised concerns among international shipping companies about potential blockades or military actions that could disrupt the Berbera Corridor. Insurance premiums for vessels calling at Berbera have increased by approximately 30% since the Israeli recognition announcement, reflecting these elevated risks.

European Union officials have privately expressed concern that the Horn could become "the next arena of great power competition," potentially drawing in not only regional actors but also China, which has significant interests in protecting Belt and Road Initiative (BRI) investments in the region, including in Djibouti where China operates its first overseas military base.

V. Scenario Analysis for 2026

The following scenarios represent the spectrum of possible outcomes in the Horn of Africa over the coming 12-18 months, ranging from quasi-stable diplomatic stasis to large-scale military confrontation.

Scenario A: The "Taiwanization" of Somaliland (Probability: 60%)

Dynamics: Somaliland achieves "Functional Sovereignty" status—remaining unrecognized by the UN, African Union, and most G7 states, but gaining incremental "Consular Recognition" and formal bilateral agreements from a growing number of countries, beginning with Ethiopia and potentially including several African states with secessionist challenges of their own.

Under this scenario, Somaliland operates as a de facto independent state in all practical respects while maintaining diplomatic ambiguity about its formal status. The model parallels Taiwan's position for much of the post-1971 period—lacking UN membership but maintaining substantial international relationships and economic integration.

Key developments under this scenario include:

• Ethiopia formally recognizing Somaliland by mid-2026, justified as necessary to secure the Berbera Corridor investments
• Kenya and Uganda establishing "trade representative offices" in Hargeisa that function as de facto embassies
• The UAE quietly upgrading its representation to consular status
• G7 countries maintaining official recognition of Somalia's territorial integrity while substantially increasing direct engagement with Hargeisa on trade, development, and security matters

G7 Risk Assessment: The primary risk under this scenario is that maintaining the "One Somalia" fiction becomes diplomatically untenable and potentially hypocritical as G7 companies increasingly sign direct deals with Hargeisa. Major mining companies have expressed interest in Somaliland's substantial but underdeveloped mineral resources, including rare earth elements critical for renewable energy technologies.

The "Taiwanization" scenario could also create a template for other secessionist movements globally, potentially destabilizing settled territorial arrangements in regions from the Balkans to the Caucasus to other parts of Africa. The African Union's foundational principle of respecting colonial-era borders—established to prevent endless territorial disputes—would be fundamentally challenged.

However, this scenario offers some stability advantages. It acknowledges the reality that Somaliland has functioned as an independent entity since 1991, has held multiple democratic elections, and maintains security and governance structures separate from Somalia. Formal recognition of this reality, even if limited to certain states, could enable more effective international cooperation on counterterrorism, piracy, and development.

Scenario B: The "Horn War" (Probability: 25%)

Dynamics: Emboldened by Israeli recognition and driven by its desperate need for maritime access, Ethiopia attempts to establish a permanent naval presence in Berbera or the coastal town of Saylac. This move is interpreted by Egypt and Somalia as casus belli, triggering a multi-front conflict that could draw in Turkey (as Somalia's treaty ally), Egypt (which has pre-positioned forces), and potentially Israel and the UAE (as tacit backers of the Ethiopian-Somaliland axis).

The conflict scenario could unfold through several potential flashpoints:

• Ethiopian military forces, disguised as "training advisors," begin constructing port facilities at Saylac, prompting Somali government protests and Egyptian military movements
• Al-Shabaab or other militant groups, potentially with covert Somali government support, attack Ethiopian commercial or military targets in Somaliland
• Turkish naval vessels in Somali waters confront Emirati or Israeli intelligence vessels operating near Somaliland
• Egypt attempts to blockade or restrict Ethiopian access to Berbera, prompting Israeli threats to ensure "freedom of navigation"

G7 Risk Assessment: A state-on-state conflict in the Red Sea corridor would be catastrophic for global commerce. The Bab el-Mandeb Strait, already compromised by Houthi attacks, could become entirely impassable if regional powers engage in naval warfare. The economic impact would dwarf the disruptions of 2024-2025, potentially triggering global recession as energy and consumer goods prices spike.

The conflict would also pose unprecedented challenges for NATO. Turkey's involvement on one side and likely U.S. support (even if unofficial) for Israel on the other would create the most serious alliance crisis since the 1974 Cyprus conflict. European NATO members would face agonizing choices about which ally to support, potentially fracturing alliance unity at a moment of heightened global tensions.

Additionally, a Horn war would create opportunities for terrorist groups, particularly al-Shabaab, to exploit the chaos and expand their territory and capabilities. International counterterrorism cooperation would collapse as regional states prioritize their proxy conflicts over shared security threats.

Scenario C: The Al-Shabaab "Nationalist" Surge (Probability: 15%)

Dynamics: Al-Shabaab, the Somalia-based terrorist group affiliated with al-Qaeda, leverages Israeli recognition of Somaliland as a powerful recruitment and propaganda tool. The group frames the recognition as proof that the FGS is weak and unable to defend Somali territorial integrity, while simultaneously portraying Somaliland as a "Zionist-Emirati colony" betraying Islamic solidarity.

This narrative potentially resonates beyond al-Shabaab's traditional base, appealing to Somali nationalists who oppose partition on secular grounds and to Muslims globally outraged by Israeli actions in Gaza. The group could experience a surge in recruitment, funding, and territorial control, particularly in areas where the FGS maintains only tenuous authority.

Under this scenario, al-Shabaab might:

• Launch spectacular terrorist attacks against Israeli, Emirati, or Ethiopian targets in the region
• Significantly expand territorial control in southern and central Somalia
• Establish a shadow government that challenges the FGS's legitimacy more effectively than at any point since 2012
• Conduct attacks beyond Somalia, potentially targeting Kenyan, Ethiopian, or even Somaliland civilian infrastructure

G7 Risk Assessment: A total collapse of security in central and southern Somalia would necessitate a new, significantly more costly international intervention. The African Union Transition Mission in Somalia (ATMIS), already struggling with limited resources and mandates, would likely prove inadequate to contain a resurgent al-Shabaab with enhanced legitimacy.

This scenario could require a return to large-scale international military deployment comparable to the pre-2012 AMISOM mission, but in a significantly more challenging environment. With regional states divided over the Somaliland question and Turkey, Egypt, and others pursuing competing agendas, assembling an effective coalition would be far more difficult than in previous intervention efforts.

The humanitarian consequences would be severe. Somalia's fragile recovery from decades of civil war and famine could be entirely reversed, potentially creating another massive refugee crisis affecting not only neighboring states but potentially Europe as well, given established migration routes through Yemen and North Africa.

VI. Strategic Recommendations for G7 Policymakers

The Somaliland recognition crisis demands sophisticated diplomatic approaches that balance competing interests while prioritizing regional stability and the rules-based international order. The following recommendations offer pragmatic pathways through this complex landscape.

1. Establish "Special Economic Status" Framework

Rather than forcing a binary choice between full diplomatic recognition and complete isolation, G7 members should collaboratively develop a "Special Economic Territory" designation for the Berbera Corridor. This framework would:

• Allow G7 companies and financial institutions to engage directly with Somaliland authorities on commercial matters without requiring formal recognition of sovereignty
• Provide legal protection for investments and contracts through an internationally-administered arbitration mechanism
• Defer the sovereignty question while acknowledging the reality of Somaliland's separate governance structures
• Create precedent for engaging with de facto governments without undermining the principle of territorial integrity

The model could draw on historical precedents such as the Former Yugoslav Republic of Macedonia's "reference formula" used during its name dispute with Greece, or the various arrangements that have allowed international engagement with Taiwan without formal recognition. The key is creating sufficient legal clarity to enable economic development while maintaining diplomatic ambiguity on the sovereignty question.

This approach would require careful coordination among G7 members to ensure consistent policy implementation and prevent competitive dynamics where individual states rush to gain commercial advantages through premature recognition. The G7 should establish a working group on Horn of Africa policy to coordinate approaches and share intelligence on regional developments.

