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- [00:00]
Narrator
Between tariffs, geopolitical shocks and everything else, 2026 has been a lot so far. The Dow Jones Risk Journal podcast delivers inside analysis from our expert newsroom to help you navigate the uncertainties of risk and regulation. With new episodes every Friday.
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Luke Vargas
Gulf energy production begins to wind down, risking a global supply shock.
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Georgi Kontchev
When you shut 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.
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Luke Vargas
Plus, the US Resumes diplomatic relations with Venezuela and we'll look at the rapper 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 Hegseth says the amount of firepower over Iran 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 plans to replenish U.S. 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 Khamenei, I asked Journal correspondent Suna Rasmussen where succession planning currently stands.
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Suna Rasmussen
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 leaders 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 you will have millions of people in the street. Is it beyond the US And Israel to strike funeral procession, 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.
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Luke Vargas
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?
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Suna Rasmussen
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's still what drives 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 in 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.
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Luke Vargas
Meanwhile, the war's economic ripple effects are becoming clear with each passing day, something that Journal foreign correspondent Georgy Kontchev has been tracking for us. Georgi, 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?
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Georgi Kontchev
Yeah, the issue is pretty important for the region because the Strait of Hormuz, which is this maritime choke point to which about a 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 ku, Bahrain, some of Saudi production, uae, they just can't export it. And 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.
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Luke Vargas
We've seen Iraq already, right. Cut production because they have no place to put it.
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Georgi Kontchev
Exactly, exactly. So Iraq already did that. There's other countries to watch. Kuwait, Saudi at some point might run out of storage too. 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. These are some of the biggest producers in the world. So if they start shutting down wells, that has a big impact on prices.
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Luke Vargas
And that would be a major reversal of kind of where the global oil market has been the last few years in a state of oversupply.
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Georgi Kontchev
When we started this year, all the forecasts by major banks and analysts were looking forward to oversupplied 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 at stake here. And of course, this thing has direct impact on oil prices around the world, on gas prices, the pump, inflation around the world. So this is really, really important.
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Luke Vargas
This obviously has an effect on the producer countries you've been talking about, a handful of whom 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. What 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?
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Georgi Kontchev
Yeah, Iran's economy remains kind of heavily dependent on oil exports. On petrochemicals, their biggest customer is China, where they send about 90% of their crude. Right now, they can't export most of it because of the Strait of Hormuz polarization. So ultimately Iran, which already before this conflict had this deep, deep economic crisis. They had huge inflation, double digits, inflation.
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Luke Vargas
It's one of the reasons why people were protesting earlier this year.
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Georgi Kontchev
Exactly. Earlier this year. Yeah. And. And now with this conflict severely 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 the global economy go through the uae. A lot of their assets are there. And now the UAE is considering reporting, is considering freezing those assets, which would basically sever one of the last links of Iran to the global economy.
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Luke Vargas
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.
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Georgi Kontchev
Absolutely, because natural gas is really crucial for industry. If natural gas is shut down in Qatar and across the region, if natural gas exports are Limited that has impact on prices and on industry 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 in Australia.
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Luke Vargas
Whether it's inflation, a dirty word, pricier 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 10. This is a 47 year long conflict with Iran that finally will come to
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Georgi Kontchev
an end in the next few weeks.
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Luke Vargas
We don't know the exact length, but pretty temporary. Pretty temporary. Ghegi right 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 U.S. 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. But on the other side, we've been talking about all these global disruptions, weigh those against one another. Can we say with confidence any energy price shocks here will be temporary?
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Georgi Kontchev
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. And that's where the issue lies. So these disruptions are definitely going to be with us for a while.
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Luke Vargas
That was Journal foreign correspondent Georgi Khonchev. Giorgi, thanks for stopping by. Appreciate you.
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Georgi Kontchev
Thank you.
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Luke Vargas
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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Narrator
Shifts in geopolitics, tariffs and regulation are rewriting the global playbook for international business. Every Friday on the Dow Jones Risk Journal podcast, our expert journalists and analysts take you inside the news, breaking down the hidden angles on the week's biggest developments, from sanctions and foreign policy shifts to cyber threats and supply chain disruptions. If you want clear insight into how power and policy are shaping global business risk? Follow the Dow Jones Risk Journal podcast wherever you listen.
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Luke Vargas
The US And Venezuela are restarting diplomatic relations with the State Department, 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 Burgum visited Venezuela yesterday and called on investors to tap into the country's mining sector. Venezuela is 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 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 meatpackers come under increasing political scrutiny.
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Patrick Thomas
For a number of years, ranchers have been shrinking the size of their herds, there is a 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. So actually all of these meatpacking companies listed in this bill are losing billions of dollars right now. This is also part of the Democrats push right now 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 on to 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?
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Luke Vargas
It's jobs Friday. The latest monthly snapshot of U.S. hiring data is due at 8:30am 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 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 Balendra Shah, AKA Balin. Rapping was a side hustle for Balin, whose 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 Pokhrail says the political phenom could now land the job of prime minister.
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Krishna Pokhrail
When he contested for Nepal's mirror election in 2022, many of Nepal's older political parties and the politicians didn't know about him and the young Nepalis, the generation, as we call them, who protested in September and within two days led to the toppling of the government. They were effectively lobbying their parents, who had long running loyalties to old parties, to elect him as the Kathleen mayor. We heard it from many of his Gen Z supporters that, you know, Balin's support was our inspiration, that in him and his work as cartoon mayor, we saw that politics can be good, that politics can be a force for good.
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Luke Vargas
Should Balin 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 and 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 Hattie Moyer. Our supervising producer is Daniel Bock, 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. Foreign.
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Krishna Pokhrail
Hey, this is Telus Demos and I'm Miriam Gottfried.
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Luke Vargas
We're reporters at the Wall Street Journal and The hosts of WSJ's take on the Week. It's a weekly show that gives listeners
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Krishna Pokhrail
a leg up in the world of markets and investing. From the Fed's moves to market bubbles, we dive into the biggest deals, key players and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to the Wall street journal.
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Luke Vargas
Visit subscribe.WSJ.com takeonth to subscribe now.