Yemen

The 12-month probability of a new armed-conflict onset in Yemen is 8.8%, representing a high risk. Yemen’s fragmented institutions, limited economic capacity, unresolved political division, and extensive history of civil war, insurgency, foreign intervention, and shifting territorial control leave it highly vulnerable to additional armed fronts or cross-border escalation reaching its territory.

Recent reporting describes renewed Saudi-Houthi confrontation, Houthi pressure around Taiz, strikes in Saada, and missile and drone attacks involving Aden and Saudi Arabia. The Houthis, Yemen’s internationally recognised government and allied forces, Saudi Arabia, and other Gulf actors are the principal parties; Egypt’s reported defensive support for Riyadh could widen the regional dimension. A Polymarket contract gives a 94.5% probability that a US-Yemen ceasefire continues through October 31, while separate contracts indicate substantial market attention to possible Saudi action.

The largest uncertainty is whether current fighting remains a continuation of Yemen’s existing war or develops into a distinct new campaign involving additional domestic or foreign actors on Yemeni territory. Risk would rise with sustained Saudi or Egyptian operations, a new Houthi territorial offensive, or attacks drawing US or wider coalition forces into Yemen; a verified and durable cessation of cross-border strikes would lower the immediate escalation pressure.