(Updates to U.S. market open)

* Oil prices surge; stocks in the red

* Bond yields climb, market trims bets for Fed cuts

* Euro under pressure versus dollar

By Lawrence Delevingne and Niket Nishant

BOSTON/LONDON March 12 (Reuters) - Global shares fell on

Thursday as attacks on oil tankers in the Gulf and a warning

from Iran shattered prospects of an imminent de-escalation in

the Middle East conflict, briefly pushing oil prices above $100

a barrel and stoking fresh inflation concerns.

The reaction underscores how swiftly bets on an early end to

the war, which gathered pace earlier this week, are being

unwound.

Conflicting messages from U.S. President Donald Trump have

left traders wary of being caught wrong-footed, prompting them

to stick to the sidelines or seek refuge in safe havens.

Wall Street's stock indexes slumped. In early trading, the

Dow Jones Industrial Average fell 1.26%, the S&P 500

dropped 0.82%, and the Nasdaq Composite

lost 0.77%.

The STOXX 600, the pan-European equity benchmark,

slipped 0.5%. The MSCI All-World index fell

nearly 1%.

The International Energy Agency's plan to release 400

million barrels of oil from its reserves, announced on Wednesday

in the largest such move in its history, failed to soothe

investors.

Brent crude futures jumped as much as 10.4% to

$101.59 a barrel, before trimming gains, as doubts persisted

over whether reserve releases would be enough to cushion the hit

from the Middle East supply shock.

U.S. crude futures were last trading 7.6% higher at

$93.87 a barrel, and Brent last stood at around $99 a barrel.

"Even if the reserves are large, how quickly they can be

delivered to markets is untested. Ultimately, a market balanced

via strategic stock releases is going to be far less

logistically efficient," said Joel Hancock, energy analyst at

Natixis CIB.

ATTACKS ON OIL SHIPMENTS CONTINUE

Two fuel tankers in Iraqi waters were struck by

explosive-laden Iranian boats, Iraqi security officials said

early on Thursday, while an Iraqi official told state media that

its oil ports "have completely stopped operations."

Bloomberg News reported that Oman has evacuated all vessels

from its key oil export terminal at Mina Al Fahal as a

precautionary measure.

"The market remains very concerned in terms of what's going

on in the Strait of Hormuz, and basically, information that we

are getting over the last 24 hours is not a good reading," said

Rodrigo Catril, a senior FX strategist at NAB.

"It sort of reemphasizes the view that we should be worried

about this and the risk is oil prices are going to get higher

from here rather than coming down."

Iran had earlier stepped up attacks on merchant ships in the

Strait of Hormuz, increasing the number of ships struck in the

region since fighting began to at least 16. Tehran has warned

the world to get ready for oil at $200 a barrel.

INFLATION RISKS

Data on Wednesday showed the U.S. consumer price index rose

0.3% in February, in line with forecasts and above January's

0.2% increase. The report, however, was not regarded as

particularly relevant given that the Iran war has started to

fuel inflation.

In bond markets, the risk of rising inflation outweighed

safe-haven considerations to push yields higher globally. Yields

on 10-year Treasury notes rose 4.3 basis points to

4.206% on Thursday, having jumped 7 bps overnight.

Fed funds futures extended their slide as investors feared

higher inflation would make it harder for the Federal Reserve to

ease policy. Markets are wagering there will be just one more

rate cut from the Fed this year.

On the other hand, the danger of energy-driven inflation has

led markets to speculate the next move in rates from the

European Central Bank could be up, possibly as early as June.

Nervous investors sought the liquidity of dollars while

shunning currencies from countries that are net energy

importers, including Japan and much of Europe.

The euro slipped 0.3% to $1.153. The dollar was

slightly stronger at 158.96 yen.