2. Multilateral Red Sea Forum

The urgent need is preventing zero-sum competition among regional powers from escalating into military confrontation. The G7 should take the lead in establishing a "Red Sea Security and Economic Forum" bringing together key stakeholders including:

• Core members: UAE, Saudi Arabia, Egypt, Ethiopia, Somalia, Turkey
• Observer states: Israel, Eritrea, Djibouti, Yemen (multiple representatives)
• International organizations: UN, African Union, Arab League, EU
• G7 representatives as facilitators and guarantors

The forum's mandate would include:

• Establishing confidence-building measures to prevent military miscalculation
• Creating notification protocols for military movements and exercises in Red Sea waters
• Developing shared maritime security mechanisms to combat piracy and terrorism
• Coordinating on humanitarian assistance and development initiatives
• Providing a confidential channel for diplomatic communications during crises

The forum should meet at the foreign minister level quarterly, with permanent working groups on security, economic development, and humanitarian issues meeting monthly. The G7 should offer financial support for forum operations and potentially provide neutral territory (Geneva or Oslo) for sensitive discussions.

Critical to the forum's success would be preventing it from becoming merely another venue for rhetorical confrontation. The agenda should focus initially on areas of common interest—counterterrorism, anti-piracy, search and rescue—before attempting to address the most contentious sovereignty questions. Track II diplomatic channels, involving academics and former officials, should complement the official forum to develop creative solutions outside the glare of public attention.

3. Regional Coordination Office for Counter-Terrorism

The G7 should upgrade its security presence in Hargeisa through establishment of a "Regional Counter-Terrorism and Maritime Security Coordination Office." This facility would:

• Serve as a hub for intelligence sharing on terrorist groups, particularly al-Shabaab. 
• Coordinate international efforts on counter-piracy, building on the successful models of previous anti-piracy operations
• Provide training and capacity building for Somaliland security forces in internationally-recognized best practices
• Maintain situational awareness of military movements and potential flashpoints
• Offer a discreet channel for communication with Hargeisa without implying formal recognition

The office would acknowledge the de facto security reality—that Somaliland maintains effective control over its territory and has been a relatively reliable security partner—without breaking the "One Somalia" protocol at the diplomatic level. Staff would include seconded military and intelligence officials from multiple G7 countries, operating under a mandate focused strictly on transnational security threats.

This approach parallels arrangements G7 states have made in other regions with contested sovereignty, such as the various international security presences in the Balkans or the Multinational Force and Observers in the Sinai. The key is framing the office as serving international security interests rather than legitimizing any particular sovereignty claim.

4. Somalia Support Package

To prevent complete FGS collapse and address legitimate Somali grievances, the G7 should simultaneously announce a substantial support package for Mogadishu including:

• $500 million in direct budget support contingent on governance reforms
• Enhanced security assistance, including equipment and training for Somali National Army
• Debt relief negotiations to address Somalia's $5.2 billion external debt burden
• Support for inclusive political dialogue bringing together FGS, federal member states, and civil society
• Investment in job creation programs targeting youth in areas vulnerable to al-Shabaab recruitment

This package would demonstrate that engagement with Somaliland does not come at Somalia's expense and that the international community remains committed to a stable, unified Somalia. However, the support should be genuinely conditional on progress toward inclusive governance, not simply provided unconditionally in hopes of buying FGS acquiescence to the changing regional reality.

5. Energy Security Initiative

Given the centrality of energy resources to the regional competition, the G7 should sponsor an "East African Energy Security Initiative" that:

• Provides financing and technical assistance for energy infrastructure development in multiple Horn states
• Establishes transparent, internationally-recognized frameworks for exploration and development rights
• Encourages regional energy market integration to reduce zero-sum competition
• Links energy development to binding arbitration mechanisms for territorial and maritime disputes
• Offers alternative pathways for Ethiopia to gain energy export capabilities beyond the contested Berbera route

This initiative would address one of the core drivers of regional tensions—competition for scarce energy resources and export routes—by expanding the pie rather than simply accepting current lines of competition.

VII. The China Factor: An Emerging Variable

While this analysis has focused primarily on regional powers and traditional Western interests, the People's Republic of China represents a potentially decisive variable that warrants closer examination.

China maintains significant interests in Red Sea stability through its Belt and Road Initiative investments, particularly:

• The Djibouti Free Trade Zone, a $3.5 billion project serving as China's commercial hub for Africa
• China's first overseas military base in Djibouti, hosting approximately 2,000 PLA personnel
• Significant port investments throughout the region, including in Sudan
• Growing trade relationships with Ethiopia, Kenya, and other East African states

Beijing has remained conspicuously silent on the Somaliland recognition question, a studied neutrality that reflects complex calculations. On one hand, China officially upholds principles of territorial integrity and has its own sensitivities about secessionist movements given Taiwan and Xinjiang. Supporting or even acquiescing to Somaliland's recognition could set uncomfortable precedents.

On the other hand, China's pragmatic approach to sovereignty questions—engaging with Taiwan commercially while denying its diplomatic legitimacy—suggests Beijing could accommodate a "Taiwanization" scenario for Somaliland if it serves Chinese interests. If the Berbera Corridor proves economically successful, Chinese companies could seek involvement regardless of Somaliland's diplomatic status.

The G7 should anticipate potential Chinese mediation efforts or attempts to shape outcomes favorable to Beijing's interests. China's diplomatic and economic leverage, particularly with Ethiopia and several Persian Gulf states, positions it to potentially broker arrangements the West cannot. The G7 response should be to engage constructively with Chinese initiatives that genuinely promote stability, while clearly articulating Western interests and values in the region.

Conclusion: Navigating the New Normal

Israel's recognition of Somaliland on December 26, 2025, has irrevocably altered the strategic landscape of the Horn of Africa. The thirty-year period during which Somaliland existed as a functioning state without international recognition has ended, replaced by a new era of contested legitimacy that forces both regional and global powers to make difficult choices.

The challenge for G7 policymakers is navigating between three imperatives that are in tension but not entirely contradictory:

1. Upholding the principle of territorial integrity that has undergirded the post-1945 international order and prevented countless territorial disputes from becoming violent conflicts

2. Acknowledging the reality that Somaliland has governed itself effectively for over three decades, held democratic elections, and maintained stability in a chaotic region

3. Preventing escalation of regional competition into military confrontation that would be catastrophic for Red Sea commerce and global stability

The recommendations outlined above offer pathways through this dilemma by creating diplomatic space for pragmatic engagement without forcing premature resolution of fundamental sovereignty questions. The "Special Economic Status" framework, the Multilateral Red Sea Forum, and the enhanced security coordination represent ways to work with reality while maintaining principled commitments.

The coming months will test whether the international community can develop innovative approaches to sovereignty questions in the 21st century, or whether it will retreat into rigid positions that divorce diplomatic doctrine from political reality. The stakes—measured in potential military conflict, economic disruption, and humanitarian catastrophe—could not be higher.

For the Horn of Africa, January 1, 2026, marks not an ending but a beginning of a new chapter in its complex relationship with both regional powers and the broader international system. How that chapter develops will depend on the wisdom, restraint, and creativity of policymakers in capitals from Washington to Beijing, from Cairo to Tel Aviv, and from Riyadh to Ankara. The decisions made in 2026 will shape not only the Horn's future but potentially establish precedents for how the international community manages sovereignty disputes in an increasingly multipolar world.

Geostrategic Transformation in Asymmetric Warfare: The Drone Revolution and Western Strategic Response

Executive Summary

The character of 21st-century conflict has undergone fundamental transformation, with unmanned aerial systems emerging as decisive instruments that redefine strategic calculus across all theaters. This analysis examines the operational impact, systemic implications, and required policy responses to drone proliferation, with particular focus on Iranian Shahed platforms and their global ramifications. Recent developments through December 2025 reveal an acceleration of this transformation requiring immediate G7 coordination.

I. Introduction: The Paradigm Shift in Modern Warfare

Traditional state-on-state high-intensity warfare—characterized by massed armored formations, strategic air campaigns, and naval engagements—is being fundamentally challenged by asymmetric modes of combat where low-cost technologies and scalable systems redefine strategic calculations. At the center of this evolution are unmanned aerial systems, particularly loitering munitions and attack drones, which have become decisive instruments for both state and non-state actors.

The operational tempo of this transformation cannot be overstated. In December 2025, the United States deployed its first operational squadron of Shahed-136 clones—the LUCAS (Low-cost Uncrewed Combat Attack System)—to the Middle East under Task Force Scorpion Strike, marking a watershed acknowledgment that the asymmetric drone paradigm now defines contemporary conflict.

II. The Strategic Economics of Drone Warfare

A. Cost-Exchange Asymmetry and Attritional Warfare

The fundamental strategic advantage of contemporary drone warfare lies in its radical transformation of cost-exchange ratios. While the Shahed-136 costs between $20,000–$50,000 to produce, and the U.S. LUCAS variant approximately $35,000, defensive interceptors range from hundreds of thousands to millions of dollars per unit. This disparity enables adversaries to impose unsustainable attrition on defender resources through sheer volume.

