Stocks slide, oil surges past $100 as Iran hits Gulf shipping

Asian shares dropped sharply on Thursday after oil prices spiked 9% above $100 a barrel, fueled by reports of Iranian attacks on ships in Gulf waters and oil terminal shutdowns that threaten to accelerate global inflation and borrowing costs.

The International Energy Agency (IEA) announced its largest-ever release of 400 million barrels from strategic reserves, including 172 million from the U.S. starting next week, but investors remained uneasy.

Brent crude futures climbed 9.2% to $100.37 a barrel, building on a 4% overnight gain, while U.S. crude rose 8.1% to $94.26.

MSCI's Asia-Pacific index outside Japan fell 1.5%, Japan's Nikkei dropped 1.4%, China's blue-chips lost 0.6%, and Hong Kong's Hang Seng slid 1.2%. U.S. S&P 500 and Nasdaq futures each fell 0.9%, with European futures like EUROSTOXX 50 down 0.8% and DAX off 1%.

Iraqi officials reported two fuel tankers struck by explosive-laden Iranian boats in Iraqi waters, forcing a complete halt to oil port operations. Oman evacuated vessels from its Mina Al Fahal export terminal as a precaution.

Since fighting began, at least 16 ships have been struck in the Strait of Hormuz, where Iran has intensified merchant attacks and warned of $200 oil.

Rodrigo Catril, senior FX strategist at NAB, said: "The market remains very concerned... the risk is oil prices are going to get higher from here rather than coming down."

U.S. President Donald Trump declared Wednesday that the war on Iran is won but pledged to "finish the job."

U.S. February CPI rose 0.3% as expected, but the Iran conflict overshadows inflation data. Bond yields climbed, with 10-year Treasuries up 3 basis points to 4.2374% after a 7 bps overnight jump.

Fed funds futures priced in just one rate cut this year amid inflation fears, while markets bet on a possible ECB hike by June.

The dollar gained as a safe haven; the euro fell 0.2% to $1.1539, its weakest since last November. The dollar rose 0.1% to 159.12 yen, a January peak. Australia's dollar dropped 0.4% to $0.7122 after hitting a three-year high.