Some respite earlier in the week when US president Donald Trump signalled the war would end “every soon” was short-lived.
Oil prices had retreated on the back of his comments and a move by the International Energy Agency member states to release emergency reserves. But prices powered ahead again on Friday, with Brent crude at almost $102 a barrel.
Oil prices remain more than a third higher than when the United States and Israel launched strikes on Iran two weeks ago.
Gold was 0.6pc lower at $5,047 per ounce on Friday, set for a drop on the week.
“Headlines are coming at the market like water from a fire hose, which is impacting the price of oil, and consequently, financial markets,” said Mitch Reznick, group head of fixed income at Federated Hermes.
Mr Trump said the US was going to be hitting Iran “very hard over the next week”, shortly after issuing a partial 30-day waiver for purchases of sanctioned Russian oil, hoping to ease prices fuelled by the US-Israeli military action.
Stocks were mixed on Friday. Ireland’s Iseq-20 is now 5.5pc lower than it was just before the war began. It’s down 4.9pc in the year to date.
European indices were all down. France’s Cac-40 was among the biggest fallers, ending the day almost 1pc lower.
The Ftse-100 shed just over 0.4pc, while Germany’s Dax ended the session 0.7pc lower.
The Stoxx-600 retreated 0.6pc, and Italy’s Ftse-MIB was down 0.3pc.
By lunchtime in New York, the Nasdaq had fallen 0.6pc, while the Dow Jones Industrial Average was flat.
“It could simply be the case we’ve had two if not three days of pretty aggressive selling across the board, and there’s simply a degree of exhaustion coming in,” said Michael Brown, senior research strategist at Pepperstone.
The dollar has become the safe-haven of choice during the tumult, putting most other currencies under pressure. The US currency was set for a second consecutive week of gains, up 0.5pc on the day against a basket of other currencies.
With Iran stepping up attacks across the Middle East as its new supreme leader Mojtaba Khamenei vowed to keep the Strait of Hormuz shipping lane closed, investors are bracing for a prolonged conflict and higher oil prices.
The spectre of rising inflation has ?led markets to rapidly reprice what they expect from central banks this year.
Investor focus will switch to a slate of policy meetings next week with the Fed, the Bank of Japan, the European Central Bank and the Bank of England all due to meet – most are expected to keep rates unchanged.
Irish stocks on the move on Friday included Ryanair, which fell 0.9pc and Kingspan, which declined 2.2pc.
Shares in homebuilder Glenveagh fell 3.3pc, even as the company’s 2025 figures reflected those published in a January trading statement and it said it has a €1.3bn order book. That order book is 15pc higher than a year ago.
Additional reporting: Reuters
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