With no clear end in sight, the war with Iran is sending oil prices back to $100 US per barrel and stocks sinking worldwide on Thursday.

The S&P 500 fell 0.8 per cent and looks to be returning to big swings following a couple days of relative calm. The Dow Jones Industrial Average was down 583 points, or 1.2 per cent, as of 9:35 a.m. ET, and the Nasdaq composite was 0.8 per cent lower.

The centre of action was again in the oil market, where the price of a barrel of Brent crude, the international standard, got as high as $101.59 US overnight before pulling back to $99.35 US, which is still an eight per cent rise.

Worries remain high that the war could block the production and transport of oil in the Persian Gulf for a long time, which in turn could cause a debilitating surge of inflation for the global economy.

Iran has escalated its attacks aimed at generating enough global economic pain to pressure the United States and Israel to end the war, targeting oil fields and refineries in a handful of Gulf Arab countries. Iran’s actions have effectively stopped cargo traffic through the narrow Strait of Hormuz, through which a fifth of all traded oil passes.

In response, the International Energy Agency agreed Wednesday to release 400 million barrels of oil, the largest volume of emergency oil reserves in its history, in a bid to counter the war’s effects on energy markets. The U.S. planned to release 172 million barrels of oil next week from its Strategic Petroleum Reserve to combat steep prices.

WATCH | The moment a drone struck an oil storage facility in Oman:

Social media video shows drone strike on Oman oil storage facility

A video posted to social media Wednesday shows a drone strike on an oil storage facility at Oman’s Port of Salalah. CBC News verified the footage by matching the facility shown to maps and other pictures of the port, by comparing the explosion to other videos showing the facility burning and by confirming the uniform worn by a worker in the video is from a company that owns one of the ships present in the port on Wednesday.

The IEA’s announcement came a day after energy ministers from the Group of Seven — the leading industrialized countries of Canada, the United States, France, Italy, Japan, Germany and Britain — met in Paris to look at ways to bring down prices.

But the continued strife and uncertainty have fuelled speculation prices could push still higher, and that pulled markets around the globe lower.

In a report, Oxford Economics said “the swings in Brent crude oil prices over the past several days are eye-catching and odds are volatility will remain because of the absence of a timeline for when the conflict will de-escalate and when the Strait of Hormuz, which is effectively closed, will see traffic begin to recover.”

The level of volatility suggests that depending on news developments, oil prices could spike as high as $140 per barrel, Oxford analysts said.

Since the start of the war, sharp moves for oil prices have triggered swings up and down for financial markets worldwide, sometimes by the hour.

Oil prices briefly spiked to their highest levels since 2022 this week because of the possibility that production in the Middle East could be blocked for a long time, which in turn raised worries about a surge of debilitating inflation for the global economy.

In Europe at midday, Germany’s DAX and Britain’s FTSE 100 were both relatively unchanged, while the CAC 40 in Paris lost 0.4 per cent.

During Asian trading, Tokyo’s Nikkei 225 fell one per cent to 54,452.96. In South Korea, the Kospi lost 0.5 per cent to 5,583.25, while Hong Kong’s Hang Seng gave up 0.7 per cent to 25,716.76.

The Shanghai Composite index shed 0.1 per cent to 4,129.10 and in Australia, the S&P/ASX 200 dropped 1.3 per cent to 8,629.00.

In currency trading early Thursday, the U.S. dollar fell to 158.62 Japanese yen from 158.95 yen. The euro inched down to $1.1563 from $1.1566.