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Indian rupee opens at 95.31 per US dollar, near record low, as Brent crude jumps after Iran attacks vessels in Strait of Hormuz, raising supply fears and pressuring the currency
By Anshul May 5, 2026, 9:06:38 AM IST (Published)
2 Min Read
The Indian rupee opened at 95.31 against the US dollar on Tuesday (May 5), weakening from Monday’s (May 4's) close of 95.09 and hovering close to its record low of 95.33, as a sharp rise in global crude oil prices intensified pressure on the currency.
Brent crude July futures jumped nearly 6% on Monday (May 4) after Iran escalated military action, targeting multiple vessels in the Strait of Hormuz and triggering a fire at a UAE oil port. The developments have raised concerns over potential supply disruptions in a key global energy corridor.
The escalation comes amid heightened geopolitical tensions involving the United States, with President Donald Trump reiterating that the US Navy would ensure safe passage through the Strait of Hormuz. The situation marks one of the most significant flare-ups since a ceasefire was reached roughly four weeks ago.
Market participants indicated that the renewed tensions could discourage shipping activity through the Strait, keeping crude oil prices elevated. Analysts at ANZ Bank said such dynamics are likely to sustain upward pressure on oil, a key risk factor for the rupee.
Higher crude prices have continued to weigh on India’s external balances, worsening terms of trade and driving sustained demand for the dollar. This has made oil a primary source of pressure on the domestic currency in recent weeks.
Traders noted that the rupee’s trajectory remains closely tied to oil price movements. “The currency is unlikely to see meaningful relief unless crude prices cool significantly,” a currency trader at a private sector bank said.
Bankers also highlighted persistent dollar demand from oil marketing companies, which has added to downward pressure on the rupee. At the same time, exporters have turned cautious on hedging, while other importers have stepped up hedge positions in response to currency volatility.
The pressure on the rupee comes at a time when capital inflows remain limited, reducing buffers that could otherwise help stabilise the currency. Market participants said the absence of strong inflows has left the rupee with few immediate supports amid ongoing external headwinds.
-With Reuters inputs
