Stock futures slid and oil prices surged above $100 a barrel on Thursday as Iran continued its assaults on U.S. Gulf allies and tankers in the Persian Gulf, with a massive release of oil supplies by the International Energy Agency doing little to calm jittery investors.
“Iran’s strategy of sowing economic chaos in the Gulf is working as tankers come under attack and Hormuz stays shuttered, pushing Brent up toward $100,” Adam Crisafulli, head of Vital Knowledge, said in a research note on Thursday.
The International Energy Agency (IEA), which includes 32 member countries, announced Wednesday that it would release 400 million barrels to shore up global supply, the largest release in the organization’s history.
“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the IEA said in a statement Thursday.
President Trump also committed to releasing 172 million barrels of oil from the U.S. Strategic Petroleum Reserve on Wednesday.
However, unrelenting attacks on shipping traffic and energy infrastructure in the Persian Gulf stoked investor fears, pushing Brent crude over $100 a barrel early Thursday.
As of 8:30 a.m. EDT, Brent crude, the international benchmark, rose 7.2% to $98.63, while West Texas Intermediate jumped 7.1% to $93.45 a barrel, according to FactSet.
Markets appeared to shrug off the emergency release of oil supplies, with no end in sight to the conflict in the Middle East. S&P 500 futures sank 0.7% before the opening bell, while Dow Jones Industrial Average futures declined 0.9%.
Oil analysts emphasize that energy markets will continue to be volatile until there is meaningful progress on ensuring ships can sail safely through the Strait of Hormuzthe vital waterway that connects the Persian Gulf to the global market.
Gas prices, which are influenced by the cost of oil, taxes and other seasonal factors, also swung higher on Thursday, hitting $3.60 a gallon, according to AAA. The cost of oil accounts for roughly 50% of the price of gas, according to industry figures.