The humanitarian crisis in the besieged Yemeni city of Taiz is becoming unmanageable as the city runs out of water, fuel and fresh food, Oxfam aid workers in the country have warned.

Iran-allied Houthi forces have largely encircled the city of more than 900,000 people, cutting it off from most supply routes. This week, heavy fighting has raged around the city’s old airport, causing extensive damage in a densely populated residential area.

The conflict has intensified since forces loyal to the internationally recognised government and the Saudi-led coalition launched airstrikes on the Houthi-held airport in Sana’a in July, shattering a 2022 ceasefire deal that had largely stopped the fighting.

The UN has called for aid workers to be given access to Taiz. Oxfam in London called for the UK to send extra humanitarian aid to the country. The UK has allocated just £104m in aid to Yemen for each of the next three years, down from the £196m allocated in 2020. US aid to the stricken country has been virtually wiped out, and Germany, another leading funder, has halved its aid programme.

Donor countries have subscribed to only 23% of the cost of the UN humanitarian relief programme for Yemen this year, and pressure is growing on Saudi Arabia – itself cash-strapped by the cost of war – to make up the shortfall. The World Food Programme said wheat flour reserves in the city were nearly exhausted as of mid-October.

On Tuesday the UK government allocated an unspecified sum in extra military help to Saudi Arabia to help protect its airports and infrastructure, but London has yet to decide on whether to back a much more robust military response, including supporting the possible deployment of foreign ground troops to Yemen.

Fatma Jaffar, a Yemen-based advocacy manager for Oxfam, said local staff described an almost total siege of Taiz.

“All the main entrances [to the city] have been blocked. The clashes are continuing and the casualties are very high,” she said. “Even people that have money are not able to buy food. Supplies are becoming very limited in the markets. No fuel has entered Taiz for two or three weeks. Drinking water is a massive issue. Even our staff are struggling to buy water.

“Hospitals are struggling without medicines and a lot of people as a result are dying. Those that have been wounded by missiles – there have been attempts to get them out of the city, but because of the blockade they are not able to transfer anyone. Prices have rocketed.

“Our staff told me that people are even searching for apples right now and they cannot find any fresh fruit, and basic commodities are not found inside the city. Garbage is piling up since they are not able to transfer the waste outside the city. They are trying to burn it, but we can only anticipate there will be diseases such as cholera in the near future. If this goes on much longer and access remains blocked, there will be casualties from missiles, hunger and disease from lack of water right across the city.

“The situation was bad before the escalation – Yemen is one of the poorest countries on Earth – and now it is becoming unmanageable.”

Prices have rocketed: a 20-litre container of petrol that cost about $20 (£15) before the crisis is now worth $80 on the hidden market. Potato prices have doubled.

The Houthi focus on Taiz reflects the city’s strategic importance, but the level of resistance inside the city may swallow the group’s resources, weakening its response elsewhere.

Oxfam has been forced to transfer its limited resources from development to emergency humanitarian work, including offering cash transfers.

The Halo Trust, the world’s largest humanitarian landmine-clearance organisation, said 30 of its staff were among hundreds of thousands of civilians trapped inside the city.

In the Trump administration’s fiscal year 2027 budget request to Congress, the US state department has requested no economic support or development assistance specifically for Yemen. By comparison, the US committed roughly $760m in total aid to Yemen during the last year of Joe Biden’s presidency.

UN diplomats are still mediating between the two sides, but there is no sign that either the Houthis or the internationally recognised government are ready for a ceasefire, let alone a long-term settlement.