The Australian sharemarket has slumped to a fresh six-week low as crude oil traded above $US100 a barrel amid further escalation in the US war with Iran.

The Australian sharemarket slumped to a six-week low on Tuesday, with investors bracing for higher interest rates as the Middle East conflict continues to push up fuel costs.

Rising oil prices have worsened worries about the high inflation weighing on consumers and companies with the Reserve Bank under increasing pressure to raise rates.