Saudi Arabia might be losing a war it cannot afford to fight and cannot afford to quit. The Houthis have turned the kingdom’s greatest strengths—its vast geography and its oil wealth into liabilities. The question is no longer whether Riyadh can win. It is how long it would lose before it wins.
Saudi Arabia spent $83.2 billion on defense in 2025, the eighth-largest military budget on Earth. It fields Patriot and THAAD systems, F-15s, and Eurofighter Typhoons. The Houthis field a mountain militia with a budget of roughly $4.5 billion. On paper, this is not a fair fight, while on the battlefield, it is difeentely not a fight Saudi Arabia is winning.
The recent Houthi strike on Riyadh’s King Khalid International Airport killed 12 people and wounded 309, marked as the deadliest attack on the kingdom in more than a decade. Saudi air defenses failed to intercept all the offensive targets. An internal investigation is now probing how Houthi drones first jammed the air defense network before a mix of ballistic and cruise missiles struck the airport. Reports intensively mentioned that some of those missiles carried maneuvering warheads that change direction mid-flight, making them nearly impossible for Patriot systems to intercept.
The Houthis’ most advanced missile, the Palestine-2, is a two-stage solid-fuel weapon with a range of 2,000 kilometers and hypersonic capabilities. Riyadh sits just 1,000 kilometers from Houthi launch sites—a distance a ballistic missile covers in minutes. The interception window for a Patriot system is a few dozen seconds, and it shrinks with every kilometer the missile travels. Apparently, Saudi Arabia cannot defend every airport, oil facility, desalination plant, and financial district across 2.25 million square kilometers. The Houthis only need to pick one target. Saudi Arabia must protect them all at the same time and at any time.
Prospects for a political settlement “currently seem remote,” as Chatham House puts it. The reason is simple: the Houthis believe they are winning. And they have good reason to. This is of course not to mention the will of the Iranians to keep destabilizing the region as long as their country remains under the threat of the Saudis close allies, the Americans.
Since the 2022 UN-brokered truce, Saudi Arabia has tried to disengage militarily and negotiate a way out. Instead, the pause allowed the Houthis to consolidate territorial control, strengthen their arsenal, and seize the Red Sea coast. The Houthis learned that limited strikes impose disproportionate economic and political costs—giving them leverage that Saudi conventional superiority cannot overcome.
Thus, Riyadh now faces two negative options. Military escalation risks dragging the kingdom back into the “costly quagmire” it spent years trying to escape. Containment has already proven insufficient. And negotiation requires the Houthis to compromise—which they have no incentive to do while they are projecting wider effect than the past years.
The Mecca Defense Alliance with Pakistan and Turkey may strengthen deterrence, but it does not offer a solution to the Houthi threat or Yemen’s underlying political fragmentation. Saudi Arabia cannot win this war alone, but neither can it outsource its resolution. The only way to quickly win the war is through massive collective land invasion, which the Americans, Turks and the Pakistanis are interested in doing.
If the conflict grinds on for another two years, the damage to Saudi Arabia’s longterm interests will not be limited. The IMF has slashed Saudi Arabia’s 2026 growth forecast to -3.3 percent, a downward revision of 5 percentage points from July.
The kingdom’s Finance Ministry projects GDP will contract by 3.6 percent this year. War spending is widening the deficit and squeezing the resources needed to execute Vision 2030. This is not to mention that the current attacks makes international investors less keen to send their money inside.
Vision 2030 requires over $100 billion in annual foreign direct investment to materialize. But the Houthi attacks strike at the promise on which that investment depends: stability. The strikes have paralyzed Riyadh’s airport, forced global companies into remote work, and caused 85 percent of flights to be cancelled. Oil executives have withdrawn from the World Petroleum Conference. The Future Investment Initiative, Riyadh’s flagship investor gathering, facing potential uncertain attendance and unsuccessful results.
In short, Saudi Arabia is caught in a war it cannot win quickly, it cannot end soon, nor afford to prolong. The Houthis have mastered asymmetric warfare, using cheap drones and missiles to impose costs that far exceed their own expenditure. Every Saudi interception costs millions. Every Houthi launch costs thousands only. Above that, Iran War is much interconnected with the Yemeni War, thus Tehran too does not want to suffer the consequences on its own.
The Kingdom’s only durable exit lies through a negotiated political settlement that addresses Yemen’s fragmentation. But the Houthis must first believe they have more to gain at the table than on the battlefield. Until that calculation changes -and there is no sign it will in the next 12 months at least- the war will continue. The region will continue to face troubles in the next 1-2 years, and “Vision 2030” will apparently suffer as well.
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