In November 2025, Russia launched 5,447 Shahed-type drones against Ukraine, averaging 182 per day, with approximately 59% designated as strike platforms. This sustained operational tempo—maintained consistently since summer 2025 at approximately 5,375 drones monthly—demonstrates the maturation of mass-production drone warfare as standard operational doctrine rather than experimental innovation.

The economic calculus is stark: defending against 400 Shahed drones using Patriot interceptors would cost approximately $1.6 billion, while the attacking force expends roughly $4 million. This inverse relationship fundamentally challenges conventional defense planning predicated on technological superiority and precision engagement.

B. Operational Saturation and Societal Pressure

Beyond pure economics, sustained drone campaigns impose continuous operational strain and psychological pressure on both military forces and civilian populations. While Russian Shahed effectiveness in November 2025 averaged between 11.5% and 18.7% target engagement, during concentrated attacks involving 100–200 drones, effectiveness increased to 40–50%. This demonstrates that even with high attrition, volumetric approaches achieve strategic effects by overwhelming defensive capacity during critical windows.

Persistent nightly attacks generate cascading effects: degraded civilian morale, disrupted economic activity, and creation of an enduring sense of vulnerability. These psychological dimensions create strategic pressure independent of purely military calculations, effectively weaponizing infrastructure vulnerability and societal resilience as targets.

C. Democratized Access to Strategic Effect

Unlike conventional air power requiring advanced industrial bases and extensive training infrastructure, drone systems can be fielded with minimal resources. The LUCAS drone can be launched using catapults, rocket-assisted takeoff, or vehicle-mounted systems, exemplifying the operational flexibility that enables dispersed, mobile employment patterns resistant to counterforce targeting.

III. Iran's Strategic Innovation: The Shahed Paradigm

A. Technical Evolution and Battlefield Adaptation

Iran's Shahed family represents more than individual weapons systems; it embodies a strategic approach to asymmetric capability development under resource constraint. A Shahed-136MS variant recovered in Ukraine's Sumy region in June 2025 revealed active co-development between Tehran and Moscow, incorporating AI-assisted targeting, military-grade communications, and enhanced anti-jamming technologies.

In June 2025, Iran unveiled the Shahed-107, equipped with a 15-kilogram cumulative fragmentation warhead and 300-kilometer operating range, demonstrating continuous platform diversification. Ukrainian forces achieved the first confirmed downing of this variant on December 30, 2025, using FPV interceptor drones, highlighting the perpetual action-reaction cycle driving innovation on both offensive and defensive fronts.

B. Iran-Russia Technology Transfer: A Strategic Partnership

The Iran-Russia drone cooperation represents one of the most significant defense-industrial partnerships between sanctioned states in recent decades. Russia's Alabuga Special Economic Zone facility in Tatarstan has evolved through three phases—initial assembly of Iranian kits, hybrid production using mixed components, and full-scale local manufacturing claiming capacity to build 6,000 drones annually by mid-2025.

This partnership extends beyond technology transfer; Iran seeks to leverage drone provision for access to advanced Russian military technology, while Russia expands sharing of space, nuclear, and missile-applicable capabilities. In December 2025, Russia launched three Iranian satellites into orbit from Vostochny Cosmodrome, demonstrating cooperation expanding into the space domain.

The financial architecture supporting this partnership reveals sophisticated sanctions evasion. Transactions employed gold ingots to circumvent U.S. dollar dependence and minimize digital footprints, with one documented transfer involving $104 million in gold. Both parties exploited UAE Free Zone Establishments to streamline asset transfers while minimizing direct contact.

IV. Global Proliferation and Strategic Diffusion

A. The American Response: Reversing the Innovation Gap

The U.S. Central Command's December 2025 deployment of LUCAS drones to the Middle East marks America's first operational unit armed with Shahed-like loitering munitions. This represents a fundamental strategic acknowledgment that quality-over-quantity doctrines require urgent revision.

The U.S. Marine Corps began testing LUCAS variants at Yuma Proving Ground in December 2025, while USS Santa Barbara successfully test-launched a LUCAS drone at sea on December 16, 2025, in the Persian Gulf, demonstrating rapid integration across service branches and operational domains.

Multiple U.S. companies now compete in this space: SpektreWorks' LUCAS platform, Griffon Aerospace's MQM-172 Arrowhead, and Orion's Artemis system featuring AI-enabled operations in GPS-denied environments. However, production scaling remains inadequate. The U.S. Army plans to procure at least one million drones over the next two to three years, rising to annual purchases of "half a million to millions" thereafter, representing a steep increase from approximately 50,000 units currently fielded.

B. China's Industrial Dominance and Strategic Implications

China's drone production capacity represents "a significant multiple" of U.S. capacity, creating strategic vulnerability in any sustained conflict. Chinese civilian factories could retool within one year to produce one billion weaponized drones annually using under 1% of existing assembly capacity without significantly straining battery or circuit board output.

China's drone market is projected to surpass 180 billion yuan in 2025, with the nation holding nearly 70% of the global commercial drone market through companies like DJI. As of 2024, China dominated 80–90% of global drone production, along with control of rare earth minerals and advanced microchips vital to defense applications.

China has developed multiple Shahed analogues: the ASN-301 for radar suppression missions and the Sunflower-200, a close Shahed-136 imitation reportedly used by Sudan's Rapid Support Forces during civil conflict. The People's Liberation Army is drawing extensive lessons from Russia-Ukraine drone warfare, particularly regarding swarms of expendable ultra-low-cost platforms that leverage China's manufacturing capacity.

C. European Integration and NATO Coordination

Following Russian drone incursions into Polish airspace in September 2025, NATO Defence Ministers agreed to implement additional counter-drone measures, testing integrated systems under Operation Eastern Sentry. From November 10-21, 2025, NATO conducted counter-drone technology assessments at Putlos Training Area in Germany, bringing together soldiers, procurement teams, and industry partners.

NATO's senior military officials emphasized that counter-drone technology "has to be fielded in months, in a multi-domain approach," not years, requiring low-cost sensors and effectors beyond traditional fighter aircraft deployments.

In November 2025, Ukraine operationalized a French-built Atreyd system consisting of radar-triggered FPV drones using AI to detect and intercept Russian platforms, with interceptors costing a few thousand dollars each and capable of reuse. The American-developed Merops system, deployed along NATO's Eastern Flank to Poland and Romania, has achieved over 1,000 successful Shahed intercepts with a 95% success rate using $15,000 Surveyor drones.

France has developed the MBDA one-way drone with 500-kilometer range and 40-kilogram warhead capacity, targeting 1,000 units monthly production. Britain's Sky Shark achieves 450 km/h speed but with reduced range and higher unit costs ($67,000) compared to Shahed platforms.

V. Counter-Drone Technologies: The Defensive Revolution

A. Directed Energy Weapons as Force Multipliers

By 2025, directed energy weapons have transformed from experimental concepts to necessary operational capabilities, with the global market projected to grow from $7.9 billion to $39.9 billion over the next decade at 17.6% compound annual growth.

The United Kingdom's DragonFire laser system, reportedly in the 50-kilowatt class, has been tested against drones and mortar rounds and is expected to equip ships, aircraft, and ground vehicles from 2027. British trials in 2025 demonstrated radio-frequency directed-energy systems' ability to disable large numbers of drones simultaneously, with reported engagement costs measured in pennies.

The U.S. military fields multiple directed-energy platforms: the Navy's Laser Weapon System (LaWS), the Army's DE-MSHORAD (Directed Energy-Maneuver Short-Range Air Defense), and the Air Force's THOR (Tactical High-power Operational Responder) high-power microwave system. In September 2025, defense technology company Epirus delivered its ExDECS high-power microwave prototype to the Naval Surface Warfare Center Dahlgren to support Marine Corps Low Altitude Air Defense experimentation.

B. Layered Defense Integration and Electronic Warfare

Operational resilience against drone threats requires layered active defensive systems with multiple sensor and effector types, integrated with passive defense measures. No single technology provides comprehensive protection; effectiveness derives from system integration and rapid adaptation.

Ukrainian forces reported in July 2025 that 9 out of 10 Shahed drones shot down resulted from interceptor drone employment, demonstrating the primacy of cost-effective kinetic solutions over expensive missile interceptors for this threat class.

