Good morning from the Financial Times.
Today is Monday, March 2nd, and this is a special edition of your FT News Briefing.
The US and Israel have launched their most vigorous attempt to overthrow the Islamic regime since it came to power in 1979.
That will have sweeping ramifications for the country, the wider Middle East and economies around the world.
Today, we're bringing you coverage from Washington to Tehran.
I'm Victoria Craig, and here's the news you need to start your day.
Over the past 72 hours, the US and Israel have pounded Iran with airstrikes.
Supreme Leader, Ayatollah Ali Khamenei, who ruled the country with an iron fist for nearly four decades, is dead.
Other senior leaders in the Iranian regime have also been killed in the strikes.
It's tense on the ground in Iran, and Najmeh Buzorgmir is our Tehran correspondent.
She explains.
People there feel as though they're standing at the threshold of a new and unpredictable chapter in their lives.
A wave of fear, anxiety and profound uncertainty has swept across the capital city Tehran, since Saturday, when US and Israeli strikes began.
The killing of Supreme Leader Ayatollah Ali Khamenei has satisfied his opponents while leaving his supporters in mourning.
Confusion is also deepening.
Residents fear the conflict might not end anytime soon.
People asking one another the same urgent question should they remain at home and follow the news or leave the city in search of safety?
Schools and universities are shut down in Tehran and shops are closed.
Only health centers, grocery stores and banks operate.
Highways leading out of Tehran are filled with traffic.
Those who chose to stay have stocked up on food and essential supplies.
They are bracing for uncertain days ahead.
That's the FT's Najmeh Buzorgmir reporting from the Iranian capital.
The strikes on Iran and Tehran's counterattacks will have widespread ramifications across the Middle East and reverberate around the world.
I'm joined now by Andrew England, our Middle East editor.
Hi, Andrew.
Hi.
And I'm also joined by Abigail Hauslohner, the FT's U.S. foreign affairs correspondent.
Hi to you, Abby.
Hi, Victoria.
So, Andrew, I want to start with you.
President Trump has strongly hinted that he wants regime change in Iran.
Do we know yet what that looks like?
I think he's looking for disillusioned Iranians to rise up and exploit this chaos.
The problem is no one knows what regime change would look like.
There's no organized, structured opposition inside Tehran.
There's no organized, structured opposition outside Tehran.
We don't know how far Trump...
If he does want to see regime change, what's he willing to do?
Most people think it could only happen if there were boots on the ground, and the sense is that Trump wouldn't put boots on the ground.
The regime is weakened, but it's still resilient.
Since Khamenei's death on Saturday morning, it's continued to fire missiles and drones across the region.
It's got the Revolutionary Guards of about 180000 troops, which is ideologically loyal to the regime.
And it has ideological base.
It's weakened.
It's wounded.
It's at its most vulnerable in decades.
But nobody yet is predicting that it's about to implode.
Abby, I want to bring you into this conversation because U.S.
President, Donald Trump late on Sunday said the military campaign against Iran is ongoing and he vowed that it would quote continue until all of our objectives are achieved.
Here he is speaking on a video posted to his social media network.
I call upon all Iranian patriots who yearn for freedom to seize this moment, to be brave, be bold, be heroic and take back your country.
America is with you.
I made a promise to you, and I fulfilled that promise.
The rest will be up to you, but we'll be there to help.
So Abby for a lot of people listening.
They're going to be wondering what is the president's plan from here?
Do we know?
Well, Trump hasn't provided much in the way of details.
It sounds like he is saying, I'm going to take out the regime.
And then you Iranian people come and make what you will of that and start a new government.
His surrogates on Capitol Hill have said that he has no intention of sending U.S. troops into Iran.
That makes a regime change, and particularly some sort of orderly transition really, really challenging.
If he has a plan, he hasn't revealed it.
And so his critics are saying that this could get really, really messy.
Yeah.
On terms of this question about longevity Andrew, we've seen Iran attack its own allies in the region and it got a sharp rebuke on Sunday from the UAE.
What does a prolonged conflict mean for the region and regional stability going forward?
Iran has a tense relationship with most of the countries in the region.
They have been seeking to de-escalate over recent years, both the Arab states and Iran.
But what we've seen is that Iran clearly sees it faces an existential moment.
It's in a battle for its very survival.
Iran's calculation is to survive and to endure and to ensure that The U.S. feels a cost.
The global economy feels a cost.
But from Iran's perspective, it only needs to get one missile through, two missiles through to cause damage, to cause fear, to cause disruption.
