The S&P/ASX 200 fell 0.4 per cent to 8,778 by mid-morning after oil's biggest one-day surge in years collided with fresh inflation fears, as Donald Trump declared the US would reinstate a blockade on Iranian ships and charge a 20 per cent fee on all cargo passing through the Strait of Hormuz. Brent crude rose another 1.1 per cent to $US84.22 a barrel after leaping 9 per cent overnight, while US oil traded near $US80.18.

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