Ukrainian interceptor systems like the P1-SUN, developed by SkyFall with modular design and 3D-printed airframe, initially achieved 300 km/h speeds subsequently increased by 50%, with altitude capabilities up to 5 kilometers. The Merops counter-drone system has downed over 1,000 Shahed platforms, while the domestically-produced Sting interceptor FPV drone by Wild Hornets has proven effective against evolving threats including the newly-introduced Shahed-107.

VI. Strategic Implications for G7 Policy Architecture

A. Industrial Base Transformation

The drone revolution exposes fundamental inadequacies in Western defense-industrial models predicated on low-rate production of exquisite systems. NATO faces technology gaps where adversary innovation pace outstrips allied acquisition processes without coordinated procurement, streamlined processes, and technology-sharing.

China's ability to leverage civilian manufacturing capacity for military purposes through civil-military fusion represents a structural advantage Western democracies struggle to replicate. Chinese Communist Party leadership under Xi Jinping explicitly calls for accelerating "unmanned intelligent combat forces," with all PLA services and theater commands now integrating UAVs across ISR, strike, air-to-air combat, anti-submarine warfare, and air defense missions.

B. Supply Chain Sovereignty and Strategic Dependencies

China's dominance over 80–90% of global drone production, combined with control of rare earth minerals and advanced microchips, represents strategic leverage in conflict scenarios enabling Beijing to dictate Western rearmament pace. The American Security Drone Act passed in the 2024 NDAA bans federal entities from buying Chinese-manufactured UAS starting December 2025, but alternative supply chains remain insufficient.

Multiple U.S. states—Arkansas, Florida, Hawaii, Mississippi, Nevada, Texas, Tennessee, and Utah—have restricted Chinese drone use by state agencies, mirroring federal law. However, in the United Kingdom, 230 of 337 police drones are DJI products, while Australian federal agencies owned several thousand Chinese systems before military groundings, demonstrating pervasive dependency.

C. Doctrine and Operational Adaptation

NATO must increase drone production while maintaining strong conventional capabilities and balanced force posture. The future battlespace rewards hybrid designs combining unmanned systems with resilient conventional assets. Over-reliance on drones without robust combined-arms integration could erode deterrence capabilities.

Former Commander of U.S. Army Europe Ben Hodges assessed that NATO has not "mentally prepared" for daily Russian drone strikes involving hundreds of aircraft, noting "we absolutely have not exercised for that". This psychological and doctrinal gap requires urgent attention.

D. Coalition Coordination and Rapid Acquisition

In November 2025, NATO and Ukraine launched a joint defense innovation initiative offering grants for counter-drone and secure battlefield communications capabilities, with future focus on signals intelligence, uncrewed ground systems, and robust navigation in contested electromagnetic environments.

The U.S. Army plans four counter-UAS competitions in 2025: replacing Forward Area Air Defense Command and Control systems, next-generation counter-UAS missiles, handheld counter-UAS systems, and flat panel array radars for Mobile-Low, Slow, Small Unmanned Aircraft Integrated Defeat Systems. Such efforts require G7-wide coordination to leverage collective industrial capacity and avoid redundant development.

E. Sanctions Architecture and Technology Denial

The Iran-Russia partnership demonstrates that sanctions alone cannot prevent technology transfer between determined adversaries possessing sophisticated evasion networks. Following U.S. sanctions on Sahara Thunder in April 2024, the company began liquidation with successor entities likely assuming its functions.

Effective technology denial requires: enhanced intelligence cooperation to monitor production and logistics chains; coordinated legal action against facilitating entities; diplomatic pressure on jurisdictions enabling sanctions circumvention (particularly UAE Free Zones); and export control harmonization across G7 members to close regulatory gaps.

VII. Required Strategic Response Framework

A. Immediate Actions (0-12 Months)

1. Production Acceleration: Establish emergency procurement authorities enabling rapid scaling of low-cost interceptor drone acquisition. Target monthly production rates of 10,000+ units across G7 nations.

2. Capability Integration: Deploy directed-energy weapons systems along critical infrastructure and force concentration areas. Prioritize high-power microwave systems for swarm defense and laser systems for point defense.

3. Electronic Warfare Enhancement: Accelerate GPS-denied navigation systems, anti-jamming technologies, and communications security for friendly drone operations while expanding EW capacity against adversary platforms.

4. Training and Doctrine: Implement intensive counter-drone training across all service branches. Revise operational doctrine to assume persistent drone threat environment in all scenarios.

B. Mid-Term Initiatives (1-3 Years)

1. Industrial Base Restructuring: Incentivize decentralized, rapid-turnaround manufacturing through Defense Production Act authorities (U.S.) and equivalent mechanisms in allied nations. Establish manufacturing surge capacity enabling 10x production increases within 90 days.

2. Technology Development: Invest in AI-enabled autonomous counter-drone systems, swarm coordination technologies, and adaptive sensor fusion. Prioritize modular, software-defined architectures enabling rapid capability updates.

3. Allied Standardization: Develop NATO-wide counter-drone interoperability standards ensuring systems from different producers can operate within integrated defensive networks.

4. Supply Chain Diversification: Eliminate dependencies on adversary-controlled supply chains for critical components. Establish secure supply corridors for rare earths, batteries, semiconductors, and specialized materials.

C. Long-Term Strategic Positioning (3-10 Years)

1. Autonomous Systems Leadership: Maintain technological advantage in AI-enabled autonomous systems through sustained R&D investment, protection of intellectual property, and aggressive technology denial to adversaries.

2. Deterrence Modernization: Integrate mass drone capabilities into strategic deterrence calculations. Develop credible offensive drone swarm capabilities threatening adversary critical infrastructure.

3. International Norms: Establish binding international frameworks limiting destabilizing drone proliferation to non-state actors while preserving legitimate defense applications.

4. Resilience Investment: Harden critical infrastructure against drone attack through physical hardening, redundancy enhancement, and rapid-recovery capabilities.

VIII. Conclusion

The rise of mass-production drone warfare—exemplified by Iranian Shahed platforms and their global proliferation—represents a fundamental transformation in how power is contested. December 2025 developments underscore acceleration rather than deceleration of this trend: American deployment of Shahed clones, Iranian satellite launches via Russian vehicles, sustained Russian drone campaigns exceeding 5,000 monthly launches, and NATO's urgent mobilization of counter-drone capabilities.

For G7 policy makers, the strategic imperative is unambiguous: asymmetric drone warfare is not an emerging threat but a present reality demanding comprehensive response. Success requires technological innovation, industrial agility, doctrinal adaptation, coalition coordination, and, most critically, recognition that traditional defense paradigms predicated on exquisite low-rate production are obsolete.

The drone revolution rewards those who innovate rapidly, produce at scale, integrate flexibly, and adapt continuously. Nations failing to embrace this reality risk strategic irrelevance regardless of conventional military superiority. The asymmetric battlefield of the 21st century demands not merely new tools but a fundamental strategic mindset transformation—one already achieved by adversaries and now requiring urgent adoption by the democratic world.

The 2025 Saudi-UAE Rift and Yemen's Accelerating Fragmentation: A Geostrategic Analysis

 The Collapse of the Persian Gulf Cooperation Council Unity and the Emergence of Competing Proxy States

The geostrategic landscape of the Arabian Peninsula has undergone a seismic transformation in December 2025. What began as tactical divergence between Saudi Arabia and the United Arab Emirates over Yemen policy has escalated into direct kinetic confrontation, exposing fundamental rifts within the Persian Gulf Cooperation Council architecture. The December 30 Saudi airstrikes against UAE-supplied military equipment at Mukalla port represent not merely a policy disagreement but a threshold crossing in relations between two powers that collectively control trillions in global assets and anchor American security strategy in the  Persian Gulf.

This analysis examines the multilayered dimensions of this crisis: the military offensive that rewrote Yemen's territorial map, the strategic calculations driving Riyadh and Abu Dhabi's divergent visions, the transnational implications for regional stability, and the profound challenges this fragmentation poses to Western policy frameworks predicated on the  the Persian Gulf Cooperation Council unity.

I. Operation Promising Future: The STC's Territorial Consolidation

A. The December Offensive and Rapid Territorial Gains

On December 2, 2025, the Southern Transitional Council launched "Operation Promising Future," a coordinated military campaign that shattered the three-year stalemate in southern Yemen. The offensive's speed and scope caught regional observers off guard, suggesting months of clandestine preparation and logistical positioning.

