(Updates to US morning trading)

* Oil prices surge; stocks in the red

* Bond yields climb

* 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.

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

Dow Jones Industrial Average fell 1.2%, the S&P 500

dropped 1%, and the Nasdaq Composite lost 1.3%.

The STOXX 600 pan-European equity benchmark slipped

0.6%. 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 8.6% higher at

$94.76 a barrel, and Brent last stood at around $100 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.

IRAN WARNS OF FRESH ATTACKS AS STRIKES ON OIL SHIPMENTS

CONTINUE

Iran will avenge the blood of its martyrs, keep the Strait of

Hormuz closed and attack U.S. bases, new Supreme Leader Mojtaba

Khamenei said on Thursday in a statement read out on state

television, his first remarks since succeeding his slain father.

Earlier, 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."

"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.

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, although U.S.

Energy Secretary Chris Wright said on Thursday global oil prices

are unlikely to hit that price.

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 2.8 basis points to

4.234%, having jumped 7 bps overnight.

The U.S. Federal Reserve will cut interest rates for the first

time this year in June, according to economists polled by

Reuters. Nearly 40% of economists expect just the one rate

reduction or none this year, almost double the share predicting

three or more.

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 0.35% to $1.152. The dollar was

slightly stronger at 159.06 yen.