Crude Oil Rises Above $115 After Saudi Refinery Attack Claim; Rupee Under Pressure

Crude oil prices rose above $115 a barrel on Wednesday, October 28, after Yemen’s Iran-aligned Houthi group claimed it had struck a major Saudi Arabian refinery with a missile. Brent crude futures gained 1.4% to $115.47 a barrel, while US West Texas Intermediate (WTI) crude rose 1.4% to $101.33, according to Reuters data reported during early trading.

The reported attack renewed concerns about potential disruptions to global oil supplies amid the conflict involving Iran and its regional allies. Saudi authorities had not immediately confirmed the strike at the time of Reuters’ report, so the claim should not be treated as an independently confirmed attack.

Higher crude prices are a concern for India, which imports nearly 90% of its crude oil requirements. A sustained rise in oil prices can increase the country’s import bill, put pressure on the rupee and raise costs for businesses that rely on fuel and petroleum-based inputs.

Why Crude Oil Prices Rose Above $115

Oil prices recovered on Wednesday after falling by nearly $2 a barrel in the previous session. The latest gains followed the Houthi group’s claim that it had hit Saudi Arabia’s largest oil refinery, a facility with a reported capacity of 550,000 barrels per day.

The claim heightened concerns about the risk of further supply disruptions in the Middle East, a critical region for global oil production and shipping. Markets have also been monitoring the wider conflict involving Iran and the potential for further escalation.

The price move remained sensitive to geopolitical developments. ING commodity strategists told Reuters that oil markets were pricing in a greater risk of renewed escalation. The direction of prices will depend partly on whether further attacks occur and whether crude exports and shipping routes remain operational.

Traders were also watching US inventory data and the upcoming OPEC+ meeting, where producers were expected to maintain December output targets.

Rupee Faces Pressure As India’s Oil Bill Rises

Higher crude prices can weigh on the Indian rupee by increasing demand for dollars from oil importers. When import costs rise, oil companies need more foreign currency to pay suppliers, adding to pressure on the domestic currency.

The rupee traded at ₹95.19 per US dollar at 11 am IST on October 28, compared with the previous session’s close of ₹95.1150, Reuters reported. Traders also indicated that state-run banks were selling dollars, likely on behalf of the Reserve Bank of India, helping limit the rupee’s decline.

India’s exposure to oil prices makes the currency particularly sensitive to supply shocks. A sustained increase in crude prices can also widen the trade deficit and add to imported inflation, depending on the duration of the price rise and how much of the increase is passed on to consumers.

Which Indian Sectors Could Be Affected?

A prolonged rise in crude oil prices can have different effects across the Indian market.

• Oil marketing companies: Higher crude costs can squeeze marketing margins if retail petrol and diesel prices do not adjust proportionately.

• Aviation: Airlines face higher aviation turbine fuel costs, which can pressure profitability.

• Paints and chemicals: Many companies use crude-linked derivatives as raw materials, making input costs vulnerable to higher oil prices.

• Tyres: Synthetic rubber and other petroleum-linked inputs can become more expensive.

• Transport and logistics: Higher fuel costs can raise freight and distribution expenses, with the impact depending on companies’ ability to pass costs on.

• Consumers: If higher energy costs persist and feed through to transport and other goods, household expenses could rise.

The effect will depend on how long crude remains elevated, the movement in the rupee, domestic fuel pricing and companies’ ability to absorb or pass on higher costs.

For now, the reported refinery strike has added another source of uncertainty to an already volatile oil market. Investors will continue to monitor developments in the Middle East, official confirmation of the reported attack and subsequent movements in crude prices.

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