Territorial Breakthrough in Hadhramaut Valley: Within 48 hours of initiating operations, STC forces captured Seiyun, the regional capital of Hadhramaut Governorate and Yemen's largest province by area. The city fell with minimal resistance as units from the Yemeni government's First Military Region Command either withdrew or surrendered their positions without significant engagement. By December 4, STC forces had seized the PetroMasila oil facility, Yemen's largest petroleum company, effectively gaining control over infrastructure representing approximately 80% of Yemen's modest oil reserves.

Expansion into Al-Mahrah: The offensive continued eastward into Al-Mahrah Governorate, a strategic territory bordering Oman. By mid-December, the STC controlled most of the governorate's key infrastructure, including border crossings and coastal access points. This expansion gave the STC effective control over approximately 52% of Yemen's total territory, encompassing nearly the entire geographical footprint of the former People's Democratic Republic of Yemen (South Yemen), which existed as an independent state from 1967 to 1990.

Military Capability Assessment: The STC demonstrated qualitative improvements in its military effectiveness that distinguish this offensive from previous engagements. Open-source intelligence and battlefield footage confirmed the deployment of Chinese-manufactured AH-4 155mm howitzers, providing the STC with artillery range and precision capabilities that substantially outmatch government forces' Soviet-era equipment. Additionally, hundreds of UAE-supplied modern armored vehicles enabled rapid maneuverability across Hadhramaut's vast desert terrain, allowing STC forces to outpace potential defensive responses.

B. The Collapse of Government Resistance

The near-total absence of sustained military resistance from government forces requires explanation beyond simple military superiority. Several interrelated factors contributed to this collapse:

Command Paralysis: Presidential Leadership Council Chairman Rashad al-Alimi issued no public statements during the initial 72 hours of the offensive and did not order First Military Region forces to mount defensive operations. This command vacuum created confusion among field commanders regarding engagement protocols and strategic priorities.

Saudi-Trained Force Dissolution: The Saudi-trained National Shield Forces, intended as a reliable counter to both STC expansion and Houthi threats, largely melted away without engagement. This dissolution suggests either insufficient institutional cohesion or tacit understanding that resistance would be futile given broader strategic calculations.

Tribal Calculations: Local tribal leadership in Hadhramaut, traditionally aligned with Saudi Arabia through patronage networks, made rapid assessments of shifting power dynamics. Many concluded that accommodation with the STC represented a more viable path than resistance on behalf of an increasingly hollow central government.

C. Economic and Resource Control

The STC's capture of oil infrastructure fundamentally alters Yemen's economic equation. PetroMasila's production suspension has created acute energy shortages in government-controlled areas while simultaneously providing the STC with decisive leverage over any future revenue-sharing arrangements. Control over 80% of Yemen's oil reserves positions the STC to establish de facto economic independence from any central authority, creating facts on the ground that will be extraordinarily difficult to reverse through diplomatic processes alone.

II. The Mukalla Strike: Threshold Crossing in the Persian Gulf Cooperation Council Relations

A. The Events of December 30, 2025

The crisis reached its inflection point when the Royal Saudi Air Force conducted airstrikes targeting military cargo at Mukalla port. Saudi military intelligence had tracked two vessels originating from the UAE port of Fujairah. According to coalition statements, the ships disabled their Automatic Identification Systems upon departure and arrived at Mukalla between December 28-29, unloading significant quantities of military equipment.

Target Profile: The Saudi-led coalition identified the primary vessel as the Greenland, a roll-on/roll-off cargo ship flagged under St. Kitts. Maritime tracking data confirmed the vessel's presence in Fujairah on December 22 and arrival in Mukalla on December 27. The cargo reportedly included Chinese AH-4 howitzers, advanced armored vehicles, and substantial quantities of ammunition specifically calibrated for systems already in STC possession.

Saudi Justification: The Saudi Press Agency statement characterized the weapons as constituting "an imminent threat" and "an escalation that threatens peace and stability." Saudi Foreign Ministry officials went further, directly linking the UAE to pressure on the STC to conduct military operations near Saudi borders, framing Emirati actions as threatening to Saudi national security—language typically reserved for adversaries, not allies.

Immediate Aftermath: Within hours of the strike, PLC Chairman al-Alimi delivered a televised address ordering all UAE forces to leave Yemen within 24 hours, canceling the bilateral defense agreement with the UAE, announcing a 72-hour air, land, and sea blockade on STC-held territories, and declaring a 90-day state of emergency. This represented the most direct repudiation of UAE involvement in Yemen since the 2015 coalition formation.

B. The UAE Response and Strategic Withdrawal

The UAE's initial response denied any weapons transfer, stating that vehicles unloaded at Mukalla were intended for UAE forces operating in Yemen and that "high-level coordination" with Saudi Arabia had occurred regarding the shipment. However, this account contradicted Saudi intelligence assessments and failed to explain why vehicles designated for UAE forces would be unloaded at a port under STC control rather than areas with actual UAE military presence.

By late December 30, the UAE Ministry of Defense announced it would "voluntarily" withdraw its remaining counterterrorism units from Yemen. This strategic repositioning serves multiple functions: it provides diplomatic cover for de-escalation with Riyadh, removes the minimal remaining formal UAE military presence while leaving intact the 90,000-strong STC forces that remain loyal to Abu Dhabi, and positions the UAE to claim it has responded to Saudi concerns while fundamentally preserving its strategic position in southern Yemen.

III. Strategic Divergence: Incompatible Visions for Yemen's Future

The crisis reflects fundamentally incompatible strategic objectives between Saudi Arabia and the UAE, each flowing from distinct threat perceptions and regional priorities.

A. The Saudi Strategic Framework

Border Security Imperative: Saudi Arabia shares a 1,458-kilometer border with Yemen, with Hadhramaut and Al-Mahrah governorates comprising a significant portion of this frontier. Riyadh's strategic calculus prioritizes border stability above all other considerations. The presence of 20,000 highly mobile, UAE-equipped STC fighters along this border represents an unacceptable security vulnerability from the Saudi perspective. Historically, Saudi Arabia managed this border through patronage of local tribes and support for a weak but unified Yemeni government—a formula that the STC's consolidation has now disrupted.

Political Unity Doctrine: Saudi Arabia has consistently advocated for a unified Yemeni state under the Presidential Leadership Council framework. This position reflects both ideological commitment to territorial integrity and practical calculation that only a unified (albeit weak) Yemeni government provides a viable negotiating partner for eventual peace talks with the Houthis. A fragmented Yemen complicates Saudi efforts to achieve a durable settlement that secures its southern border from Houthi threats.

Credibility Costs: Saudi Arabia's inability to protect its Yemeni allies from STC advances imposes significant credibility costs. Tribal leaders who accepted Saudi patronage now question Riyadh's capacity to fulfill security commitments, potentially undermining future influence operations throughout the Arabian Peninsula.

Military Response Posture: As of late December, Saudi Arabia had amassed 15,000-20,000 troops along the Yemen border, signaling credible threat of ground intervention should the STC refuse to withdraw from recently captured territories. This troop concentration represents the most significant Saudi military deployment to the Yemen border since the initial 2015 intervention.

B. The UAE Strategic Framework

Maritime Hegemony Priority: The UAE's strategic interests in Yemen center overwhelmingly on maritime access and control. The Bab al-Mandab Strait, through which approximately 10% of global seaborne trade and significant energy shipments transit, represents a chokepoint of supreme strategic value. By backing the STC's control of southern coastal areas, the UAE positions itself to influence shipping patterns, project naval power into the Red Sea and Gulf of Aden, and maintain strategic depth against both Iranian influence and Islamist movements.

Ideological Anti-Islamism: Abu Dhabi views the Yemen conflict through an ideological lens focused on countering the Muslim Brotherhood and affiliated Islamist movements. The UAE considers the Al-Islah party, a major component of the Saudi-backed government and closely aligned with the Muslim Brotherhood, as a fundamental threat. By empowering the STC, which explicitly positions itself as secular and opposed to Islamist governance, the UAE advances its broader regional campaign against political Islam.

Resource Access and Economic Zones: The STC's control over port cities including Aden, Mukalla, and potential access to Al-Mahrah's undeveloped port infrastructure provides the UAE with economic and logistical advantages. These ports can serve as transshipment points, naval facilities, and economic zones integrated into UAE commercial networks.

