The currency has come under strain amid rising geopolitical tensions that have disrupted energy markets, particularly around the Strait of Hormuz, a key transit route for crude supplies.

Higher oil import costs typically weigh on the rupee by widening India’s trade deficit and increasing dollar outflows.

Dealers said sustained demand for the U.S. dollar from importers, especially oil companies, has kept the rupee under pressure. Concerns over global inflation and tighter financial conditions have also supported the dollar, limiting gains in emerging market currencies.

Market participants pointed to uncertainty stemming from escalating conflict in the Middle East as a key driver behind risk aversion, prompting investors to shift toward safe-haven assets.

Traders said the Reserve Bank of India was likely present in the foreign exchange market to smooth volatility, helping the rupee avoid sharper losses. The central bank typically intervenes to curb excessive fluctuations rather than defend specific levels.

Analysts expect the rupee to remain sensitive to oil price movements and global risk sentiment in the near term, with any further escalation in geopolitical tensions likely to add to downward pressure.

Futures for the GIFT Nifty were trading at 23,257 at 08:11 a.m. IST, indicating that the Nifty 50 would open above Friday’s close of 23,151.10 after posting its steepest weekly drop in years and entering a technical correction.

Supply route developments lift sentimentMarket sentiment improved after the Wall Street Journal reported that the United States was preparing to announce a coalition of countries to escort commercial vessels through the Strait of Hormuz, a maritime corridor that handles about one-fifth of global oil supply.

Additional support came after two India-flagged liquefied petroleum gas carriers Shivalik and Nanda Devi transporting roughly 92,712 metric tons of LPG successfully crossed the strait last week en route to India, easing immediate concerns about fuel supply disruptions.

India’s foreign minister Subrahmanyam Jaishankar said in an interview with the Financial Times published Sunday that he had been in discussions with Iran and that dialogue had produced some results.

However, investors remain cautious as the conflict in the Middle East continues to threaten energy flows and financial markets.

Oil and currency pressures persist as rude oil prices have stayed above $100 per barrel during the conflict, raising concerns about inflation and economic growth in India

.The surge in energy costs has also pushed the Indian Rupee to record lows against the U.S. dollar, highlighting the vulnerability of the country’s energy-dependent economy.

Traffic through the Strait of Hormuz has been heavily curtailed since the United States and Israel launched a bombing campaign on Iran at the end of February, prompting Tehran to largely halt commercial shipping through the critical waterway.

Mumbai, March 10 – India ordered tighter controls on natural gas and cooking gas supplies on Tuesday after import disruptions linked to the Middle East war affected shipments through the Strait of Hormuz, prompting warnings from restaurant groups that the curbs could force widespread closures.

The Ministry of Petroleum said the ongoing conflict in the Middle East had disrupted liquefied natural gas (LNG) shipments passing through the Strait of Hormuz, a key energy corridor for global trade. The government said the restrictions were aimed at ensuring equitable distribution of gas supplies and maintaining availability for priority sectors.

India, the world’s most populous country, is the fourth-largest buyer of LNG and the second-largest importer of liquefied petroleum gas (LPG), widely used as cooking fuel in households and commercial kitchens. Much of the country’s LNG and LPG imports originate from Middle Eastern producers.

Under the new directive, LNG supplies will be prioritised for households, the transport sector and LPG production. Other industries including fertiliser plants and tea producers will receive between 70% and 80% of their consumption requirements, subject to operational availability.

To offset the supply shortfall, the government said gas allocations to petrochemical facilities and power plants would be partially or fully curtailed.

Several Indian industries have already reported supply reductions. Ceramics and tile manufacturers said gas curbs could affect production as energy costs and availability tighten.

Restaurant and hospitality groups said a separate order issued on Monday prioritising LPG for domestic households had already begun affecting commercial users.

The National Restaurant Association of India said LPG suppliers across the country had signalled that deliveries to eateries could be halted following the order.

“The restaurant industry is predominantly dependent on commercial LPG for its operations,” the association said in a statement, adding that supply disruptions could trigger widespread closures.

PC Rao, head of a hotel industry association in Bengaluru, said the situation had become critical as stocks ran low across smaller establishments.

“Supply of gas has been hit and many of the smaller establishments only have one to two days of stock left,” Rao told AFP.

Larger restaurants and hotels may have up to about 10 days of reserves remaining, he said, adding that many businesses were considering limiting menus or adjusting operations to manage dwindling supplies.