Near midday on Wednesday, the benchmark S&P/ASX200 index was down 89.7 points, or 1.02 per cent, to 8,714.2, while the broader All Ordinaries had dropped 94.4 points, or 1.05 per cent, to 8,910.3.
Barring an afternoon turnaround, the session will be the ASX's third straight day of losses and worst since a 1.13 per cent slide on June 4. The ASX200 has also once again slipped into the red for the year.
The losses come after the US launched "powerful" airstrikes targeting Iran's ports, missile and drone sites and air defences, in retaliation for the Islamic republic's alleged targeting of two tankers in the Strait of Hormuz.
Iran's deputy foreign minister said in a statement that the attacks were a breach of a treaty the two sides signed in June and said it would take "decisive measures" in response.
Oil prices jumped, with Brent crude rising $US3 to a two-week high of $US75.75 a barrel, propelling the ASX's energy sector up by 2.5 per cent.
Woodside had grown 2.6 per cent, Santos had climbed 4.4 per cent and Yancoal had added 3.6 per cent.
Consumer staples and utilities were also higher but the ASX's eight other sectors were in the red.
The materials/mining sector had dropped 2.5 per cent, with BHP falling 3.3 per cent, Rio Tinto subtracting 2.3 per cent and Fortescue dipping 0.9 per cent.
Gold miners were also lower as the yellow metal fell roughly $US40 to a six-day low of $US4,125 an ounce, with Evolution losing 4.6 per cent and Northern Star dropping 1.9 per cent.
In the tech sector, WiseTech Global had fallen 7.5 per cent, giving back the previous day's gains and then some, following the resignation of founder Richard White as an executive director on Tuesday.
Xero was down 3.0 per cent, Life360 had fallen 2.6 per cent and Appen had retreated 4.8 per cent.
The Australian dollar was buying 69.40 US cents, from 69.44 US cents at 5pm on Tuesday.
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