New Delhi [India], July 20 (ANI): Rising crude oil prices have renewed concerns over inflation and India's exposure to an energy shock, which could impact the rupee and foreign portfolio investment (FPI) flows.

Brent crude futures rose USD 2.69, or 3.05 per cent, to USD 90.79 per barrel by 2343 GMT, the highest level since June 11. The benchmark has gained 15.9 per cent over the past week, marking its biggest weekly rise since April. At the time of reporting, Brent crude was trading at around USD 90.42 per barrel, while WTI crude was at around USD 84.47 per barrel.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said, 'There are near-term headwinds and tailwinds for the market now. The strongest headwind is Brent crude spiking above $90 on escalating tensions between US and Iran. If this trend continues, India's vulnerability to energy shock will resurface with negative implications for the rupee and FPI flows.'

Highlighting the rise in oil prices, Bank of Baroda said in a report that 'inflationary concerns have resurfaced.'

The report added that expectations of a US Federal Reserve rate hike have increased after Cleveland Fed President indicated that higher interest rates may be needed to control inflation. It noted, 'probability of a rate hike in Sep'26 have increased to 52.4% versus 47% on 16 Jul 2026. Separately, industrial production in the US increased at a steady rate of 0.1% in May'26 on a MoM basis,' it said.

On the currency market, the report said global currencies traded in a narrow range amid rising US-Iran tensions, with the British pound weakening the most. It added, 'INR appreciated marginally despite higher oil prices. However, it is trading weaker today, in line with other Asian currencies,' BoB noted.

Devarsh Vakil, Head of Prime Research at HDFC Securities, said, 'US markets saw heightened volatility this week as a multi-front convergence -- renewed U.S.-Iran conflict, a tech sector rotation, and closely watched inflation data -- pushed major indexes lower, snapping a brief mid-summer winning streak.'

Referring to the rise in oil prices, Vakil said, 'The latest advance followed another escalation in the conflict, with the United States and Iran exchanging fresh attacks over the weekend.'

He added, 'Tehran said the ceasefire between the two countries had effectively broken down, increasing fears that disruptions to one of the world's busiest oil shipping routes could intensify.' (ANI)