Oil Edges Higher as US Threatens Iran Naval Blockade

Oil prices edged higher during the Asian session on Friday after the United States threatened an indefinite naval blockade of Iran, reviving supply concerns a day after crude fell on a weaker demand outlook and a large build in US inventories. Treasury Secretary Scott Bessent told Newsmax the administration would soon unveil what he described as economic measures that would combine historic isolation with the continued blockade of the Strait of Hormuz. ADNOC confirmed two of its vessels were struck while transiting the strait, adding to a mounting toll on shipping through the waterway since the war began.

Gold moved in the opposite direction, slipping to under $4,320 an ounce at one stage during the session.

Chicago Fed President Austan Goolsbee offered a more optimistic read than his colleagues Beth Hammack and Tom Barkin earlier in the day. Speaking on Fox News, he said recent inflation data has been a little better and that he is hopeful the trend continues. Goolsbee attributed much of the current inflation to tariffs and higher oil prices tied to the Iran war, both of which he had hoped would prove one-off increases. Working through those pressures could put the economy back on what he called a golden path toward the Fed's 2% target.

The US dollar saw a brief pop after Latvia issued an air threat alert and Finland imposed a temporary restriction on aviation and maritime traffic in the eastern Gulf of Finland within minutes of each other. Speculation centred on whether the incidents involved drones tied to Russia's war in Ukraine that had drifted off course, or represented a further example of Russian harassment of NATO's eastern neighbours. The dollar ultimately gave back that gain and finished the session lower.

In FX, Mitsuhiro Furusawa, Japan's former top currency diplomat, told Reuters the yen remains clearly too weak at current levels and is hurting the economy through higher import costs. He added that Japan and the US could conduct joint intervention again at any time rather than at a fixed level. USD/JPY dribbled back under 159.40 during the session. The comments come as the Bank of Japan remains on track for a September rate hike, according to recent data on producer prices Japan PPI Keeps BOJ on Track for September Hike.

Elsewhere, Reddit shares jumped more than 8.5% in after-hours trade after S&P Dow Jones Indices confirmed the platform will join the S&P 500 before markets open on August 18.

In Australia, Prime Minister Anthony Albanese spoke with President Trump, with Trump agreeing to consider reversing the 12.5% tariff currently applied to Australian exports.