Oil Holds Gains as Iran Tensions Simmer, Yen Rallies

The Strait of Hormuz is effectively closed again as ship traffic grinds to a halt. The US and Iran are exchanging strikes but neither side has moved to escalate to a full conflict. A US official said nuclear talks may still proceed, though both sides appear reluctant to resume negotiations or escalate further.

Oil prices are tracking higher on the supply risk. WTI crude rose 0.6% to $72.50, on pace to snap four straight weeks of losses with a near 6% gain this week. The closure threatens about 20% of global crude shipments, traders said.

US stocks rebounded this week, led by tech shares. The S&P 500 is up 0.8% and the Nasdaq up 1.4% for the week, recovering some ground after a poor June. Friday morning, futures are more cautious: S&P 500 futures down 0.1% and Nasdaq futures down 0.2%.

The dollar is slightly lower overall. A notable mover is USD/JPY, down 0.5% to 161.60 after Japan finance minister Katayama spoke about fiscal trust and let the BOJ set rates. That follows a broader pattern of Japan’s fiscal policy shift, which Yen Jumps After Katayama's Pension Fund Push Targets Structural Weakness covered.

Traders see the current lull as reducing the chance of a near-term full conflict. Several cautioned the situation remains fluid. The nuclear talks, if they proceed, are the next event that could shift the outlook.