Goa, June 13 -- A sharp spike in global oil prices following Israeli airstrikes on Iran sent shockwaves through financial markets on Friday, prompting the Reserve Bank of India (RBI) to intervene and curb a steep decline in the Indian rupee.

The geopolitical escalation sparked broad risk aversion: Asian currencies and equities tumbled, U.S. equity futures slipped, and safe-haven assets like gold and the U.S. dollar rallied. Brent crude surged as much as 11% intraday, reflecting fears of supply disruptions from the region.

As a result of the oil shock, the rupee dropped to 86.20 against the U.S. dollar-its weakest level in two months. The RBI is believed to have intervened by selling dollars through state-owned banks, helping stabilize t...