On October 17th, 2024, the United States Department of Treasury’s Office of Foreign Assets Control (OFAC) announced the identification and designation of 18 individuals and entities associated with Iran-based Houthi financier Sa’id Ahmad Muhammad al-Jamal (al-Jamal). Al-Jamal and his network are responsible for generating tens of millions of U.S. dollars in revenue in support of Iranian-backed militia groups, including financing the Houthi’s recent coordinated attacks and maritime operations targeting commercial and military vessels in the Bab al-Mandeb Strait, Red Sea, and Gulf of Aden.
Analyst Comment: OFAC defines “identification” as recognizing individuals and entities suspected of participating in activities that may warrant sanctions. “Designation” involves the placement of an individual or entity on the Specially Designated Nationals (SDN) List – or Sanctions list. This formal action blocks access to assets and property and prohibits U.S. persons or businesses from engaging with such persons or entities.
Al-Jamal’s illicit finance activities are enabled by a sprawling network of ship management firms, shell companies, international clients, and maritime vessels. Al-Jamal’s network facilitates the movement and sale of U.S.-sanctioned Iranian commodities, illicit oil, and other petroleum products, providing a steady stream of financial and material support to regional destabilization operations and terrorist activities. The 18 targeted entities and individuals associated with al-Jamal’s illicit finance network include five foreign trading and shipping companies, eight maritime vessels, and five foreign nationals.
In addition to his efforts to financially support Houthi terrorist activities, al-Jamal is suspected of maintaining close affiliations with leaders of the Islamic Revolutionary Guard Corp Quds Force (IRGC-QF) and was placed on OFAC’s SDN List as a Specially Designated Global Terrorist in June of 2021.
Analysis: OFAC’s special designation of the 18 individuals and entities associated with Sa’id al-Jamal’s network is significant. Illicit finance through the sale of oil and petroleum-based products continues to be a pivotal source of revenue for the financial and material support of Houthi terrorist activities and Iran’s regional strategic ambitions – including those aimed at crippling international commerce and disrupting the global supply chain of western-allied countries who diplomatically, economically, and militarily support Israel.
Al-Jamal’s illicit finance activities have enabled Houthi disruption operations in the Red Sea and Gulf of Aden, funding tactical training, as well as the deployment of specialized equipment such as anti-ship missiles, weaponized drones, naval mines, and speedboats.
The newly implemented sanctions will block a critical stream of illicit revenue, potentially impacting the frequency and intensity of Houthi disruption efforts in the Red Sea and Gulf of Aden by degrading their operational supply chain.
Sanctions add a layer of complexity to Iranian and pro-Iranian defense fiscal planning. Persistent U.S. counter-threat finance initiatives aimed at Iran likely impact, in part, the allocation of funding to Iranian-backed militia groups in the region. Iran will likely prioritize available financial resources for the restoration of Iran’s defense infrastructure and defense industry because of the devastating Israeli retaliatory airstrikes conducted on October 26th, 2024. With increased financial pressure, the availability of funds for Iranian-backed militia groups like the Houthis could reasonably be temporarily constrained.
Analyst Comment: Houthi maritime operations and targeting activities have severely impacted regional security and global trade since mid-October 2023. Over the past 12 months, the number of Houthi-led attacks on international commercial vessels transiting the Middle East is estimated to have exceeded 130 events, with oil tankers and container traffic in the Red Sea decreasing by 80% as of early 2024. By June, shipping prices for most goods had increased by an estimated 233%. Commercial vessels bypassing the Red Sea and the Gulf of Aden were frequently rerouted around South Africa’s Cape of Good Hope, adding 10 days of travel time and an estimated $1 million USD in fuel costs.
