War With Iran Sends Oil Back Above $100 and Stocks Sliding

Oil surged back above $100 a barrel as the war involving Iran deepened, sending stocks lower around the world and renewing fears of a broader economic shock.

Brent crude, the global benchmark, rose 9.2% to settle at $100.46 a barrel.

The jump reflected growing concern that fighting could disrupt oil production and shipments from the Persian Gulf for an extended period. If the Strait of Hormuz remains closed, analysts say prices could climb as high as $150.

About a fifth of the world’s oil normally passes through the waterway.

The market turmoil spread quickly to equities. The S&P 500 fell 1.4%, the Dow Jones Industrial Average lost 674 points, or 1.3%, and the Nasdaq composite dropped 1.6%.

Even so, the S&P 500 remained about 4% below its record high from January, underscoring how investors are still weighing whether the shock will be short-lived or more lasting.

Iran’s new supreme leader issued his first public statement since succeeding his late father and said Tehran would continue attacks on Gulf Arab neighbors while using the possible closure of the Strait of Hormuz as leverage against the United States and Israel. Israeli intelligence assessed that he may have been wounded in the opening stage of the war.

Governments have tried to cushion the blow.

The International Energy Agency said its members would release a record 400 million barrels from emergency stockpiles, but that step is widely seen as a temporary measure rather than a solution to the longer-term risk.

Israel also announced a new wave of strikes in Beirut after warning residents in a large part of the city’s southern suburbs to evacuate north.

More than 800,000 people in Lebanon have been displaced in the past 10 days of fighting involving Israel and Hezbollah, part of the wider war.

In Iran, the U.N. refugee agency said up to 3.2 million people have been displaced, most of them fleeing Tehran and other major cities for the north or rural areas.

In Washington, Gen. Alexus Grynkewich told lawmakers that air defense systems had been moved from Europe to the eastern Mediterranean to protect NATO allies. He said, “we do have a robust set of air defenses in the Middle East.”

The general also defended the military’s procedures after lawmakers raised concerns that outdated intelligence may have contributed to a deadly U.S. missile strike on an Iranian school.

Grynkewich said, “We have robust standards that we go through, and look to see and update the imagery, and update our understanding of the target and refresh the intelligence on a recurring basis to determine the chances of civilian harm.”

In Lebanon, an Israeli strike near the country’s only public university killed Hussein Bazzi, director of the faculty of sciences, and professor Mortada Srour. Lebanese President Joseph Aoun condemned the bombing as a crime and a “violation of international laws and norms that prohibit attacks on educational institutions and civilians.”