Why Iran Doesn’t Have a New Supreme Leader

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Gulf energy production begins to wind down, risking a global supply shock.

When you shoot down production, these wells take time to go back online.

In the case of gas and in some oil wells, it could be weeks until they're fully back online.

So these disruptions are definitely going to be with us for a while.

Plus, the US resumes diplomatic relations with Venezuela

and will look at the wrapper and champion of Gen Z protests poised to lead Nepal.

It's Friday, March 6th.

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.

Israel says that its military is moving to the next phase of its campaign against Iran,

shifting from surprise attacks to a dismantling of its regime and military capabilities.

Meanwhile, US Defense Secretary Pete Hankseth says the amount of firepower over Iran,

quote, is about to surge dramatically.

A pledge that comes as top defense industry executives prepare to meet President Trump

at the White House today.

We report that Pentagon officials are drawing up plans to replenish US munitions

after pressuring defense contractors for months to up their missile production.

Meanwhile, as we approach the war's one-week mark,

Iran continues to lack a supreme leader after Saturday's killing of Ayatollah Hamani.

I asked journal correspondent Sunar Rasmussen where succession planning currently stands.

Iran has only done this once before, so we don't really know how long it's going to take.

Iran might have a successor lined up, but they haven't announced anything yet.

And the leadership is in a little bit of a bind here.

Selecting a new supreme leader relatively soon would help them in their efforts to show

continuity that the country functions even if you take out the leader.

But on the other hand, whoever they pick will immediately have a target on his back.

I mean, Israel has said as much that they will target the next supreme leader,

so it might be unwise for Tehran to select someone while Israel and the US are still

pummeling the country. And you can say the same for the funeral plans.

Khamenei was killed six days ago, and when the funeral takes place in Tehran,

you will have millions of people in the street.

Is it beyond the US and Israel to strike funeral possession, especially the officials

that want to participate in it? I don't think Iran can be certain of that,

so that might be why we haven't seen the funeral take place yet.

Sooner, President Trump told Reuters yesterday that the US would be involved in choosing

Khamenei's successor, saying that he basically wanted to avoid having to go back into Iran in the

future. Have we seen any indication of this US involvement so far?

I haven't seen any evidence that the US is speaking to people who matter in Iran about who

the next successor should be. I think it's important to understand that the Islamic Republic was

founded on anti-Western imperialism, and that is still the foundation, and that still

would drive the people who run the country. So I'd be very surprised if this decision-making

process is opened up to President Trump. I think it's clear that President Trump is influenced

by Venezuela and his success in influencing who runs that country now, but there is a big

difference between a president and Venezuela and then a supreme leader in Iran. The supreme leader

in Iran is not just the head of government, the armed forces, and the judiciary. He is also the

highest religious authority for up to 200 million Shia Muslims across the world. That is not a

position that foreigners have historically had much influence over. Meanwhile, the war's

economic ripple effects are becoming clear with each passing day, something that journal foreign

correspondent Gargi Konechev has been tracking for us. Gargi, let's start by talking about oil,

shall we? This has long been the backbone of economic activity in the Gulf. What's the latest?

We have on both the state of oil production and its export, which is a crucial factor here as well.

The issue is pretty important for the region because the state of Hormuz, which is this maritime

choke point, through which about the fifth of the world's oil goes through every single day,

is effectively shut down. There's very, very, very few tankers going through, and for a lot of

countries in the region, including Kuwait, Bahrain, some of Saudi production, UAE, they just can't

export it. One thing to watch here is the amount of storage these countries have, because when you

produce oil and cannot export it, you put it into storage, and in normal times, the storage capacity

is enough for some small disruptions in exports, but this could go for another few weeks,

and there's not enough storage in the region. We've seen Iraq already, right? Cut production,

because they've no place to put it. Exactly, exactly. So, Iraq already did that. There's other

countries towards Kuwait, Saudi at some point might run out of storage to the UAE, so this is the

big one, because ultimately if Saudi Arabia starts cutting production even partly, that has

huge impact on the global oil market. This is some of the biggest producers in the world,

so if they start shutting down wells, that has big impact on prices. And that would be a major

reversal of where the global oil market has been the last two years in a state of oversupply.

When we started this year, all the forecasts by major banks and analysts were looking forward

to oversupply market oil prices in the 50s. Right now, if the conflict continues, there's

some forecasts looking at oil prices going up to 100, so doubling what we were supposed to be at

this point. And this is what's a stake here. And of course, this thing has a direct impact on

oil prices around the world, on gas prices, the pump, inflation around the world, so this is

really really important. This obviously has an effect on the producer countries you've been talking

about. A handful of them have also been trying to diversify their economies into things like

tourism, which we've talked about this week are being affected as well by the fighting. But we've

talked less about is how this affects Iran. It's got an oil export economy, also exports

petrochemicals, so definitely connected to that. What do we see going on there? Yeah, Iran's economy

remains kind of heavily dependent on oil exports and petrochemicals. They are biggest

customers in China, where they send about 90% of their crude. Right now, they can't export

most of it because of the Strait of Hormuz Parallelization. So ultimately, Iran, which already

before this conflict had this deep, deep economic crisis, they had huge inflation, double

digits inflation. It's one of the reasons why people were protesting. Exactly, early this year.

Yeah. And now with this conflict, it's very limiting their export potential. That means

their hard currency earnings are down. That means that the sanctions, of course, continue. A lot

of Iran's links to global economy go through the UAE. A lot of their assets are there. And now

the UAE is considering, according to our reporting, is considering freezing those assets,

which would basically sever one of the last links of Iran to the global economy.

Let's talk quickly about natural gas. We've seen LNG futures rising pretty sharply in the

last few days. This is not getting as much attention as higher fuel prices that people would be

paying directly at the pump. But from your reporting and from the reporting of our colleagues,

it sounds like this could be actually the trigger of much broader global disruption.