And that's how it calculates its successes.
Now the question is how long it can sustain this when it's being bombed so heavily by the US and Israel.
Abby.
I mean, given what we just heard from Andrew and his description of Iran's will to survive.
If we look to other examples of US-led attempts at regime change in the Middle East, are there lessons for President Trump and his administration there?
Yeah, I mean, in Libya, that's probably the closest parallel to this.
The US never sent forces into Libya as Libyans were rising up on their own against their dictator, Muammar Gaddafi.
President Obama figured that he could assist the rebels and NATO with their fight by imposing a no-fly zone and carrying out airstrikes on Qaddafi's forces.
Ultimately, the Libyans were able to overthrow Qaddafi, but the US there didn't do any follow-through.
There was no real follow-through on the ground to ensure that Libya had some sort of heavy assistance trying to transition from that anarchy into some sort of democracy.
And Libya is still paying the price today.
President Trump could easily look to those examples for both why arguably, the odds are stacked against him for an easy regime change success, but also how the turmoil has given rise to terrorist groups, economic upheaval and other negative consequences that do have ramifications for Americans and for people much further than those countries' borders.
And just to follow up to what Abby said, obviously the people who suffer most in these circumstances are the people in the countries.
If the regime does implode now in Iran and there is no clear or stable transition, then it will be the people Trump claims to be bringing freedom to who will ultimately suffer more than anybody else.
Still lots of questions that we'll be keeping close tabs on in the days ahead.
Abby Hauslohner, the FT's U.S.
Foreign Affairs Correspondent, and Andrew England, our Middle East editor.
Thanks so much to you both for your time.
Thank you.
Thank you.
Traders are expecting intense volatility in the oil market this week.
The main concern is about Iran's influence over the Strait of Hormuz.
It's a waterway that leads in and out of the Arabian Gulf, and it's a vital shipping lane where nearly 20 percent of the world's daily oil supplies pass through.
Over the last couple of days, transit has ground to a near standstill.
So to help dull any big spikes in oil prices, the OPEC Plus producer group pledged to boost next month's production by more than 200000 barrels a day.
I want to bring in Malcolm Moore.
He's the FT's energy editor to talk more about this.
Hi, Malcolm.
Hi there.
So how meaningful is this supply increase from OPEC Plus?
It's meaningful in that OPEC really wants to send a signal to the markets that if it needs to produce more oil, it will produce more oil.
It's not meaningful in terms of the actual number of barrels.
We were expecting OPEC to increase production by about 137,000 to 140,000 barrels a day.
So an extra 60,000 barrels is neither here nor there.
But it sends an important signal to the market that OPEC is ready.
It's monitoring.
If it sees oil prices rising, then it can raise production again.
And what OPEC is doing is it's keeping its powder dry because it doesn't have a huge amount of extra oil production that it can quickly bring on tap.
So it doesn't want to give it all in one go.
It wants to wait and see and then feed more into the market as it needs it.
Does it seem like there will be long-term disruption to access the Strait of Hormuz, or what is the situation there right now?
How fluid is it?
What we've seen so far has not been hugely optimistic.
People are concerned that insurance companies have basically said look, we are not sure how to price the risk of moving through the Strait of Hormuz at the moment.
It's going to be a lot more expensive.
We may pull insurance from some ships.
And if they start to do that, really nobody can send any ships anywhere.
And on Sunday, we saw a number of significant things.
Two ships were hit.
When we start seeing ships being hit in this region then obviously shippers start to pull their ships back.
People are just waiting to see what happens next.
Finally Malcolm, what impact would these potentially huge rises in the oil price mean for the global economy?
If we see the same sort of escalation that we've seen in the last couple of days, continue.
People are talking about oil north of 100 a barrel.
I mean, huge rises in the oil price is going to have a significant impact on inflation everywhere.
But in the US there are some analysts saying that it's going to push inflation up from 24 to above 4.
Very significant inflation consequences.
And so I'm sure the US is coordinating with everybody to try and ensure that that doesn't happen.
We're into very unpredictable territory now.
It's unclear what the Iranians are going to do from here on in.
And it's also very unclear how long traffic through that Strait of Hormuz remains subdued.
Lots to keep our eyes focused on in the days and weeks ahead.
Malcolm Moore, the FT's energy editor.
Thanks so much for your time.
Thanks.
As always, you can read more on all of our coverage about the strikes in Iran and all of the stories in today's podcast for free when you click the links in our show notes.
This has been a special edition of your daily FT News briefing.
Be sure to check back tomorrow for the latest business news.
