CHICAGO, March 9, (AP): Oil prices spiked near $120 per barrel before falling back Monday as the Iran war intensified, threatening production and shipping in the Middle East and pummeling financial markets. The price for a barrel of Brent crude, the international standard, surged to $119.50 per barrel early in the day but later was trading at $106.23 per barrel.

West Texas Intermediate, the light, sweet crude oil produced in the United States, spiked at $119.48 per barrel but fell back to $101.25. The war’s toll on civilian targets grew as Bahrain accused Iran of striking a desalination plant vital to drinking water supplies, and oil depots in Tehran smoldered following overnight strikes by Israel.

Oil prices have surged as the war, now in its second week, ensnares countries and places that are critical to the production and movement of oil and gas from the Persian Gulf. Prices moderated after the Financial Times reported that some members of the Group of Seven industrial nations were considering releases of strategic oil reserves to alleviate pressure on the markets.

The unconfirmed report cited unnamed people familiar with the talks. Roughly 15 million barrels of crude oil - about 20% of the world’s oil - typically are shipped every day through the Strait of Hormuz, according to independent research firm Rystad Energy.

The threat of Iranian missile and drone attacks has all but stopped tankers from traveling through the strait, which is bordered in the north by Iran, carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran. Iraq, Kuwait and the UAE have cut their oil production as storage tanks fill due to the reduced ability to export crude. Iran, Israel and the United States also have attacked oil and gas facilities since the war started, exacerbating supply concerns.

The surge in costs for oil and natural gas is pushing fuel prices higher, cascading through other industries and jolting Asian economies that are especially vulnerable due to the region's heavy reliance on imports from the Middle East. The last time Brent and U.S. crude futures traded near the current level was in 2022, after Russia invaded Ukraine.

Higher energy costs push inflation higher, straining household budgets and denting the consumer spending that is a main driver of many big economies. Tokyo's benchmark Nikkei 225 index shed 5.2% on Monday while other markets also foundered. U.S. futures were down more than 1.5%. On Friday, the S&P 500 dropped 1.3% and the Dow plunged as many as 945 points before finishing with a loss of roughly 450. The Nasdaq composite sank 1.6%.