Proxy State Model: The UAE's approach in Yemen mirrors its broader regional strategy of empowering non-state actors and sub-national entities that serve Emirati interests while maintaining plausible deniability. This model, observed in Libya with support for Khalifa Haftar, in Somalia through backing of Puntland and Somaliland authorities, and now in Yemen with the STC, allows the UAE to project influence without the costs and visibility of direct military occupation.

Permanent Fragmentation as Acceptable Outcome: Unlike Saudi Arabia, the UAE appears to have concluded that Yemen's permanent fragmentation serves Emirati interests. A weak or failed central government eliminates potential opposition to UAE influence in the south while preventing any unified Yemeni state from challenging the Persian Gulf maritime dominance.

IV. The Israel-UAE Dimension: Abraham Accords as Strategic Divergence Point

The UAE's normalization with Israel through the 2020 Abraham Accords introduces a critical dimension to the Saudi-UAE rift that extends beyond Yemen. This relationship represents both a strategic asset for Abu Dhabi and a complicating factor in the Persian Gulf Cooperation Council unity, particularly regarding Saudi Arabia's own calculations about regional leadership and relations with Israel.

A. The UAE-Israel Strategic Partnership

Since signing the Abraham Accords on September 15, 2020, the UAE and Israel have developed what analysts describe as a "Dynamic Security Regime"—a relationship characterized by deep defense cooperation, intelligence sharing, and economic integration that has proven remarkably resilient despite regional turbulence.

Defense and Intelligence Cooperation: The UAE-Israel relationship has evolved into one of the most substantive security partnerships in the Middle East. Israel has supplied the UAE with advanced defense systems including Barak air-defense batteries deployed in 2022, SPYDER mobile air-defense systems, and intelligence-gathering capabilities. In 2021 alone, the UAE and Bahrain purchased over $853 million in arms from Israel, with defense exports reaching record levels. The relationship proved operationally significant during the April and October 2024 Iranian missile attacks on Israel and the 12-day Israel-Iran war in June 2025, when coordination through U.S. CENTCOM integration provided crucial defensive capabilities.

Economic Integration: Trade between the UAE and Israel surged from virtually nothing in 2019 to approximately $3 billion annually by 2023-2024. The UAE earmarked $10 billion in investments in Israel's strategic sectors including energy, manufacturing, and healthcare. Over 500 Israeli companies established presence in the UAE by 2022, with projections suggesting this number would double. The relationship enabled establishment of a land route for Israeli goods through Jordan and Saudi Arabia to bypass Houthi attacks in the Red Sea, demonstrating how Israel-UAE ties reshape regional logistics.

Technology Transfer and Industrial Cooperation: Beyond simple arms purchases, the UAE has pursued sophisticated technology transfer agreements. The proposed Hermes 900 UAV deal with Elbit Systems includes phased technology transfer leading to eventual domestic production by UAE's EDGE Group, exemplifying Abu Dhabi's strategy of transforming from importer to manufacturer. This aligns with UAE's 2025-2028 strategic plan to strengthen its indigenous defense sector while providing Israel expanded access to the Persian Gulf defense markets.

B. Tensions and Red Lines

Despite this deep cooperation, the relationship has faced significant strains, particularly over Israeli policies toward Palestinians:

West Bank Annexation Warning: In August-October 2025, UAE officials issued unprecedented public warnings that Israeli annexation of West Bank territories would constitute a "red line" that could fundamentally damage the Abraham Accords. Lana Nusseibah, UAE Special Envoy and former UN Ambassador, stated such moves would "foreclose the idea of regional integration and be the death knell of the two-state solution." This marked the first time the UAE explicitly threatened consequences for Israeli policy decisions since normalization.

Gaza War Complications: The October 7, 2023 Hamas attack and subsequent Gaza conflict created substantial political pressures on the UAE's relationship with Israel. Public opinion in the UAE and broader Arab world turned sharply against normalization, though the government maintained diplomatic relations and continued defense cooperation. In October 2025, Dubai Airshow organizers announced Israeli defense companies could not participate—a decision reflecting growing political sensitivities even as underlying security cooperation continued.

Divergent Iran Strategies: A fundamental strategic divergence has emerged: Israel has pursued a maximalist military approach toward Iran and its regional proxies, while  the Persian Gulf Cooperation Council states including the UAE have prioritized stability and sought to normalize relations with Tehran. This creates tension between the UAE's security partnership with Israel and its desire to reduce regional temperature and protect economic interests.

C. The Saudi Position: Outside Looking In

Saudi Arabia's relationship with the Abraham Accords framework creates a complex triangular dynamic:

Strategic Isolation: While the UAE normalized relations with Israel in 2020 and developed deep security ties, Saudi Arabia has remained outside the Abraham Accords despite extensive discussions. This positions Riyadh in the awkward position of watching its primary the Persian Gulf Cooperation Council rival develop capabilities and relationships that enhance UAE regional standing while Saudi Arabia maintains traditional Arab League positions on Israel-Palestine relations.

Conditional Normalization: Saudi Arabia has consistently stated that normalization with Israel requires "credible, irreversible efforts towards Palestinian statehood" and a clear pathway to a two-state solution. Crown Prince Mohammed bin Salman, during his November 2025 meeting with President Trump, reiterated that while Saudi Arabia "wants to join the Abraham Accords," it needs "a clear path toward a two-state solution." This conditionality distinguishes Saudi Arabia's approach from the UAE's willingness to normalize without Palestinian preconditions.

Shifting U.S. Dynamics: The Trump administration's November 2025 approach to Saudi Arabia marked a significant shift: Washington provided Saudi Arabia with F-35 fighters, strategic security agreements, major non-NATO ally status, and critical technology partnerships without requiring Israeli normalization as a precondition. This represents a fundamental departure from previous linkage strategies and potentially removes U.S. leverage for pushing Saudi-Israeli rapprochement. As one analysis noted, "Washington's ability to condition strategic cooperation on political deliverables has diminished."

Regional Leadership Implications: Saudi Arabia positions itself as leader of the Arab and Muslim world. The UAE's independent relationship with Israel—and willingness to act on its own strategic logic rather than collective Arab positions—challenges Saudi regional leadership. If Saudi Arabia were to normalize with Israel, it would carry far greater symbolic weight across the Muslim world than the UAE's decision, but also carries greater domestic and regional political risk.

D. The Yemen Connection: How Abraham Accords Complicate the Crisis

The Israel-UAE relationship adds several layers of complexity to the Yemen crisis:

Enhanced UAE Capabilities: Israeli defense technology and intelligence support have materially enhanced UAE military capabilities, including those deployed to support the STC in Yemen. Israeli air defense systems protect UAE territory from potential Houthi retaliation, reducing the costs and risks of UAE's Yemen intervention. This technological edge, unavailable to Saudi Arabia, contributes to the military capability asymmetry between STC forces (backed by Israeli-equipped UAE) and Saudi-backed government forces.

U.S. Triangulation: The UAE's relationship with both the United States and Israel creates diplomatic advantages that Saudi Arabia lacks. When tensions with Riyadh escalate, the UAE can leverage its Abraham Accords partnership and its position as a key U.S. ally to complicate American pressure. This was evident in October 2025 when reports indicated that UAE-backed forces in Sudan received little significant U.S. pushback despite concerns about human rights violations.

Saudi Frustration Amplification: Saudi Arabia's perception that the UAE gains strategic advantages through the Abraham Accords while pursuing policies harmful to Saudi interests in Yemen and Sudan amplifies Riyadh's frustration. The December 30 Mukalla airstrikes must be understood partly as Saudi Arabia signaling that it will not tolerate UAE exploitation of these advantages at Saudi expense.

Future Saudi-Israel Normalization Complications: The Yemen crisis significantly complicates any potential Saudi-Israeli normalization. If Saudi Arabia perceives that normalization would strengthen the UAE's position by legitimizing the very capabilities and relationships Abu Dhabi uses against Saudi interests, Riyadh's incentives for normalization decline. Conversely, some Saudi strategists might view their own normalization as necessary to level the playing field with the UAE.

E. The Palestinian Question as Wedge and Constraint

UAE Flexibility vs. Saudi Constraints: The UAE's willingness to pursue normalization without resolving the Palestinian issue reflects its more technocratic, economically-focused foreign policy approach. Saudi Arabia, as custodian of Islam's two holiest sites and claiming leadership of the Arab world, faces far greater domestic and regional constraints. The UAE can frame its Israel relationship as pragmatic strategic calculation; Saudi Arabia would face charges of betraying Islamic and Arab causes.

