GULF CURRENTS — Houthis bring the war to Riyadh

By Andrew Mills Oct 14 (Reuters) — The Houthis say they are not finished. On Wednesday, the Iran-backed group promised to keep hitting Saudi airports and oil facilities and told civilians, workers and "international shipping companies" to leave them. The same day, loud booms were heard over Riyadh, and the Saudi-led coalition said it had shot down a ballistic missile aimed at the capital. The threat came a day after a strike on Saudi Aramco's headquarters in Dhahran.

The energy ministry called it a limited fire, but sources told Reuters that the blaze spread across several floors. Aramco staff are now working from home. Pilgrims have been caught up in the attacks too. Footage of Saturday's blast at Riyadh airport showed many travelers in the white cloth ihram clothes worn on the journey to Mecca.

Saudi media reported that a Bangladeshi imam leading a group of pilgrims was among the dead. The Houthis have promised to spare Mecca and Medina. Still, people at the Grand Mosque say the constant phone alerts make them anxious. Can Crown Prince Mohammed bin Salman's plan to remake the economy survive a war on his doorstep?

Our analysis looks at how the kingdom got here, and the tough questions it now faces. Plus: why Saudi Arabia's missile alerts went quiet before the deadliest strike. And in our news briefing: Iran's new campaign against shipping, Yemen's overwhelmed hospitals and "Davos in the desert" going hybrid. News Briefing Iran has shifted tactics to step up attacks on shipping in and beyond the Strait of Hormuz, aiming to keep oil prices high and sway the US midterms, two senior Iranian officials told Reuters.

Attacks have surged to their highest since the war began, deepening risks to global energy supplies. Hospitals across Yemen are overwhelmed by soaring war casualties, and intensified fighting has cut off aid to around 800,000 people, relief agencies said. The renewed Houthi-government war, reignited by the US-Iran confrontation, has left the encircled city of Taiz short of food and medicine, prompting warnings of a humanitarian catastrophe. Saudi Arabia plans to make its flagship Future Investment Initiative conference this month a hybrid event, letting executives attend remotely after deadly attacks on Riyadh airport, sources said.

The shift highlights how the escalating war with the Houthis is challenging the kingdom's push to attract investment and become a global events hub. Analysis: After A Week Of Houthi Strikes, Saudi Arabia Faces Tough Questions Yemen's Iran-aligned Houthis have brought the war to the heart of Saudi Arabia in the past week, repeatedly striking Riyadh's international airport and, on Tuesday night, hitting the headquarters of Saudi Aramco, the world's largest oil and gas company and the backbone of the Saudi economy. Saturday's strike on the airport killed at least 13 people and wounded more than 300, the deadliest attack in the kingdom in more than a decade.

The barrage is testing Crown Prince Mohammed bin Salman's bet that he can overhaul the kingdom's economy while staying out of the region's wars. But the crisis did not come out of nowhere. It grew, in part, from an unfinished war in Yemen, a US security umbrella that keeps failing to open and an economic plan that the crown prince was already redrawing. The crown prince's Vision 2030 made big bets on costly, futuristic giga-projects meant to wean the kingdom's economy off oil.

But by 2025, many of those projects were indefinitely on hold as the kingdom reworked its economic strategy. When the United States and Israel launched their war on Iran in February, Riyadh initially appeared likely to escape the worst of it. Tehran's missiles and drones struck some Saudi targets, but the heaviest damage was in the UAE, Qatar, Bahrain and Kuwait. With the Strait of Hormuz effectively shut, Aramco ran its East-West pipeline at its maximum capacity of 7 million barrels per day (bpd) and shipped exports out through the Red Sea.

The company reported a 25% jump in first-quarter profit, the envy of producers in neighbouring Gulf states. Aramco's oil kept flowing largely because the Houthis, Riyadh's foe on its southern border, did not formally join the war. The kingdom's tankers loaded at Red Sea ports and sailed unimpeded through the Bab el-Mandeb chokepoint to Asia. But a truce between the Houthis and the Saudi-led coalition collapsed in early July.

The group declared a naval blockade of Saudi Arabia, attacked Saudi vessels and the East-West pipeline and, most alarmingly, seized Yemen's Red Sea coastline and the Bab el-Mandeb Strait. The crown prince then called President Donald Trump at least twice, seeking US military support to push back the group. He got intelligence and targeting support, not air strikes, in another reminder that the US security umbrella the kingdom had relied on for decades was no longer a sure bet. Nevertheless, the Saudi-backed Yemeni government launched an offensive against the Houthis earlier this month that has made slow gains, while the Houthis besieged Taiz.

This week's strikes on the airport and Aramco's headquarters followed. The Houthis had declared such sites legitimate targets and, on Wednesday, called the attacks retaliation for Saudi strikes on Yemen. Events are still moving too quickly to tell how, or whether, Riyadh can stay the course. Can oil keep flowing to its Asian customers while the Houthis control the Bab el-Mandeb?

Will investors come when foreign direct investment last year reached only a third of the crown prince's $100 billion target? Can a state that relies on Aramco's dividends pay for a war and an economic overhaul at the same time? And will Trump, who has hinted that Washington "may" join Saudi strikes, finally step in? Chart Of The Week As Mohammed bin Salman tries to build the country's tourism profile and foreign countries issue travel advisories, Muslim pilgrims were still landing and flying out of Riyadh when Houthis struck the capital's airport.

The group has struck several other airports such as Dammam, Abha, Najran and Jazan. These attacks raised worries over civil aviation becoming a target in armed conflict. "This level of sustained intense attack on civil aviation is unprecedented," said Mark Zee, founder of OPSGROUP, a membership-based organization that provides aviation safety advice. "I think this requires us to rethink how we view the current risk picture, and tread very carefully," he said.

Air traffic tracker Flightradar24 showed planes avoiding the city on Monday, though jets were crossing Saudi airspace and landing at top hub Jeddah on the country's west coast. 4%, aviation analytics firm Cirium said. Last Wave: The Warnings That Never Came Saudi Arabia's early warning system went silent even as Houthi attacks mounted. The kingdom's last public alert of an incoming attack went out on September 29, days before strikes on Riyadh's King Khalid International Airport killed at least 13 people and wounded more than 300.

The government has not explained why. But when officials from an allied Western government asked, Saudi authorities said the alerts were too disruptive and that many citizens had complained of being woken by them at night, two officials told Reuters. Even Western embassies, which send staff their own internal alerts, got no warning before Saturday's strike, the deadliest. The silence ended on Monday when civil defense issued new alerts for Riyadh and southern cities.

" (Editing by Alexander Smith )