Iranian rial hits record low as oil tops $100 a barrel

The Iranian rial plunged to a fresh record low against the U.S. dollar on Thursday, with the greenback surpassing the 234,000-toman mark in Iran's free market as escalating military hostilities between Washington and Tehran sent crude oil prices surging above $100 a barrel and rattled currency markets worldwide.

Rial in Freefall

The dollar rose to 234,190 tomans in early trading Thursday, up from 232,700 tomans at the previous day's close, before climbing further to 234,740 tomans by mid-afternoon, according to IranWire, citing the Iranian financial outlet Donya-e-Eqtesad. The euro was quoted at 273,040 tomans, while the British pound reached 318,000 tomans. Gold prices also surged, with 18-karat gold rising to 24,238,000 tomans per gram.iranwire

The rial's decline has accelerated sharply since the U.S.-Iran conflict began on February 28. The currency was trading at roughly 2.02 million rials per dollar in late August before losing more than 12% of its value in a matter of weeks. Iran's point-to-point inflation rate had already reached 89% in August, with food and beverage prices up 127.5% year-over-year, even before the latest depreciation. IranWire attributed the latest slide to what it called "Operation Economic Rejection," a U.S. pressure campaign, alongside the UAE's suspension of financial and commercial transactions with Iran.cryptobriefing+2

Oil Markets in Turmoil

Crude oil prices provided the backdrop for the currency shock. Brent crude breached $100 a barrel on Wednesday for the first time since July and held above that level Thursday, as Reuters reported both benchmarks trading above $100 amid the largest attacks on shipping since the six-month-old conflict began. CNBC reported that West Texas Intermediate futures hit a session high of $100.88 per barrel, the highest in more than three months. The spike followed U.S. strikes on Iranian oil tankers and Iranian ballistic missile launches targeting U.S. warships, according to Al Jazeera.cnbc+2

Global Ripple Effects

The oil shock reverberated across currency markets. South Korea's won fell to 1,339.2 per dollar, down 3.1 won from the previous session, as Brent crude hovered above $100, Yonhap reported. Canada's dollar eased to 1.3810 per U.S. dollar as bond yields climbed and investors repriced inflation risk, with Canada's 2-year government bond yield rising 11.7 basis points to 3.288%, its highest since November 2024. The benchmark Korea Composite Stock Price Index fell 0.25% to close at 7,033.92, even as foreigners bought a net 2.4 trillion won in local stocks.finimize+1

The surge in energy costs has reinforced expectations that central banks may be forced to keep monetary policy tighter for longer. As the conflict enters its seventh month with no diplomatic resolution in sight, the economic toll — from Tehran's collapsing currency to rising consumer prices across Asia and North America — continues to mount.