The Growing Middle East Conflict Risks Drawing in the U.S.’s NATO Allies

Ryan Knutson (0:00)

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Alex Ossola (0:22)

The conflict in the Middle East expands and the US shoots down an Iranian missile fired at NATO member Turkey. Plus, oil prices are up about 15% this week, but US drillers aren't rushing to pump more.

Benoît Morenne (0:34)

It's just too risky for them right now. Why would they bother to add a rig and change their plans when we don't know how long this crisis is going to go on for?

Alex Ossola (0:44)

And why record numbers of workers are pulling money out of their retirement accounts for emergencies. It's Wednesday, March 4th. I'm Alex Ossola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. This morning, the US sank an Iranian ship in the Indian Ocean, killing at least 87 people. Defense Secretary Pete Hegseth said it was the first time a US torpedo had sunk an enemy ship since World War II. Washington is determined to destroy Tehran's Navy and safeguard the flow of oil through the Persian Gulf. In a news conference at the Pentagon, Hegseth provided a new timeline for the duration of the war.

Pete Hegseth (1:28)

Iran cannot outlast us. We are going to ensure, through violence of action and our offensive capabilities and our defensive capabilities, as I said, that we set the tone and the tempo of this fight. And that's why we don't talk about, you know, you can save four weeks, but it could be six, it could be eight, it could be three. Ultimately, we set the pace and the tempo.

Alex Ossola (1:47)

The conflict risks drawing in NATO allies. Today the US also shot down an Iranian missile headed to a Turkish military base that hosts American forces. Iran had refrained from attacking Turkey until now. And in recent days, the UK and France have said that they would send additional warships to the region after an Iranian drone targeted a British military base in Cyprus. Meanwhile, on Capitol Hill, the Senate is voting today on a resolution over Trump's war powers. The push to stop the military operation against Iran is expected to fail, as most Republicans back the president. Senator Tim Kaine, a Democrat from Virginia who sponsored the resolution, spoke from the Senate floor ahead of the vote.

Tim Kaine (2:27)

And so here we are, in a war, that has cost American lives, that is leading to chaos throughout the region, that threatens to go bigger and bigger and bigger. And I'm asking the Senate to do what the framers of the Constitution said we should do, debate and vote about matters of war.

Alex Ossola (2:49)

Senator Mitch McConnell of Kentucky defended the president's decision to strike Iran and said presidential power to use military force without congressional approval was quote, well established. But he warned in a floor speech that there are risks involved and that Trump needs to explain his strategy to the American public. A vote on a similar measure in the House is expected tomorrow. As we've been covering on the show this week, the conflict in the Middle East has thrown the global oil market for a loop. Yesterday, the US oil benchmark settled below $75 a barrel, a level not seen since last June. And though global oil prices seem to have stabilized today, Goldman Sachs analysts predicted that global oil could shoot to $100 a barrel if the Strait of Hormuz is paralyzed for weeks. But Benoît Morenne, who covers the US oil and gas industry, says American drillers aren't rushing to boost their production. Benoît, why aren't American drillers jumping on this?

Benoît Morenne (3:43)

It's just too risky for them right now. Why would they bother to add a rig and change their plans when we don't know how long this crisis is going to go on for, right? So it just makes no sense for them to revisit billions of dollars in spending that they've laid out for 2026 to investors just a couple of weeks ago for some of those companies. They would be punished by investors if they made those changes based on just the last few days. There are indications that the US Navy might be providing protection to tankers. And President Trump has said that the US might be providing insurance to companies as well. So those companies are just waiting to see what happens.

Alex Ossola (4:23)