Divergent Priorities: The UAE prioritizes containing political Islam (including Hamas and the Muslim Brotherhood), securing maritime access, and advancing economic diversification. These interests align substantially with Israel's. Saudi Arabia's priorities—border security, regional stability, managing internal religious constituencies, and maintaining Arab world leadership—create a different calculation where Palestinian cause remains central to legitimacy.

Competitive Dynamics: If Saudi Arabia eventually normalizes with Israel, it would overshadow the UAE's role as primary Arab partner and potentially shift the center of Arab-Israeli relations from Abu Dhabi to Riyadh. This creates UAE incentives to maintain its first-mover advantages and deepen its Israel relationship before potential Saudi entry dilutes its special position.

V. The Broader Context: Saudi-UAE Economic Competition and Regional Rivalry

Beyond Yemen and the Abraham Accords dimension, the December crisis reflects evolving Saudi-UAE relations across multiple economic and strategic domains.

A. Economic Competition and Vision 2030

Divergent Fiscal Realities: Saudi Arabia requires an oil price of approximately $81-82 per barrel to balance its 2025 budget, driven by massive expenditures on Vision 2030 mega-projects including NEOM, while the UAE can balance its budget at approximately $50 per barrel due to earlier diversification investments. This fiscal differential creates fundamentally different preferences regarding OPEC+ production policy and oil price targets.

Dubai vs. Riyadh Competition: Saudi Arabia's Regional Headquarters Program mandates that multinational corporations establish their Middle East regional headquarters in the Kingdom rather than traditional hubs like Dubai. This represents a direct challenge to the UAE's economic model and has created significant tension within the business communities of both nations.

Investment Allocation Pressures: Both nations have made substantial investment commitments to the United States, with the UAE pledging $1.4 trillion and Saudi Arabia committing $1 trillion to American infrastructure and technology projects. However, declining oil revenues due to price weakness have raised serious questions about the feasibility of these commitments, creating competitive dynamics over which nation can better deliver on promises to Washington.

B. OPEC+ Tensions and Market Share Competition

The Yemen crisis occurs against the backdrop of significant tensions within OPEC+ over production quotas and market strategy.

UAE Overproduction: Multiple market analysts estimate the UAE may be producing 3.3-3.4 million barrels per day, approximately 400,000-500,000 barrels above its official OPEC+ quota. This overproduction directly undermines Saudi efforts to maintain price discipline through production restraint. The UAE has invested $62 billion in expanding production capacity and has consistently lobbied for higher baseline quotas to reflect these investments.

Saudi Strategic Dilemma: Saudi Arabia faces the difficult choice between confronting UAE quota violations publicly, which risks OPEC+ fragmentation, or accepting market share erosion that undermines its own fiscal position. The Kingdom's decision to begin unwinding production cuts in 2025 may represent a shift toward prioritizing market share over price—a strategy that some analysts interpret as an attempt to discipline quota violators.

Energy Transition Positioning: Both nations recognize that peak oil demand may occur within the next decade. This reality creates incentives for the UAE to maximize current production and market share before the energy transition erodes long-term demand, while Saudi Arabia seeks to maintain price stability to fund its massive diversification investments.

C. The Sudan Parallel: Proxy Competition Across the Red Sea

The Saudi-UAE rivalry extends beyond Yemen to Sudan, where the two nations back opposing sides in that country's civil war.

UAE Support for the RSF: The UAE has provided extensive financial and military support to the Rapid Support Forces under Mohamed Hamdan Dagalo (Hemedti), including weapons, funding, and access to international gold markets for RSF-controlled mining operations. This support has enabled the RSF to achieve significant military gains despite international condemnation of human rights violations.

Saudi Support for the SAF: Saudi Arabia backs the Sudanese Armed Forces under General Abdel Fattah al-Burhan and has sought to position itself as mediator in the conflict through hosting peace talks in Jeddah. Riyadh views the Red Sea littoral as vital to its economic security and cannot accept instability or UAE-aligned militias controlling Sudan's coast.

Transregional Strategy: Analysts characterize the UAE's approach as empowering non-state actors with secessionist tendencies to secure access to strategic resources and geography. This pattern—evident in Yemen, Sudan, Libya, and Somalia—reflects a coherent regional strategy that increasingly clashes with Saudi preferences for state stability and territorial integrity.

American Diplomatic Complications: The Sudan crisis has reportedly influenced Saudi Crown Prince Mohammed bin Salman's discussions with President Trump, with Riyadh requesting not only sanctions against the RSF but also considering secondary sanctions against the UAE for its role in prolonging the conflict. These requests demonstrate the depth of Saudi frustration with UAE policies beyond Yemen alone.

VI. The Houthi Dimension: Beneficiaries of  the Persian Gulf Cooperation Council Disunity

A. Houthi Consolidation in the North

While the STC and government forces clash in the south, the Iran-aligned Houthis have solidified control over northern Yemen, including the capital Sanaa and regions containing the majority of Yemen's population.

Red Sea Campaign Pause: Following an Israel-Hamas ceasefire framework in October 2025, the Houthis paused their Red Sea shipping interdiction campaign that had disrupted approximately 10% of global seaborne trade since late 2023. However, in an undated letter to Hamas published in November, Houthi leadership explicitly reserved the right to resume attacks if Israel violates the ceasefire, maintaining this leverage as a key strategic asset.

Institutional Consolidation: Despite international isolation, the Houthis have constructed parallel governance structures in areas under their control, including taxation systems, security forces, and administrative bureaucracies. This state-building project advances while Saudi attention and resources focus on managing the STC crisis.

Marib Vulnerability: The fragmentation of the anti-Houthi coalition potentially enables renewed Houthi operations against Marib, the last significant northern governorate outside Houthi control. Marib's substantial energy resources and strategic location make it a high-value target, and its loss would represent a severe blow to any residual government authority.

B. Strategic Patience and Long-Term Positioning

The Houthis have demonstrated strategic patience, recognizing that time favors their consolidation. As long as Saudi Arabia and the UAE remain focused on their mutual rivalry rather than the Houthi threat, the Sanaa-based authorities can strengthen their position without significant external pressure. This dynamic fundamentally undermines the original rationale for the Saudi-led coalition intervention in 2015.

VII. Implications for Western Policy Frameworks

A. The Fiction of  the Persian Gulf Cooperation Council Unity

Western security architectures in the Middle East have long presupposed the Persian Gulf Cooperation Council unity as a foundational element. The December crisis exposes this assumption as increasingly fictional. The United States, United Kingdom, and European partners must recalibrate their approaches to recognize that Saudi Arabia and the UAE pursue fundamentally different regional strategies that may prove irreconcilable on key issues.

NATO Partnership Complications: Both Saudi Arabia and the UAE serve as crucial partners for Western military operations, counterterrorism efforts, and intelligence sharing. The public rupture between these partners complicates coordination on Iran policy, Red Sea security, counterterrorism operations, and broader Middle East stabilization efforts.

Investment Relationship Leverage: The UAE's $1 trillion in existing U.S. investments and $1.4 trillion in new commitments, combined with its position as the largest importer of U.S. goods in the Middle East and North Africa, provide Abu Dhabi with substantial leverage in Washington. This economic relationship has historically insulated the UAE from significant U.S. pressure over problematic foreign policy choices, including its role in Sudan and Yemen.

B. Maritime Security Reassessment

Gulf of Aden Risks: The concentration of competing naval and proxy forces in the Gulf of Aden and southern Red Sea increases the risk of miscalculation, accidental escalation, or intentional provocations. With Saudi and UAE-aligned forces operating in proximity, the potential for incidents that could spiral into broader conflict has increased substantially.

Commercial Shipping Vulnerabilities: Approximately 12% of global trade transits the Bab al-Mandab Strait and Red Sea corridor. While Houthi attacks have paused, the proliferation of competing armed groups and state actors in littoral areas creates new risks to commercial navigation. Insurance premiums for vessels transiting these waters may remain elevated even absent direct attacks.

C. Yemen Policy Reconceptualization

Accepting Tripartite Reality: Western policy has remained nominally committed to supporting a unified Yemen under the Presidential Leadership Council. This position has become increasingly divorced from ground realities. A more pragmatic approach would acknowledge Yemen's de facto fragmentation into three entities: the Houthi-controlled north, the STC-controlled south, and diminishing PLC remnants, and adjust diplomatic and humanitarian strategies accordingly.

