Dow slides 500 points as oil prices move higher again amid Iran conflict

The Dow Jones Industrial Average fell on Wednesday as investors continued to eye developments in the U.S.-Iran war and oil prices.

The 30-stock index shed 502 points, or 1.1%. The S&P 500 traded down 0.5%, while the Nasdaq Composite dipped 0.3%.

West Texas Intermediate futures climbed 5% to around $87 per barrel. Brent crude also traded 5% higher at $92 per barrel. That’s even after the International Energy Agency said it’s going to release 400 million barrels of oil — the largest-ever release from its reserves — to target the disruption in supply triggered by the war.

The decision made by the IEA “doesn’t solve the other issues that are going to affect the global economy,” according to Ron Albahary, chief investment officer at Laird Norton Wetherby. He cited refined products that flow through the Strait of Hormuz such as jet fuel as one of the problems posed.

“I think the markets are wrestling with that idea of what is the off-ramp at this point,” he said to CNBC. “Both sides have dug their heels in, and it’s hard to see how this comes out positively on the other side in the short term.”

A prolonged conflict could keep oil prices elevated. U.S. forces on Tuesday sunk several Iranian ships, including 16 minelayers, near the Strait of Hormuz as Tehran was seeking to mine the critical shipping route at the center of concerns around oil supplies.