On Tuesday, Australia’s domestic sharemarket closed a volatile trading session near flat, after a geopolitical shakeup in the critical Strait of Hormuz triggered the largest single-day surge in global crude oil prices since the height of the COVID-19 pandemic, reshaping sector performance across the Australian Securities Exchange (ASX).
The benchmark ASX 200 index finished the session flat at 8808.50 points, while the broader All Ordinaries index slipped a negligible 1.70 points, or 0.02%, to settle at 9001.30. The Australian dollar also edged up 0.19% against the U.S. dollar to trade at 69.32 U.S. cents by market close. Of the 11 major sectors tracked on the ASX, seven closed in positive territory, led by a sharp rally in energy stocks that offset broad losses across the country’s four largest retail banks.
The market movement was sparked by an unexpected announcement from former U.S. President Donald Trump, who declared via his social platform Truth Social that the United States would position itself as the “Guardian of the Hormuz Strait” and impose a 20% toll on all cargo transiting the key global shipping chokepoint. Around 20% of the world’s daily oil supply passes through the strait, making geopolitical instability there a major catalyst for global energy price shifts. Following Trump’s announcement, Iran launched retaliatory attacks targeting Bahrain, Kuwait, Jordan, and two commercial tankers linked to the United Arab Emirates that were traveling through the waterway, amplifying market uncertainty.
The geopolitical tensions drove a dramatic 9% overnight jump in Brent crude prices, followed by a further 1% uptick to settle at $US84.30 ($A122) per barrel — marking one of the largest single-day price increases for the global benchmark since the COVID-19 pandemic. The oil price surge translated directly to strong gains for Australia’s top energy producers: Woodside Energy’s shares climbed 3% to close at $30.20, Santos added 1.32% to finish at $7.70, and fuel retailer Ampol rose 2.20% to close at $37.56.
Those energy gains were largely offset by a pullback from Australia’s four major banks, which ended a recent streak of strong performance. Commonwealth Bank of Australia shares fell 0.41% to $169.30, Westpac Banking Corporation dropped 0.70% to $36.64, National Australia Bank declined 0.85% to $39.71, and Australia and New Zealand Banking Group fell 0.96% to $36.11.
Tony Sycamore, senior market analyst for global financial services firm IG, noted that the Australian market opened lower on Tuesday, following a soft session on Wall Street driven by weakness in semiconductor stocks, hawkish comments from a Federal Reserve governor, and early reactions to the new U.S. posture on Hormuz. “The early fall followed a soft session on Wall Street, weighed down by weakness in chipmakers, higher oil prices after President Trump announced that the United States would reinstate its blockade of Iranian shipping and hawkish comments from Fed Governor Waller,” Sycamore explained.
Beyond the energy and banking sectors, several individual companies posted notable movements on Tuesday. Global technology firm Lights Wonder surged 7.98% to 111.60 after reaffirming its 2026 financial outlook of mid-to-high single-digit consolidated growth and confirming it would continue its $US180 million ($A260 million) share repurchase program.
Hospitality and beverage group Endeavour Group slipped 0.86% to $3.45 following the announcement that two senior winemaking leaders, Oakridge chief winemaker David Bicknell and Chapel Hill chief winemaker Michael Fragos, had departed the business. The departures are the latest in a series of changes as the company prepares to exit the wine production industry.
Insurance firm Steadfast Group saw its shares add 0.96% to $5.24 after global private equity giant KKR joined existing bidders Amwins Group and Dragoneer Investment Group in a takeover offer for the business. Biotech firm Mesoblast also posted a 1.28% gain to $2.38 after announcing it had enrolled 300 patients in its randomized clinical trial for a new treatment for chronic lower back pain linked to degenerative disc disease.