Oil Prices Surge to $126 Amid Strait of Hormuz Tensions; Rupee Weakens Against Dollar

Rising US-Iran tensions and Strait of Hormuz blockade pushed crude oil to $126 per barrel, highest since 2022, while the rupee weakened past 95 against the dollar

Washington/Tehran | May 01, 2026: Global oil prices have surged sharply amid escalating tensions between the United States and Iran, with crude touching $126 per barrel, marking its highest level since 2022. The spike comes as the Strait of Hormuz remains effectively choked due to a prolonged naval blockade, raising concerns over global energy supply disruptions.

The situation intensified after US President Donald Trump indicated that the blockade of Iranian ports by the US Navy could continue for several months. His remarks, coupled with a provocative social media post warning that “a storm is coming,” have heightened fears of further escalation in the region.

Iran responded strongly, with its Supreme Leader Mojtaba Khamenei issuing a stern warning, stating that foreign forces entering the Persian Gulf with hostile intent would face severe consequences. The sharp exchange has significantly reduced hopes of any immediate diplomatic resolution.The ongoing standoff has directly impacted global oil markets. In the last 24 hours alone, crude prices have jumped by over 13%, reflecting supply concerns linked to one of the world’s most critical oil transit routes. The Strait of Hormuz handles a substantial portion of global oil shipments, making any disruption a major trigger for price volatility.

The rising oil prices have also had a ripple effect on financial markets. The Indian rupee weakened against the US dollar, breaching the 95 mark for the first time since March. On Thursday, the rupee fell by 19 paise to close at 95.02 against the dollar. Analysts attribute this to higher import costs due to expensive crude and continued outflows by foreign institutional investors from equity markets.The Reserve Bank of India is reportedly monitoring the situation closely and may take measures to manage currency volatility. Meanwhile, uncertainty continues to loom over global markets as geopolitical tensions in the Gulf region show no immediate signs of easing.

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