Rupee started the week on a negative note, falling 12 paise against the US dollar in early trade on Monday as rising crude oil prices and escalating tensions in the Middle East fuelled demand for the greenback.Rupee traded at 96.42 against the US dollar after opening at 96.53 in the interbank foreign exchange market, compared with its previous close of 96.30. The local currency had ended Friday’s session 12 paise stronger, supported by upbeat domestic market sentiment and lower US treasury yields.According to forex traders, foreign capital outflows from equity markets also contributed to the weakness in rupee.Oil prices remained elevated as Brent crude, the global benchmark, rose 2.45% to $90.26 a barrel in futures trade. The surge followed a sharp escalation in the US-Iran conflict after last month’s interim agreement aimed at permanently ending the fighting collapsed, while shipping traffic through the Strait of Hormuz was largely stalled.The conflict intensified further early on Monday when the United States launched another round of airstrikes on Iran after announcing the death of another American service member. Iran fired missiles towards Jordan, raising the risk of the conflict spreading into neighbouring Israel. Bahrain, meanwhile, activated its missile warning sirens, cautioning against a possible retaliatory strike by Iran following the US attacks.Despite the pressure on rupee, the dollar index, which measures the US currency against a basket of six major currencies, was marginally lower at 100.54, down 0.05%.Dalal Street also traded in red, with Sensex falling 593.78 points, or 0.76%, to 77,557.67. NSE Nifty50 declined 169.20 points, or 0.70%, to 24,165.10.Exchange data showed Foreign Institutional Investors (FIIs) sold equities worth a net Rs 376.41 crore on Friday.Separately, Reserve Bank data released on Friday showed India’s foreign exchange reserves increased by $964 million to $675.157 billion in the week ended July 10. In the previous reporting week, the reserves had risen by $7.26 billion to $674.193 billion.