Global oil prices climbed to their highest levels since mid-2022, with Brent crude rising above $120 per barrel and briefly touching $123, while West Texas Intermediate (WTI) traded above $108 in early Thursday trade.
The surge follows reports that the United States is preparing for an extended blockade of Iranian exports, alongside stalled nuclear negotiations and rising geopolitical tensions in West Asia.
The sharp rise in crude prices has unsettled global financial markets. GIFT Nifty fell 0.30%, indicating a weak opening for Indian equities, while Asian markets declined and Wall Street ended largely flat.
Higher oil prices are expected to increase input costs for sectors such as aviation, logistics, paints and chemicals.
For India, the rising crude bill is likely to put pressure on the rupee amid a stronger US dollar, with the currency expected to open near 94.90-94.95 per dollar. Sustained high oil prices could push up inflation, widen the current account deficit and constrain policy flexibility for the Reserve Bank of India.
Market participants are closely tracking geopolitical developments, with analysts warning that prices remaining above $120 could prolong volatility across currencies and equity markets.
