Houthis declare Saudi talks a dead end, warn of full escalation

Yemen's Houthi movement says Saudi Arabia is trying to impose its own terms on Yemen and that all mediation has failed, signalling a wider conflict ahead.

Yemen's Houthi movement says negotiations with Saudi Arabia have reached a dead end. It says Riyadh is trying to impose its demands on the Yemeni people, which Sana'a will not accept, and that it is preparing for what it calls an all-round escalation of the conflict.

The statement follows weeks of rising attacks. A Houthi military source warned airlines away from Saudi airspace on Monday, after a month of strikes on Saudi airports and oil infrastructure. An explosion was reported in Riyadh that same day, which Saudi authorities had not explained. Flights were suspended at King Abdulaziz International Airport in Jeddah on Sunday after several explosions were reported there, and Saudi forces intercepted two more ballistic missiles as part of a campaign that has reached Riyadh, Jeddah and the border provinces since September.

Oil has moved with the pattern of strikes rather than against it. Brent crude climbed to $110 a barrel on Sunday as attacks on the Bab el-Mandeb strait continued, and the oil fund USO was down 0.18% at $161.47 a share on Monday after a Houthi claim of fresh strikes on Saudi infrastructure. The UK has begun flying defensive missions and France has deployed military resources, while the Saudi government says it has no intention of backing down.

Mediation efforts floated by Iran, Oman, Russia and China have so far gone unanswered. Declaring the talks dead formalises what the strikes on Riyadh, Jeddah and Aramco's Dhahran headquarters had already signalled, and raises the odds of a broader, harder to contain conflict rather than a contained cycle of claims and intercepts. Crude oil remains the asset most exposed if any confirmed strike reaches export or loading infrastructure, since Saudi output has held steady through the attacks so far. For US equities, the exposure for now runs mainly through energy costs rather than direct contagion.