Iran Strikes Back as Mideast Conflict Widens

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Iran strikes back following the killing of its supreme leader.

We'll get the latest as conflict spreads across the Middle East.

Combat operations continue at this time in full force,

and they will continue until all of our objectives are achieved.

Plus, we'll take a look at the economic impact

as fighting sends oil prices surging and upends global supply chains.

It's Monday, March 2.

I'm Luke Vargas for the Wall Street Journal,

and here is the AM edition of What's News,

the top headlines and business stories moving your world today.

48 hours after launching major combat operations against Iran,

the US and Israel are keeping up the fight.

We report that they have collectively struck more than 2,000 targets inside Iran,

and speaking last night, President Trump pledged to push on,

saying the US would avenge the death of three American troops killed over the weekend.

We grieve for the true American patriots who have made the ultimate sacrifice for our nation,

even as we continue the righteous mission for which they gave their lives.

Meanwhile, the US is far from alone in coming under fire as Israel,

a number of Gulf states, and even the Mediterranean island of Cyprus,

home to a British military base, find themselves on the receiving end of Iranian counterattacks.

Here to make sense of what's going on,

is Wall Street Journal Middle East editor Andrew Dowell

drew 2,000 targets struck within Iran.

Do we know what those are?

Can we start to sort through what has actually been achieved here?

How are we measuring progress in this campaign?

It's difficult from the outside to measure that progress just because the goals that

you've set are pretty expansive and difficult to track.

So the administration's been clear they want to make sure that

Iran doesn't never get a nuclear weapon.

They've also talked about limiting their production of ballistic missiles

and even make clear that they want the people of Iran to rise up and overthrow the regime.

So the US and Israel went hard at Iran's leadership at the beginning of the conflict.

They killed Supreme Leader Ali Hamine and a number of other top military and political figures.

They've hit missile sites around the country.

They've claimed to have sunk a number of Iranian naval ships and they've been pounding away

with sort of increasing ferrofety on the structures of the regime's control,

namely like DRGC and other security services,

facilities that are needed to keep the population in line.

Drew, we should probably add that in addition to those targets,

the Associated Press is reporting that according to the Iranian Red Crescent Society,

these attacks from the US and Israel so far have killed 555 people in Iran.

We don't know how many of those are our members of the military versus

civilians, but that's a factor here as well.

Let's talk about how Iran is fighting back.

We have seen attacks using drones and missiles against military bases,

but also civilian facilities, hotels, airports,

and these attacks occurring in places like Dubai and Abu Dhabi and now affecting hundreds of

thousands of civilians who are all getting caught up in this.

Yeah, Iran had made clear going into this that if they were attacked even in a small way,

that they would immediately regionalize the conflict and they're delivering on that.

The UAE in particular has come under a heavy bombardment.

Last night, they were saying some maybe 700 drones and missiles have been fired at the UAE

in just the first 36 hours of conflict.

Dozens to hundreds more have been fired at Kuwait,

at Bahrain, even Oman got hit a couple of times and then as far away as Cyprus.

And it seems clear from the types of targeting that it's not just military targets.

The US does have military bases in a lot of these places,

but yeah, they're also aiming at cultural symbols,

like the Bordchall out of building in Dubai, the Palm in Dubai,

and hotels and other economic infrastructure elsewhere.

So it's an enormous problem for the Gulf, honestly.

These countries, particularly the UAE, have built themselves as

in Oasis, Palm in the middle of a very turbulent and violent Middle East.

The UAE is a commercial hub for the world.

Dubai is a massively international city.

The airport is the busiest one in the world for international travelers.

Second busiest in the world period and it's been hit.

And overwhelming percentage of the population is expatriate.

So there's a real risk to these countries that people's opinions could change,

their reputation could change, and they could start being seen.

Like a lot of them in Oles is a place to be avoided as opposed to one to flock to

and bring money to.

You indicated earlier the intention here bringing the fight to these countries,

maybe an effort on Iran's part to draw this to a close,

but at least our chief foreign correspondent Yaroslav Trafimov reporting sort of overnight,

perhaps it could have the opposite effect, kind of deepening the resolve of these countries

to fight back against Iran, maybe put this nuisance to bed once and for all.

