The Indian Rupee opened 0.50% lower, or 46 paise down, at 92.1975 per US dollar on Monday, March 9, as a sharp rise in global oil prices fueled by the escalating Middle East conflict heightened worries about India’s external balances. The rupee ended at 91.74 on Friday, March 6.
Brent crude prices surged over 25% to about $117 a barrel, continuing last week’s nearly 28% increase that was sparked by the onset of the Iran war.
The approximately 50% rise in oil prices has been fueled by the intensifying US-Israeli conflict with Iran, which has led some major producers in the Middle East to reduce supplies and raised concerns about a sustained disruption of shipments through the Strait of Hormuz.
Rising crude oil prices present a major concern for India, a significant oil importer, as they lead to increased import expenses, potentially widen the current account deficit, and put additional strain on the rupee.
Iran announced on Monday the appointment of Mojtaba Khamenei as the successor to his father, Ali Khamenei, as the supreme leader, indicating that hardliners continue to maintain a strong influence in Tehran amid the ongoing conflict with the United States and Israel, which heightens the chances of a lengthy war.
