Indian Rupee Hits Record Low Amid Rising Global Oil Prices and Regional Conflict

The Indian rupee has reached a historic low against the US dollar, crossing the 93-mark due to escalating tensions in West Asia and rising global oil prices. The currency's decline reflects increased selling by foreign institutional investors and concerns over fuel price hikes. As global oil prices soar, with Brent crude reaching $103 per barrel, the situation is compounded by Iran's actions in the Strait of Hormuz, a vital shipping route. The conflict has also led to significant disruptions in liquefied natural gas supplies, raising alarms in India and beyond. This article delves into the factors contributing to the rupee's fall and the broader economic implications.

By Narendra Chaudhary Mar 20, 2026, 12:52 IST

Rupee Declines Significantly

On Friday, the Indian rupee plummeted to an unprecedented low, crossing the 93-mark against the US dollar, largely influenced by ongoing tensions in West Asia.

During early trading, the rupee dipped by 19 paise, reaching an intra-day low of 93.08 against the dollar, as reported by a news agency.

Initially, the currency opened at 92.92 in the interbank foreign exchange market but fell by 49 paise to close at a record low of 92.89 on Wednesday, driven by worries over escalating global fuel prices.

The domestic foreign exchange market was inactive on Thursday due to the Gudi Padwa festival.

Amid the conflict, foreign institutional investors have intensified their selling of Indian equities, further exerting pressure on the rupee.

The rupee's decline is attributed to global funds withdrawing investments from domestic markets.

Since the onset of the conflict in West Asia, global oil prices have surged.

As of 12:10 PM, the benchmark Brent crude oil price reached $103 per barrel, having spiked to $119 the previous day. This is a significant increase from $78 per barrel on February 27, just before the conflict began.

Iran has effectively restricted access to the Strait of Hormuz, a crucial maritime route for international commercial vessels, since the conflict escalated. Approximately 20% of the world's petroleum supply transits through this narrow waterway.

Additionally, global natural gas prices surged by nearly 3.5% on Thursday.

In 2025, India was the second-largest importer of Qatari LNG, following China. The disruptions in supply due to the conflict have raised concerns and panic both in India and globally.

The rise in oil prices has been linked to attacks on Iran’s energy facilities associated with its South Pars gas field, the largest gas reserve globally, which it shares with Qatar. In retaliation, Iran has targeted several oil and gas facilities in Gulf nations, escalating regional tensions.

Qatar has indicated that the attacks on its energy infrastructure could diminish its liquefied natural gas export capacity by 17%. Repairs are expected to take three to five years, with Minister Saad Sherida Al-Kaabi stating that Qatar may need to declare force majeure on some long-term LNG contracts for up to five years.