Yemen’s Houthis develop network to circumvent financial sanctions
The Houthis and Iran’s Islamic Revolutionary Guard Corps (IRGC) are reorganising their financial and commercial networks to maintain military funding as the United States increases pressure on Iranian banks and money-laundering channels, Sheba Intelligence reports.
The outlet said the system uses companies and intermediaries operating through Oman and Iraq to transfer funds, trade Iranian petroleum and arrange procurement deals while concealing the identities of the ultimate beneficiaries.
The network is also reportedly intended to preserve financial and logistical support for the Houthis and Somalia’s al-Shabaab.
Instead of sending money directly to Houthi-controlled entities, the structure places multiple layers between the source of funds and their eventual recipients.
New companies are allegedly registered in the names of individuals with no publicly known links to the Houthis. These firms can then be used to import goods, make payments to foreign suppliers and provide commercial documentation for sensitive shipments.
The Houthis have reportedly pursued additional commercial registrations using nominees or previously unknown individuals in an effort to obscure the companies, exchange houses and intermediaries involved in transferring funds to overseas suppliers.
The structure is overseen through several intelligence-linked nodes, allowing companies that come under scrutiny to be replaced without disrupting the broader network.
The presence of companies registered in Oman or Iraq does not, by itself, indicate involvement by the governments or broader business communities of either country.
According to the report, the scheme relies on legitimate commercial infrastructure while concealing beneficial ownership and the ultimate destination of funds.
The network assigns different functions to Oman and Iraq. Oman provides access to international markets, financial services and commercial documentation, while Iraq offers connections to Iranian petroleum networks and intermediaries linked to Iran-backed armed groups.
The US Treasury has previously identified networks that mixed Iranian petroleum with Iraqi oil before selling it as Iraqi-origin product. It has also documented the use of smaller vessels and routes near Iraq’s Khor al-Zubair to conceal shipments of Iranian oil.
In January 2026, the US Treasury sanctioned an Oman-based company over the transportation of Iranian liquefied petroleum gas to Pakistan and Somalia during 2025.
While this case does not establish a connection to the network identified by Sheba Intelligence, it illustrates how Oman-based commercial entities have been used in sanctioned Iranian energy trade.
Iranian petroleum is reportedly a key component of the new arrangement. Oil and petroleum products can be transferred as economic assets, sold through intermediaries and converted into funds that are then used to pay foreign suppliers.
This approach reduces the need for direct transfers from Iran into accounts linked to the Houthis.
According to the mechanism, the network can generate liquidity, cover procurement expenses outside Yemen and prevent the names of Houthi beneficiaries from appearing on banking and shipping documents.
The US Treasury said in January 2026 that illicit petroleum sales generate more than $2 billion annually for the Houthis. Earlier sanctions actions have also documented the use of front companies, exchange houses and international intermediaries to transfer Iranian oil revenue and finance Houthi activities.
By Bakhtiyar Abbasov