Absolutely. Because natural gas is really crucial for industry. If natural gas is shutdown in

Qatar and across the region, if natural gas exports are limited, that has impact on prices

and on industry and inflation. And this is a big, big one to watch LNG export from Qatar,

which is one of the top three producers in the world, along with the US and Australia.

Whether it's inflation, a dirty word, a pricey or oil, more expensive LNG. None of this sounds

like what consumers or politicians want to be dealing with. We heard from the US Energy Secretary

Chris Wright last night. He was on ABC News and was asked specifically about how long the energy

price shock could last. It's brief. It's very temporary. This is a 47-year-long conflict with Iran

that finally will come to an end in the next few weeks. We don't know the exact length,

but pretty temporary. Pretty temporary. Gargi Wright there also mentioned that the US could

potentially be escorting tankers through the state of Hormuz to protect energy flows.

We're seeing as well oil prices pulling back a little bit in Asian trading today.

The US Treasury Secretary overnight saying that refiners in India could get a waiver. They'd be

allowed to buy Russian oil for 30 days. I mean, maybe those steps over on one hand to ease the price

pressure could have an effect. But on the other side, we've been talking about all these global

disruptions. Way those against one another. Can we say with confidence any energy price shocks

here will be temporary? No, we definitely cannot say that. And indeed, the issue is that once you

start shutting down oil production or LNG production in the case of Qatar, it's not like there's a

switch where you just click and production is back on, exports are back on, the world market is back

as it was. Because when you shut down production, these wells take time to go back online. And in

the case of gas and in some oil wells, it could be weeks until they're fully back online. And that's

where the issue lies. So these disruptions are definitely going to be with us for a while.

It was journal foreign correspondent Giorgi Kachev. Giorgi, thanks for stopping by. I appreciate you.

Thank you. Coming up the US and Venezuela resume diplomatic relations. And we'll get the latest

on a push in Congress to tackle the rising price of beef. Those stories and the rest of the day's

news after the break.

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to discover unique creations and helping sellers connect with the people who love their work.

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The US and Venezuela are restarting diplomatic relations with state departments saying that

doing so would promote the country's economic recovery and encourage its peaceful transition

to democracy without providing further details. The move came as interior secretary Doug

Bergham visited Venezuela yesterday and called on investors to tap into the country's mining sector.

Venezuela may as home to vast deposits of gold, diamonds and coltan used in phones and electronics.

Senate Democrats have introduced a bill aimed at tackling record high beef prices,

a source of voter anger over food inflation ahead of November's midterms.

The legislation would scrutinize foreign-owned meat companies and prevent companies from processing

more than one type of meat, potentially forcing major processors to spin off their beef plants.

Journal Ag reporter Patrick Thomas told us the bill comes as ranchers face economic

headwinds and meat packers come under increasing political scrutiny.

For a number of years, ranchers have been shrinking the size of their herds.

There is low supply and people are obsessed with protein right now in their diets,

even as prices are high. It's fueling the price of cattle right now, which is making it more

expensive to purchase livestock. All of these meatpacking companies listed in this bill are losing

billions of dollars right now. This is also part of the Democrats push for affordability.

It also is on the heels of the Trump administration has made it a priority to try and bring down

beef prices. They've also talked about probing the meat packers with the Department of Justice

for any kind of anti-competitive behavior. Some Wall Street analysts have chimed in saying that

this doesn't really address the affordability issue that maybe they think it does.

But where things stand now is this kind of signals to the industry that the Democrats are taking

a big step and the big fear among the meatpacking companies is will the Republicans try and match

them, assuming they don't sign onto this and that this doesn't go anywhere? Will the Trump

administration feel like they need to respond? What kind of legislation will be brought forward

in the next year? It's Jobs Friday. The latest monthly snapshot of U.S. hiring data is

due at 8.30 a.m. Eastern and follows stronger than expected January numbers. Economists surveyed by

the journal expect to see 50,000 jobs added in February, a sharp drop compared to 130,000 the

prior month. Stock futures are a little changed ahead of the release.

And finally to Nepal now where vote counting is continuing in the country's first election,

since widespread Gen Z protests erupted back in September and forced out the Prime Minister.

The leading candidate is former rapper turned politician Alendra Shah aka Ballin.

Rapping was a side hustle for Ballin, who's politically charged songs in the wake of Nepal's deadly

2015 earthquake gained him a following. But by 2022 he was the mayor of Kathmandu and

journal reporter Krishna Pokhrao says the political phenom could now land the job of Prime Minister.

When he contested for Nepal's mere election in 2022, many of Nepal's older political parties

and their politicians didn't know about him and the young Nepalese, the generation she has

we call them, who protested in September and within two days later the toppling of the government,

they were effectively lobbying their parents who had long-running alloys to old parties to

elect him as the Kathmandu mayor. We heard it from many of these Gen Z supporters that Ballin's

support was our inspiration, that in him and his work as Kathmandu mayor we saw that politics

can be good, that politics can be a force for good. Should Ballin win office he'll have to contend

with a lagging economy. With per capita GDP of just $1,500 Nepal is highly dependent on remittances

in tourism and has little manufacturing, leaving an increasingly educated population still reliant

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

Hadi Moyer, our supervising producer, is Daniel Bach and I'm Luke Vargas for the Wall Street

Journal. We will be back tonight with a new show, otherwise have a great weekend and thanks for listening.

The spirit of innovation is deeply ingrained in America and Google is helping Americans innovate in

ways both big and small. Using Google AI, Etsy is making it easier for shoppers to discover

unique creations and helping sellers connect with the people who love them most. This is a new

era of American innovation. Learn more at g.co slash American innovation.