Humanitarian Access Imperatives: Yemen remains one of the world's worst humanitarian crises, with 19.5 million people requiring assistance. The fragmentation of authority complicates aid delivery, as humanitarian organizations must negotiate access with multiple competing authorities. The December emergency and blockade declarations threaten to exacerbate civilian suffering significantly.

D. Saudi-UAE Mediation Requirement

Urgent Diplomatic Intervention: The deterioration of Saudi-UAE relations threatens regional stability far beyond Yemen. These two nations anchor American security strategy in the Persian Gulf, drive OPEC+ energy policy affecting global markets, and serve as counterweights to Iranian influence. High-level U.S. diplomatic engagement is required to prevent further escalation and establish guardrails for their competition.

Differentiated Engagement: Rather than treating Saudi Arabia and the UAE as an undifferentiated "Persian Gulf bloc," Western diplomacy must engage each nation based on its distinct interests and threat perceptions. Cookie-cutter approaches that assume parallel interests will fail to address the root causes of their divergence.

VIII. Scenario Analysis: Potential Future Trajectories

A. Scenario One: Managed Competition and Tacit Partition

In this scenario, Saudi Arabia and the UAE reach an implicit understanding that accepts Yemen's de facto partition. Saudi Arabia secures commitments that STC forces will not threaten border security, while the UAE consolidates control over southern coastal areas. This outcome would likely involve:

• STC withdrawal from positions directly threatening Saudi border areas while retaining control of ports and coastal governorates
• Renewed Saudi focus on securing a separate agreement with the Houthis to stabilize the northern border
• UAE provision of security guarantees regarding border management and counterterrorism cooperation
• Continued economic fragmentation with separate administrations in north and south

Probability Assessment: Moderate. This represents the path of least resistance for both parties but requires significant face-saving mechanisms for Saudi Arabia.

B. Scenario Two: Saudi Military Intervention

Should the STC refuse to withdraw from border areas or should further provocations occur, Saudi Arabia could launch a ground intervention in southern Yemen. This scenario would involve:

• Deployment of the 15,000-20,000 troops currently massed at the border
• Military operations to push STC forces away from sensitive border regions
• Risk of direct Saudi-Emirati proxy confrontation with potential for miscalculation
• International condemnation and potential U.S. pressure to de-escalate

Probability Assessment: Low to moderate. Saudi Arabia has strong incentives to avoid another costly military entanglement in Yemen, but domestic political pressures and security imperatives could push toward intervention if diplomatic solutions fail.

C. Scenario Three: Comprehensive Escalation

The worst-case scenario involves multiple simultaneous escalations:

• Continued Saudi-UAE tensions spilling over into OPEC+ collapse and oil market disruption
• Houthi exploitation of anti-Houthi coalition fragmentation to launch new offensives
• Resumption of Red Sea shipping attacks affecting global trade
• Spillover into Sudan conflict with increased proxy warfare
• Broader questioning of GCC institutional viability

Probability Assessment: Low but with catastrophic consequences if realized. Multiple circuit breakers exist to prevent this trajectory, but the interconnected nature of conflicts creates escalation pathways.

D. Scenario Four: Externally Mediated Settlement

International actors, potentially including the United States, Oman, or other parties, broker a comprehensive settlement involving:

• Recognition of Yemen's de facto tripartite division with formal autonomy arrangements
• International security guarantees for border areas
• Economic framework for sharing oil revenues
• Saudi-UAE reconciliation process addressing broader regional tensions

Probability Assessment: Low in the near term. The positions of key actors remain too divergent, and domestic political incentives favor continued confrontation over compromise.

IX. Strategic Recommendations

For Western Policymakers:

1. Abandon Unity Fiction: Develop separate diplomatic tracks for Saudi Arabia and UAE engagement that recognize their divergent interests rather than forcing artificial consensus.

2. Prioritize Maritime Security: Establish enhanced naval coordination mechanisms independent of fractured  Persian Gulf Cooperation Council coalition structures to protect commercial shipping and prevent escalation in contested waters.

3. Yemen Realism: Shift from rhetorical support for unified Yemen to pragmatic engagement with de facto authorities controlling territory, prioritizing humanitarian access and civilian protection.

4. Economic Leverage: Utilize economic relationships, particularly with the UAE, to impose costs for destabilizing proxy warfare while incentivizing constructive regional engagement.

5. Mediation Investment: Commit high-level diplomatic resources to Saudi-UAE reconciliation, recognizing that their relationship stability affects multiple conflicts and global economic interests.

For the Persian Gulf Cooperation Council Members:

1. Institutional Preservation: Smaller GCC members (Kuwait, Oman, Qatar, Bahrain) should actively mediate between Saudi Arabia and UAE to prevent complete organizational collapse.

2. Economic Coordination: Maintain OPEC+ cohesion despite political tensions, recognizing shared long-term interests in energy market stability.

3. Humanitarian Priority: Agree to humanitarian corridors and aid access regardless of political disputes, preventing civilian populations from becoming leverage in inter-state competition.

For International Organizations:

1. UN Mediation Enhancement: Strengthen UN Special Envoy resources and mandate to address Yemen's de facto partition reality rather than pursuing increasingly unrealistic unified government frameworks.

2. Humanitarian Coordination: Establish mechanisms for aid delivery that can function across multiple competing authorities without requiring unified permission structures.

3. Maritime Governance: Develop international protocols for managing competing naval and coast guard activities in the Red Sea and Gulf of Aden to prevent incidents.

X. Conclusion: A Threshold Moment for the Persian Gulf Geopolitics

The December 2025 crisis represents a threshold moment in Arabian Peninsula geopolitics. The public rupture between Saudi Arabia and the UAE, manifested in kinetic action at Mukalla port, reveals fault lines that extend far beyond Yemen to encompass economic competition, energy market strategy, proxy conflicts across multiple theaters, and fundamentally incompatible visions for regional order.

The crisis exposes several critical realities that Western policymakers must internalize:

First,  the Persian Gulf Cooperation Council unity cannot be assumed as a permanent feature of Middle East geopolitics. The interests that once bound Saudi Arabia and the UAE in common cause—opposition to political Islam, containment of Iran, alignment with American security architecture—have given way to competition for regional preeminence, market share, and influence over sub-state actors.

Second, Yemen's trajectory toward permanent fragmentation appears increasingly irreversible absent dramatic shifts in regional power dynamics. The military capabilities, institutional structures, and political momentum driving the STC's consolidation in the south, the Houthis' entrenchment in the north, and the Presidential Leadership Council's hollow authority cannot be easily reversed through diplomatic processes designed for unified states.

Third, Yemen's trajectory toward permanent fragmentation appears increasingly irreversible absent dramatic shifts in regional power dynamics. The military capabilities, institutional structures, and political momentum driving the STC's consolidation in the south, the Houthis' entrenchment in the north, and the Presidential Leadership Council's hollow authority cannot be easily reversed through diplomatic processes designed for unified states.

Fifth, proxy warfare has become the dominant mode of the Persian Gulf state competition, with Yemen and Sudan serving as primary battlegrounds but with patterns likely to replicate across the Horn of Africa and potentially beyond. This approach allows the Persian Gulf powers to pursue strategic objectives while maintaining plausible deniability and avoiding direct confrontation.

Fourth, energy market dynamics will increasingly constrain the Persian Gulf states' freedom of action. Lower oil prices driven by oversupply, quota violations, and demand weakness force difficult choices between fiscal sustainability and market share. These pressures may either force cooperation or intensify competition depending on how actors assess their relative positions.

The international community faces limited options for addressing this crisis, most of them unsatisfying. The most realistic near-term objective involves preventing worst-case escalation scenarios while accepting that Yemen's reunification under a single authority appears increasingly implausible. Managing the fragmentation, ensuring humanitarian access, protecting commercial shipping, and preventing spillover effects into other regional conflicts represent more achievable, if less ambitious, objectives.

For the Yemeni people, who have endured more than a decade of devastating conflict, the December crisis offers little hope for near-term relief. The transformation of their country into a battleground for competing Persian Gulf ambitions has created immense suffering, displaced millions, and destroyed social infrastructure. The international community's inability to craft effective responses to this crisis represents not merely a policy failure but a profound moral challenge.

As 2026 begins, the Arabian Peninsula confronts a new geopolitical reality: one in which former allies operate as strategic competitors, unified states fragment into proxy territories, and the assumptions undergirding decades of Western engagement require fundamental reassessment. How regional and international actors respond to this threshold moment will shape Middle East security architecture for the remainder of the decade and beyond.