Is that possible?

Yeah, I think he's definitely onto something there.

Now that Iran has shown a willingness to attack the Gulf, and now that

Iran has shown a willingness to do that, even though the Gulf publicly denied the U.S.

access to its base in an airspace in order to conduct the attack,

they're very likely thinking now that this is a threat that they can't live with,

and that will pose an existential threat to their own economies and economic plans

if it persists.

A lot to watch, and that's not all of it, because we finally have to mention there is now a battle

rapidly escalating between Iran's proxy in Lebanon, Hezbollah and Israel, a very fragile

ceasefire had been in place between those two sides dating back to the end of 2024,

and now it seems the litus is fully come off and fighting, picking up very rapidly there.

Yeah, that's right. I mean, the ceasefire has existed, but it's only really been a ceasefire

in name, and it's been pretty one-sided. Israel's military has attacked Hezbollah targets,

or whether it's Hezbollah targets in Lebanon more than a thousand times during that period.

The Lebanese army has been working to disarm Hezbollah with limited success,

and Israel has been sort of waiting for a chance to go back in and finish the job,

and Hezbollah just gave them one.

So Hezbollah as a group aligned with Iran is under a lot of pressure internally to

react, especially to the killing of Supreme Leader Ali Khamenei, and they have,

but they've opened themselves up now to pretty significant attack by Israel.

Andrew Dowell is the Wall Street Journal's Middle East editor of a feeling we'll be back on

with you as the week progresses. Drew, thank you so much for the update. Thanks.

Well, away from the battlefield, this conflict is also leading to major political changes in Iran.

Journal correspondent Sunar Asmosin has been monitoring who in the Iranian leadership

has been taken out by these U.S. and Israeli strikes, and he joins me now with more.

Sunar the Ayatollah is dead. The killing of the Supreme Leader Ali Khamenei on Saturday

definitely dealing a blow to Iran's ruling structure, and yet I think a lot of people are

asking at this point if this is actually changing anything, what can you say? How is the Iranian

establishment reacting here? I think you would be a bit cavalier to say that the killing of

Khamenei doesn't change anything, but the Iranian system has been built to not rely on one person,

even if that person like Khamenei, like the Supreme Leader, has the final say on all matters

of national security. He always surrounded himself with a lot of advisors and relegated decision-making

to a lot of people around him. Military commanders, but also political civilian officials,

and probably in preparation for something like this. I mean, are we seeing signs that this is

proceeding in an orderly fashion, or are there, I don't know, indications of some sort of

destabilizing power vacuum that someone else might try to sweep into? Yeah, actually it's happening

according to the Constitution in what I guess you'd call an orderly fashion considering the

circumstances. So the first step is to form a three-man council, and that council consists of

the president, the head of the judiciary, and then a member of what's known as the Guardian

Council, which is a powerful clerical council, that has been formed, and they are now sort of the

interim leadership council. Then what's known as the assembly of experts will select a new

supreme leader. How long that's going to take? We don't know. I mean, we've seen the CIA had

assessed that a hardliner could take power in the Iatola's absence. I mean, is it safe to say

we're not seeing regime change per se? The regime is just finding someone new to take the place

of the Iatola. I think the nature of what we call the regime of the Islamic system and the Islamic

Republic will be different because Ayatollah Khamenei was so powerful and he kind of weeded out

all clerical rivals, which you say that the supreme leader has to be a cleric, and he has to be a

cleric of a certain rank as well, has to be an Iatola, but there is no immediate successor here,

and that is partly by design because he also didn't want anyone to challenge his authority while

he was alive. I think the next supreme leader is going to be a person that has a much more

ceremonial role in Iran. I think we'll see more sort of a collective leadership working behind

the scenes. It's a lot of people and it's a lot of different bodies. It's clerical bodies is also

the military, especially the revolutionary guard, which is a political and economic behemoth,

and all these people were talking hundreds of thousands of people who are either in the regime

or are dependent on the regime. So a regime change, like we saw for example in Iraq, that would

mean uprooting this whole structure in the system. President Trump said last night that Iran's

entire military command is gone, adding as well, that many of them want to surrender. Those are

Trump's words there. Do we see any indication of that? At least in terms of the pace of attacks

that we've been witnessing, clearly someone is making military decision still and a lot of them.

