Iran and its allies are gaining ground against the US in the Middle East, which is bad news for oil markets, Israel, and Washington's hope of keeping things quiet before the midterms.

• The Houthis took the port city of Mocha from Saudi-backed forces, giving them control over a second key shipping chokepoint.
• With the Strait of Hormuz still mostly shut, the workaround route through the Red Sea is now closing too.
• Oil has jumped about $20 in the last couple of weeks to over $100 a barrel.
• Iran has fired on US ships as a warning rather than to sink them, and has held back its strongest cards, like hitting Gulf oil and gas fields.
• The idea that the US is winning this is wrong: Iran still has plenty of escalation options left, and fighting in the Red Sea and the Persian Gulf at once is hard.

Outlook: Iran may trigger a bigger round of fighting a week or two before the midterms, expecting Trump to launch an all-out war with Israel alongside him afterward.