European stock markets tumbled again Friday as the U.S.-Israeli offensive against Iran entered its second week, with investors bracing for further economic fallout. The Stoxx Europe 600 index fell 0.8%, extending losses from a volatile week marked by escalating military strikes and surging energy prices. Oil prices climbed to their highest levels since 2023, with U.S. crude closing near $91 per barrel after a $10 surge in a single day.

U.S. officials confirmed Russia has been sharing intelligence with Iran during the conflict, including satellite imagery of military positions. The revelation threatens to further strain already tense U.S.-Russia relations. Meanwhile, Israeli forces launched strikes on more than 400 targets across western Iran, destroying underground bunkers and military infrastructure. The conflict has already claimed hundreds of lives, including at least 175 children killed in an Iranian school bombing.

Energy markets face mounting pressure as the Strait of Hormuz remains partially compromised. While Iran's conventional navy has suffered heavy losses, its Revolutionary Guards' fleet of speedboats and drones still poses threats to shipping. With no diplomatic resolution in sight and President Trump demanding "unconditional surrender" from Iran, analysts warn the conflict could trigger a prolonged economic shock as global markets grapple with sustained energy price volatility.