Brent oil held above $107 a barrel after fighting between Yemen-based Houthi militants and Saudi-backed forces intensified, stoking fears of deeper supply disruptions across the Middle East. The global benchmark surged more than 6% in the previous session and is on track for its biggest weekly gain since July. West Texas Intermediate traded near $102 a barrel.

Iran-backed Houthis advanced toward coastal areas bordering the strategic Bab al-Mandeb Strait, gaining ground in their push to seize Mokha near the southern end of the Red Sea. “A resumption of a full-blown Saudi-Houthi war would be a potential catalyst for our high oil price scenario coming to fruition,” RBC Capital Markets LLC analysts including Helima Croft wrote. Mokha’s proximity to the strait “would allow the group to project its disruptive capabilities further south towards the narrowest points of the waterway.”

Fighting has intensified over the past two weeks, with Houthi assaults on Saudi energy facilities forcing some operations to halt and US strikes targeting Iranian oil tankers. A pickup in crude purchases by China has also tightened the global market. The UK Maritime Trade Operations reported two ships struck by unidentified projectiles west of Khasab, Oman, on Sept. 10. Saudi Arabia said oil output fell again last month, reaching the lowest level since 1990. Brent crude is up almost 80% this year, though below its wartime peak of just above $126 a barrel reached in April.

Market participants are revising expectations for the severity and duration of the conflict involving Iran, said Hamad Hussain, commodities economist at Capital Economics Ltd. With global inventories depleted and Chinese demand recovering, renewed disruption could push prices back toward recent peaks. The US is seeking to cripple Iran’s economy, and Treasury Secretary Scott Bessent said a “large bank” will be sanctioned on Monday as part of a campaign including a naval blockade. White House advisers including Vice President JD Vance have told President Donald Trump the war could drag on through the remainder of his term, which runs until January 2029.