Iran Update: Houthi Blockade and Escalating US-Iran Conflict

 Iran Update Special Report, July 20, 2026

Analyst Notes The Institute for the Study of War (ISW) and The Critical Threats Project (CTP) at the American Enterprise Institute are publishing daily updates on the war with Iran. These updates cover events from the past 24-hour period, with the data cutoff for this report being 2:00 PM ET on July 20, 2026.

Key Takeaways

1. The Houthis’ announced naval blockade against Saudi Arabia could result in an expansion of the shipping crisis in the Middle East, as it will almost certainly increase the cost of shipping through the Red Sea.
2. Iran is trying to expand the geographical scope of its conflict with the United States to the Red Sea to cause further disruption to international markets.
3. The Houthis may have announced the blockade to deter Saudi Arabia from striking Houthi targets in Yemen.
4. Some senior Iranian officials appear concerned that the renewed conflict will deepen Iran’s economic problems and threaten internal security.
5. US forces expanded strikes to possible missile launch sites in northwestern and central Iran.
6. Iran continues to coerce vessels by force to transit through Iranian territorial waters.
7. The IRGC released a statement thanking the Jordanian people for information aiding recent attacks, possibly to counter reports of Russian and Chinese assistance.

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Toplines The Houthis’ naval blockade against Saudi Arabia could expand the regional shipping crisis. While ISW-CTP has not recorded Houthi attacks on shipping since July 7, 2025, the Houthis ordered Saudi-bound vessels to turn back via radio on July 20. This announcement will likely increase shipping and insurance costs through the Red Sea.

Iran is pushing to expand the conflict to the Red Sea to impose costs on the United States. Iranian sources indicate Tehran asked the Houthis to prepare attacks on shipping if the US expands strikes on Iranian energy infrastructure. IRGC Quds Force Commander Brigadier General Esmail Ghaani has previously threatened a renewed Houthi campaign in the Bab al Mandeb Strait, a route Saudi Arabia increasingly relies on for oil exports to Asia.

The blockade may be intended to deter Saudi strikes in Yemen. Though Houthi spokesperson Yahya Sarea claimed the blockade responds to a 12-year "unjust siege," this is likely false. The announcement follows a July 13 Saudi strike on Sanaa International Airport, which was conducted due to concerns regarding Iranian weapon transfers. Despite these tensions, a UN-negotiated ceasefire has remained relatively stable since 2022.

Internal Iranian dissent is growing regarding the economic costs of the war. President Masoud Pezeshkian warned on July 20 that economic pressure could generate social discontent and damage the regime's public support. He emphasized that the economy is now Iran’s “main battlefield”. These concerns follow the disintegration of the US-Iran memorandum of understanding (MoU), which Iran expected would provide sanctions relief and access to frozen assets. Judiciary Chief Gholam Hossein Mohseni Ejei similarly urged officials to prevent economic hardship from undermining national unity. Both officials previously aligned with a faction favoring moderation after the June 2025 Israel-Iran war.

US-Iran Negotiations Nothing significant to report.

Maritime Activity in the Strait of Hormuz and Persian Gulf Iran continues to force vessels into its territorial waters to prevent the use of unauthorized routes. Since the last data cutoff, Iran has attacked at least two vessels. On July 19, projectiles struck Malta-flagged and Liberian-flagged tankers using a US-facilitated route, forcing the Malta-flagged vessel's crew to abandon ship north of Kumzar, Oman. Another attack almost certainly occurred on July 20 near Dibba, UAE. The IRGC described these as "explosions" to obfuscate responsibility while labeling the transit routes "dangerous".

US-Israeli Air Campaign and Iranian Response US forces expanded strikes to possible missile launch sites in northwestern and central Iran. On July 19, strikes targeted an unspecified site in Urmia and military areas in Tabriz, marking the first strikes on Tabriz in this phase of the war. Targets in Tabriz included the IRGC Amand Missile Base, Southwest Tabriz Missile Base, and the Ghazi Tabatabaei Training Base. Additionally, the Khojir Military Complex in Tehran Province was struck for the first time in this phase; it is a key facility for missile manufacturing.

In response, Iran conducted drone and missile strikes on US regional bases. Kuwait and Bahrain reported intercepting Iranian attacks, with Bahrain specifically noting a drone attack targeting its civil navigation systems.

The IRGC claimed on July 19 that Jordanian citizens provided information on US military equipment at Aqaba airport and personnel shelters at Muwaffaq al Salti Air Base. Iran launched four missiles at Aqaba airport and struck buildings at the air base, killing at least two US service members. These statements may be intended to mobilize Arab populations against the US or to hide military support from Russia and China.

Iranian Domestic Affairs Unidentified individuals killed Sunni cleric Molavi Mohammad Anvar Rigi in Mirjaveh, Sistan and Baluchistan Province, on July 20. Rigi, who survived a 2024 assassination attempt, had been appointed by the Supreme Leader's representative after his predecessor's arrest. The province remains a hotspot for Baloch separatist activity against Iranian security forces.

Iran’s Axis of Resistance

• Lebanese Hezbollah: The IDF and Lebanese Armed Forces (LAF) are preparing for an Israeli withdrawal from “pilot zones,” starting with Zawtar el Gharbiyeh on July 21. This follows the June 26 Trilateral Framework Agreement. Lebanese President Joseph Aoun met with US Secretary of State Marco Rubio and is expected to meet with President Donald Trump to discuss the agreement's implementation.
• Iraqi Militias: Iraqi Prime Minister Ali al Zaydi plans to visit Tehran to request that Iranian-backed militias surrender Iranian-provided missiles to the federal government. However, the IRGC has reportedly instructed militia leaders to resist disarmament. Zaydi’s request follows a visit to Washington where he signed agreements to reduce Iranian influence in exchange for US investment. Meanwhile, the Islamic Resistance in Iraq threatened to target US bases if the strike campaign against Iran expands.

Gulf Activity Nothing significant to report.