Oil Price Today Hits $120 Per Barrel As Middle East Conflict Escalates; Sensex, Nifty Plunge And Rupee Slides To Record Low- What We Know

Oil prices surged to near $120 per barrel, the highest level since July 2022, as escalating tensions in West Asia continue to disrupt global energy markets. The surge comes nearly two months after a joint airstrike by the US and Israel on Iran on February 28, which has driven crude prices up by almost 60 percent. 

Analysts warn that prolonged high oil prices could worsen inflationary pressures in India, which imports nearly 90 percent of its crude oil requirements.

Oil Price Today: Indian Markets React: Sensex, Nifty Plunge

The rise in crude prices has already rattled Indian markets. The Sensex fell 1.71 percent, closing at 77,566.16, while the Nifty50 ended 1.73 percent lower at 24,028.05, hitting intraday lows of 76,424.55 and 23,868.05, respectively. The Nifty PSU Bank index experienced the sharpest decline, dropping 3.97 percent. 

Foreign institutional investors pulled out $829.9 million on Monday, bringing cumulative outflows for the financial year to $6.1 billion. Analysts note that the combined market capitalization of all BSE-listed companies fell by Rs 8.5 lakh crore, eroding wealth for Indian investors by over Rs 22 lakh crore in just over a week.

Oil Price Today: Rupee Crashes to Record Low

The Indian rupee slid to a record closing low of 92.33 against the US dollar, losing 59 paise during the session. Currency weakness, combined with rising crude prices and sustained FII selling, has intensified the sell-off in domestic equities. Experts warn that if oil prices remain elevated, the rupee could face further pressure, aggravating inflation and trade deficit concerns.

Oil Price Today: Geopolitical Factors Driving Oil Prices

Brent crude’s surge comes amid reports that Saudi Arabia and other Gulf producers, including Iraq, Kuwait, Qatar, and the UAE, are cutting output. Supply disruptions have intensified due to blocked shipments in the Strait of Hormuz, raising fears of further global energy shortages. Forecasts suggest Brent crude could climb to between $120 and $130, while WTI crude may even reach $180 per barrel if the Middle East crisis continues unabated.

Oil Price Today: Government Response and India’s Oil Supply

Despite rising crude prices, Indian officials have ruled out immediate hikes in petrol or diesel pump prices. India holds 5.3 million tonnes of underground strategic reserves, at approximately 80 percent capacity, ensuring adequate domestic supply. The government stressed that there is no scarcity of oil or gas, and India also produces and exports Aviation Turbine Fuel (ATF). Authorities added that India is not bound by directives from the International Energy Agency, as it is not a full member.

Oil Price Today: Global Measures to Tackle the Crisis

Countries across the world have taken emergency steps to manage fuel prices amid rising oil costs. Japan has readied its national oil reserves for possible release, China has halted fuel exports from refiners, South Korea has capped domestic fuel prices for the first time in 30 years, Vietnam has removed fuel import tariffs, and Bangladesh has closed universities to conserve electricity and fuel.

Outlook: Market Volatility Likely to Continue

Analysts caution that the combination of soaring oil prices and ongoing geopolitical uncertainty could continue to pressure Indian markets. Rising energy costs are expected to push inflation higher, widen the trade deficit, and weaken the rupee further. 

As a result, a smooth recovery for Indian equities appears unlikely in the near term, leaving investors bracing for continued volatility as the West Asia conflict shapes global oil supply and financial markets.

ALSO READ: Stock Market Closing Bell: Dalal Street Sees Mild Recovery After Early Panic Sell-Off, Sensex Still Down 1352 Points As Nifty Hovers Near 24,000