Australian shares are expected to open with a modest decline on Tuesday as oil surged over escalating Middle East tensions.

Brent crude oil futures jumped over 9% to trade around $83 per barrel after US President Donald Trump said the US would impose a 20% toll on shipping in the Strait of Hormuz. The US ​is set to reinstate a naval blockade on Iran on Tuesday.

Meanwhile, US Federal Reserve governor Christopher Waller said rate increases may be needed if underlying inflation continues to signal broad price pressures.

Overnight, the S&P 500, Nasdaq Composite, and Dow Jones fell 0.8%, 1.6%, and 0.3%, respectively.

In the macroeconomy, the ANZ-Roy Morgan Australian Consumer Confidence rose 0.6 points in the week ended July 10 to 75.3 points. The four-week moving average lifted 1.1 points to 74.7 points.

In corporate news, Genesis Minerals (ASX:GMD) agreed to acquire Vault Minerals (ASX:VAU) for AU$5.274 per share. Vault shareholders will receive 0.7629 new Genesis ordinary shares plus AU$0.475 in cash for each Vault share they hold.

Recce Pharmaceuticals (ASX:RCE) said the Intellectual Property Office of Vietnam formally granted a Family 4 patent for its anti-infectives, expiring in 2041.

Australia's benchmark index edged up 0.03% or 2.5 points on Monday to close at 8,808.50.