Rupee set to weaken on spike in oil prices; Modi calls for fuel conservation

The Indian rupee is poised to weaken at the open on Monday, ​hit by a spike in oil prices on fading optimism ‌over a quick resolution to the US-Iran conflict.

The ​rupee is expected to open in ⁠the 94.75-94.80 range, per traders, having settled at 94.48 on Friday. Brent crude rose more than 3 per cent to $104.50 after US President ‌Donald Trump on Sunday said the Iranian response to a US proposal for peace talks was “unacceptable”.

An ‌Iranian plan sent to the US stressed ‌the ⁠need for an end to the war ⁠on all fronts and the lifting of sanctions on Tehran, along with reparations and a recognition of Iran’s control of the Strait ​of Hormuz, Iranian media ‌reported.

While there appears to be limited appetite on either side to escalate tensions, a durable resolution to the conflict and reopening the strait remains challenging, ‌prolonging the energy disruption, MUFG Bank said in ​a note. Oil markets have been seesawing on every twist in negotiations, with Brent crude ⁠in a range of $86 to $126 over the past month.

Modi calls for fuel conservation

Prime Minister Narendra ‌Modi on Sunday called on citizens and businesses to conserve fuel and revive work-from-home to curb fuel use amid rising energy prices.

The country must save foreign exchange by using less petrol and diesel, he said.

The rupee has, over the last several weeks, ‌been broadly mirroring moves in the oil market, especially at the ​open. Crude is driving the currency’s immediate outlook, considering India’s heavy reliance on oil imports.

The ⁠rupee has shown a relatively firmer underlying tone over the ⁠past three sessions, with bankers pointing to an unwinding of dollar long positions, particularly in ‌the offshore market.

However, the price action has been largely position-driven around US-Iran updates, suggesting conditions remain ​fluid, a private bank trader said.

Published on May 11, 2026