Australian share market braces for worst weekly loss in years as surging oil prices spook investors

The Australian share market fell by 1.2 per cent immediately after opening today, with investors spooked by skyrocketing oil prices due to the conflict in the Middle East.

The S&P/ASX 200 Index was down 111.10 points, or by 1.2 per cent to 8829.50, taking total losses for the week to about 4 per cent.

It's shaping to be the worst weekly loss since May 2022, when the Reserve Bank began hiking interest rates.

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Bond markets are now bracing for potential consecutive RBA cash rate hikes by May.

The US-Israel strike on Iran resulted in soaring oil prices after Iran's Revolutionary Guard moved to close the Strait of Hormuz earlier this week.

The Strait of Hormuz, a narrow waterway off southern Iran, is the main route for shipping crude oil from countries such as Saudi Arabia and Kuwait to the rest of the world.

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The global energy market has responded swiftly to the geopolitical tensions in the Gulf region as the closure triggers major disruption to production and supplies.

The Australian dollar also dipped by one per cent, and at one point dipped under 70 US cents. As of 11am (AEDT), it is buying a tick over 70 cents against the Greenback.

A 1.5 per cent plunge would mark the dollar's biggest drop since October last year.

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Head of FX strategy at National Australia Bank Ray Attrill told the Australian Financial Review the scale of the fall is "relatively modest".

"The Aussie is showing a degree of resilience," he said.

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