Australian shares plunged on Monday, wiping about $13obn from the value of the ASX midway through the trading session, after a sharp rise in oil prices caused by the Middle East conflict sparked concerns of a breakout in global inflation.

The benchmark S&P/ASX 200 was down 4% in lunchtime trading to dive below the 8,500 point mark, marking the single biggest one-day drop since the announcement of Donald Trump’s “liberation day” tariffs last year.

The selldown is linked to disrupted oil supplies, the single biggest contributor to global inflation, which make almost all goods and services more expensive, from petrol and groceries to utilities and travel.

Global oil prices surged past $US100 a barrel shortly before the Australian share market opened for the week, spooking investors.

Hello and welcome to our continuing live coverage of the war on Iran.

Here are the main developments:

• Iran has named Mojtaba Khamenei as the country’s new supreme leader after the killing of his father Ayatollah Ali Khamenei in US-Israeli strikes, state-run media announced. He was selected by Iran’s Assembly of Experts, an 88-member body of elected senior clerics tasked with choosing the supreme leader.

• Donald Trump warned that Iran’s new leader “is not going to last long” if the Iranians do not get his approval first for the theocratic posting. “He’s going to have to get approval from us,” the president told ABC News. “If he doesn’t get approval from us he’s not going to last long. We want to make sure that we don’t have to go back every 10 years, when you don’t have a president like me that’s not going to do it.”

• The Iran war has driven the price of crude oil above $100 per barrel for the first time since 2022.

• Trump brushed aside concerns about the surging price of oil caused by the US-Israeli airstrikes on Iran, even as the price of crude topped $100 per barrel for the first time since 2022. “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” Trump wrote, adding all in capitals that “only fools would think differently”.

• Another US military service member has died from wounds sustained during Iran’s initial counter-attack a week ago, bringing the number of US troops killed in action so far in the war with Iran to seven, the US military said on Sunday.

• Lebanon’s health ministry said the number of people killed from Israeli airstrikes in the past week had increased to 394, including many women and children.

• The Iranian army said on ​Sunday that at ‌least 104 people were killed and 32 ​were wounded ​in an attack by ⁠the US on ​an Iranian warship ​off Sri Lanka’s coast last week.

• The Israel Defense Forces began “extensive strikes” against the “infrastructure” of the Iranian regime in Tehran and across other areas in Iran. Despite Israel saying it is striking military or “terror” targets in its war on Iran, many civilians have been killed in its attacks.

• Overnight strikes by the US and Israel hit five oil sites around Tehran, according to an Iran official. The official said the five facilities “were damaged” but the “fire was brought under control”. “If you can tolerate oil at more than $200 per barrel, continue this game,” a spokesperson for Iran’s Revolutionary Guards said on Sunday.

• Iranian foreign ministry spokesperson Esmaeil Baghaei said the US-Israeli aerial bombardment of Iranian energy infrastructure sites marked a “dangerous new phase” of the conflict and amounted to a war crime.