Oil exportation is a critical pillar of Yemen's economy, constituting 75% of the government's budget.
Months of Houthi attacks in the Red Sea have disrupted global shipping, forcing firms to re-route to longer and more expensive journeys around Southern Africa.
The United States and Britain carried out the strikes against Houthi targets in response to the attacks on shipping.
The comment is in line with US Secretary of State Antony Blinken's statements in November that the US would re-evaluate the designation if the Houthis ceased attacks in the Red Sea and Gulf of Aden.
The decision comes two years after a prior unheeded attempt to ban the antisemitic Iran-backed Shi’i movement, whose infamous slogan calls, among other things, for 'a curse upon the Jews.'
The Houthis have vowed to continue their attacks in the Red Sea as long as Israel continues to commit "crimes against Palestinians."
After a three-day hiatus, the Yemen-based, Iran-backed Houthi terrorist group has commenced attacks on the Red Sea targeting ships.
As Yemen's economic conditions deteriorate, the Houthis stand accused of diverting public attention by focusing on Israeli-Palestinian hostilities
Since the outbreak of the Israel-Hamas war, the Iranian-backed group has terrorized shipping networks, leading the US State Department to take a firmer stance.
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