Global stock markets fluctuated and oil prices jumped on Friday at the end of a volatile week's trading unleashed by the Middle East conflict.
Stock markets have been rattled by the US-Israel war on Iran and Tehran's retaliatory attacks across the Gulf region, which have upended the world's energy and transport sectors.
Crude prices have soared more than 20 per cent in a week, with traffic having all but dried up in the Strait of Hormuz, through which a fifth of the world's oil supplies and a substantial amount of gas run.
The surge in energy prices has fanned fears of a fresh spike in inflation that could hit the global economy and curb cuts to interest rates.
The International benchmark oil contract, Brent North Sea crude, rose more than two per cent on Friday, while the main US contract WTI topped $80 a barrel for the first time since January last year.
"The longer that key energy infrastructure and shipping routes in the region are affected, the greater the chance of a significant inflationary impact", said AJ Bell investment director Russ Mould.
London, Paris and Frankfurt stock markets all traded lower around midday.
Major Asian markets closed higher after a fresh retreat on Thursday on Wall Street.
The Middle East conflict looks set to be drawn out, with Iranian Foreign Minister Abbas Araghchi on Thursday warning that the Islamic republic was not asking for a ceasefire.
US Interior Secretary Doug Burgum said officials were looking at plans to temper oil price gains, telling Bloomberg his country might tap its own reserves.
With that in mind, the White House on Thursday temporarily eased sanctions against Russia to allow its oil currently stranded at sea to be sold to India until April 3.
International Energy Agency chief Fatih Birol sought on Friday to tamp down fears of a global oil crisis, saying there was "plenty of oil in the market".
Earlier this week US President Donald Trump pledged to protect ships through the Strait of Hormuz, but shipping companies have exercised caution in the region.
Danish shipping giant Maersk said on Friday it was suspending two intercontinental transit routes because of the war, after already suspending bookings in the Gulf.
Other countries have also moved to address the issue, with China asking its largest oil refiners to suspend exports of diesel and gasoline, according to Bloomberg News.
The latest US jobs report will be released later in the day, which investors will look to for fresh signs about the Federal Reserve's interest rate decisions. — AFP
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