Oil prices surged back to $100 per barrel as the ongoing U.S.-Israeli conflict with Iran continued without a clear resolution, causing global stock markets to tumble on Thursday. The S&P 500 dropped 1.5%, while the Dow Jones Industrial Average and Nasdaq composite both saw declines of 1.5% and 1.7%, respectively.

The focal point of market activity was the oil sector, with Brent crude reaching $101.59 per barrel overnight. Concerns persist over potential disruptions in oil production and transportation in the Persian Gulf due to the conflict, which could lead to a significant increase in global inflation.

Iran has intensified its attacks on oil facilities in Gulf Arab countries, disrupting cargo traffic through the vital Strait of Hormuz, a key route for oil shipments. In response, the International Energy Agency (IEA) announced its decision to release a record-breaking 400 million barrels of emergency oil reserves to mitigate the impact on energy markets.

Following a meeting in Paris, the Group of Seven energy ministers discussed strategies to stabilize prices, but the ongoing turmoil fueled speculation of further price hikes, leading to a downward trend in global markets. Analysts from Oxford Economics warned that the lack of de-escalation in the conflict and the closure of the Strait of Hormuz could lead to continued volatility, potentially pushing oil prices up to $140 per barrel.

Since the conflict began on February 28, sharp fluctuations in oil prices have caused significant market volatility globally. The uncertainty surrounding the conflict’s resolution and the reopening of the Strait of Hormuz have raised concerns about the possibility of prolonged disruptions to Middle Eastern oil production and its impact on the global economy.

In European markets, Germany’s DAX and Britain’s FTSE 100 remained stable, while France’s CAC 40 declined by 0.4%. Asian markets also experienced losses, with Japan’s Nikkei 225 falling by 1%, South Korea’s Kospi by 0.5%, and Hong Kong’s Hang Seng by 0.7%. The Shanghai Composite and Australia’s S&P/ASX 200 also recorded declines.

Currency trading saw the U.S. dollar weakening against the Japanese yen, while the euro slightly decreased in value. The ongoing conflict’s impact on energy markets and global economic stability continues to weigh on investor sentiment and market performance.