The Indian rupee opened 18 paise lower at 95.45 against the US dollar on June 3 as fresh geopolitical tensions between the United States and Iran triggered a rise in global crude oil prices and weighed on risk sentiment.

Brent crude oil prices climbed nearly 1% to trade close to $97 per barrel after reports of fresh exchanges of fire between the US and Iran, while diplomatic efforts to ease tensions showed limited progress. The increase in oil prices raised concerns for India, which imports a significant portion of its crude oil requirements, potentially increasing the country's import bill and putting pressure on the rupee.

Market participants also remained cautious ahead of the Reserve Bank of India's monetary policy announcement, with traders closely watching for any policy measures that could influence currency markets. The combination of elevated oil prices and geopolitical uncertainty prompted investors to seek safety in the US dollar, contributing to weakness in emerging market currencies, including the rupee.

Analysts noted that sustained high crude prices could adversely impact India's current account balance and inflation outlook. In addition, foreign portfolio investor activity and global risk appetite are expected to remain key factors influencing the rupee's trajectory in the near term.

The movement in the currency market highlights the sensitivity of the rupee to global geopolitical developments and energy price fluctuations, especially during periods of heightened uncertainty in international markets.