Oil prices surged 10 per cent to a four-week high on Tuesday, raising fresh fears of another jump in Australian petrol and diesel prices as conflict in the Middle East intensified.

US President Donald Trump said Washington would reimpose a blockade on Iranian vessels transiting the Strait of Hormuz, while allowing ships sailing under other national flags to pass.

Mr Trump also said the United States would charge a fee equal to 20 per cent of cargo values in return for providing security through the strategically important waterway.

Brent crude jumped to $US83.86 a barrel ($121.18) following the announcement, while benchmark diesel prices surged 9.8 per cent to $US1106.75 a tonne ($1599.35).

NRMA spokesman Peter Khoury said movements in global oil markets typically took between seven and 10 days to flow through to prices at Australian service stations.

“Rising terminal gate prices would be the first indication to expect pump prices to rise again,” he said.

The Federal Government extended its temporary fuel excise relief from July 1 until August 2, giving motorists a discount of 16¢ a litre. The discount had previously been 32¢ a litre.

Mr Khoury said it was too early to determine whether the latest increase in oil and diesel prices would force the Government to extend the relief again.

“They’ll keep their options open, which is what they did with the July deadline. But looking at today’s prices if you put 16 cents back on it’s nothing like what we were paying in April, so we’ll have to wait and see if things really escalate,” he said.

Premium 98 unleaded was selling for about $1.90 a litre at service stations in Sydney’s eastern suburbs on Tuesday, according to the NSW Government’s FuelCheck service.

The national average price for regular unleaded petrol was about $1.66 a litre, according to the NRMA.

In April, prices peaked as high as $2.70 a litre for Premium 98 and more than $3 per litre for diesel as the Government scrambled to secure dwindling supplies from refiners in Singapore and Malaysia.

“Compounding matters are attacks by Ukraine on Russian energy infrastructure. Russia’s crude oil output fell to the lowest level in at least two and a half years in June,” ANZ Bank economist Daniel Hynes said.

Shares, gold fall on rate rise bets

Interest rate traders still expect the Reserve Bank of Australia to hold interest rates at 4.35 per cent at its August 11 monetary policy meeting, with a cumulative 17 basis points of hikes priced in for the remainder of 2026.

Gold prices also fell below $US4000 an ounce for the first time in three weeks, after US Federal Reserve governor Chris Waller hinted the world’s largest central bank may need to lift rates to battle inflation.

“Gold slumped as the escalation in the Middle East fuelled expectations of higher inflation leading to higher interest rates,” Mr Hynes said.

“Federal Reserve governor, Christopher Waller, said policymakers may need to raise rates in the near term if underlying inflation continues to signal broad price pressures.”

On Wall Street, tech stocks slumped and futures point to the S&P/ASX 200 falling at the open.

The Australian dollar is down 2.3 per cent over the past month to buy 69.2 US cents.