Crude Oil Tops $113 as Hormuz Tensions Rise; Rupee Hits Fresh Low

Global crude oil prices surged above $113 per barrel in early trade on Tuesday as investors assessed the impact of renewed tensions in the Strait of Hormuz, a key global oil transit route.

Brent crude futures rose to over $114 per barrel in early Asian hours before easing slightly to around $113.77, while US benchmark West Texas Intermediate (WTI) was trading near $104.44, after touching $107 in the previous session.

The sharp move follows a highly volatile session on Monday, when Brent prices briefly crossed $115 per barrel, compared to opening levels near $106, as geopolitical risks intensified in West Asia.

Geopolitical Tensions Drive Oil Spike

Market sentiment remains fragile as the ceasefire between the United States and Iran shows signs of strain. Fresh missile and drone attacks in the past 24 hours have heightened fears of supply disruption through the Strait of Hormuz, through which nearly a fifth of global oil supply passes.

Reports indicated that the United Arab Emirates intercepted multiple missiles and drones launched from Iran, resulting in injuries and further escalating tensions.

US President Donald Trump said in a social media post that Iran had targeted vessels in the region, while the US continues efforts to secure safe passage for ships under "Project Freedom."

The developments have reintroduced a significant risk premium in oil markets, with traders factoring in potential disruptions to global supply chains.

Rupee Under Pressure, Dollar Gains

Rising crude prices added pressure on the Indian currency, with the rupee opening weaker at 95.33 against the US dollar and extending its decline for the fifth consecutive session to hit a fresh record low.

Higher oil prices typically increase India's import bill, leading to greater dollar demand from oil companies and foreign investors, which weighs on the rupee.

The US dollar remained firm amid safe-haven demand, with the dollar index hovering around 98.48 after recent gains.

Amid heightened geopolitical uncertainty, gold prices edged higher, with COMEX gold trading at $4,546.80 per ounce, up 0.3%. Silver, however, saw a marginal decline to $73.30 per ounce.