Yeah, and I think in brief, no, we're not seeing any signs of defections or people laying down

yet. He is right that a lot of senior commanders have been killed in this way for strikes,

and a lot were killed last year during the war with Israel. I think 30 top commanders were killed

last year, but that didn't slow the pace of Iran's retaliation. It didn't slow its ability to

respond to Israeli strikes. And we've seen the same thing now. Iran is bombing almost every

country in the Gulf. It's striking back against Israel. It's caused a few fatalities among U.S.

soldiers. Questions, of course, how long it can keep this up, but it is designed. The Iranian

system is designed to continue fighting even if top commanders are killed.

I've been speaking to Wall Street Journal correspondent Sunat Rasmussen. Thank you as always.

Thank you having me. Coming up, we'll look at the market impact of the conflict. As some investors

predict we could see $100 of their oil this week, that in the rest of the day's news after the break.

Oil prices are surging as strikes on ships in and around the

straight of Hormuz have thrust one of the world's key choke points for energy into the crossfire.

Natural gas prices have also jumped, and investors wary of a wider conflict in the

Middle East are flocking to safe havens like gold and the dollar. Iranian officials and medium

have shared conflicting statements about whether Tehran intends to block sea traffic through the

strait, but Dow Jones commodities reporter Julia Petroni says the uncertainty is already having

a major market impact. 20 million barrels of crude oil and refined products pass through this

strait each day, meaning that even limited delays can have significant impacts for supply chains.

Now what we know is that Iran's Islamic Revolutionary Guard Corps has warned ships to avoid this

passage, and this is obviously prompted many vessels to turn back and re-root. It's not just

commodities, container shipping companies, including Merseq, Apec Lloyd, are re-rooting vessels around

the southern tip of Africa, trying to avoid the Swiss canal and the straight of Hormuz.

We have other pipelines bypassing the strait, especially in Saudi Arabia and the UAE. However,

these cannot fully compensate for the strait's capacity in the event of a complete closure,

so that would have a major, major impact for supply chains.

Should Iran shut the strait, several banks are predicting $100 a barrel oil could be in play.

A type of price jump that would push up the cost of fuel for cars, power plants, and more

the world over. US forces reportedly used Anthropics AI to coordinate

air strikes in Iran, defying a White House order to stop working with the company.

The move underscores how deeply embedded the technology remains in military operations,

in spite of growing tensions between the Pentagon and the tech firm. Anthropics CEO Dario Amadeh

addressed the friction in an exclusive interview with CBS this weekend.

We wanted to stand up for American values, and when we were threatened with supply chain

designation and defense production act, which are unprecedented intrusions into the private economy

by the government, we we exercised our classic First Amendment rights to speak up and disagree

with the government. Despite the federal blacklist Anthropics AI bot Claude has surged the top

of the Apple App Store, outperforming rivals Chatchy BT and Google Gemini. The rise follows a

public backlash against OpenAI after its recent government partnership. Meanwhile,

Nvidia says it plans to release a new processor designed to help OpenAI and other customers

to build faster and more efficient tools. People familiar with the details say the company is

creating a system for so-called inference computing, a form of processing that allows AI models

to respond to queries. And EV sales in China dropped sharply last month,

highlighting a tough road ahead for Chinese car makers after years of rapid growth and aggressive

expansion. Sales of BYD vehicles, the world's biggest EV seller, were down 41% from a year earlier.

The data comes ahead of one of the year's biggest policy events for China watchers.

This week's National People's Congress is expected to approve a five-year economic blueprint

that will prioritize turning China into a technological superpower that can rival the US.

And that's it for what's news for this Monday morning. Today's show was produced by

Hadi Moyer and Daniel Bach. Our supervising producer is Sandra Kylhoff, and I'm Luke

Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.

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