The price of oil rose above $105 a barrel on Thursday, the highest level in months, as fighting escalated between Saudi Arabia and Yemen, further threatening oil shipping in a critical passage in the Middle East. The turmoil, which started when United States and Israeli attacked Iran on Feb. 28, has spread around the region, and President Trump on Wednesday night said that it would continue through the November midterm elections in the United States. Oil prices have jumped 41 percent since the war began. The rise in energy prices threatens to stoke inflation more broadly, squeezing consumers and businesses.

Investors are waiting for a crucial report on U.S. inflation, set for release on Friday, that could shape expectations for the Federal Reserve’s decision on interest rates at its meeting next week. Traders believe that a Fed rate increase is more likely than not, according to futures markets. Yemeni officials said Thursday that the Iranian-backed Houthi militia had captured a port city, giving it greater control over passage through the Bab al-Mandab Strait at the southern end of the Red Sea.

Saudi Arabia had been using this route to export its oil and bypass the Strait of Hormuz, the narrow waterway between the Persian Gulf and the Gulf of Oman. Oil exports from Saudi Arabia fell last month to their lowest levels in at least 13 years, according to data from Kpler. With Iran targeting tankers in the Persian Gulf and the Houthis targeting Saudi tankers in the Red Sea, Saudi Arabia is now exporting more oil north through the Red Sea via the Suez Canal. "The threat is real, and that’s why they keep shying away," Peter Sand, a shipping analyst at Xeneta, said of shipowners operating in the southern Red Sea near Yemen.