iran war

Hegseth faces bipartisan grilling about weapons drawdown during the Iran war

Defense Secretary Pete Hegseth faced tough questions Tuesday from Republican and Democratic lawmakers about the Trump administration’s end game for the Iran war, the cost of the conflict and its impact on diminishing U.S. weapons stockpiles.

For his part, the Pentagon chief softened his tone from hearings before Congress nearly two weeks ago, notably avoiding the same pointed criticism of lawmakers in his opening remarks as he outlined the Trump administration’s efforts to ramp up production of weapons and other military capabilities.

Even so, Hegseth insisted that the military has plenty of missile defense systems and other munitions for the Iran war or future conflicts as both Republicans and Democrats hammered him with those concerns.

“I take issue with the characterization that munitions are depleted in a public forum,” Hegseth said. “That’s not true.”

The cost of the Iran war has risen to about $29 billion, the vast bulk of which — $24 billion — is related to replacing and repairing munitions but also includes operational costs to keep forces deployed, Pentagon comptroller Jay Hurst said. That’s up from $25 billion that he told lawmakers nearly two weeks ago.

The powerful House and Senate Appropriations subcommittees that oversee defense spending are holding back-to-back hearings to review the Trump administration’s 2027 military budget proposal, which calls for a historic allocation of $1.5 trillion. The discussions in the House quickly veered into the handling of a war that appears locked in a stalemate as higher fuel prices pose political problems for Republicans in the midterm congressional elections.

Hegseth and Caine face bipartisan pushback on munitions stockpiles

Rep. Rosa DeLauro, the ranking Democrat on the House Appropriations Committee, told Hegseth that the “question must be answered at the end of this crisis: What have we accomplished and at what cost?”

“This administration has not presented Congress with any kind of clear or coherent strategy week to week, day to day, hour to hour,” DeLauro said. “The rationale shifts, the objectives change. The end game is ill-defined when it is defined at all.”

California Republican Rep. Ken Calvert, the House subcommittee’s chair, also asked about the impact of the Iran war on military funding as well as the U.S. military’s weapons stockpiles.

“Questions persist about whether we are building the depth and reliance required for a high-end conflict,” Calvert said.

Minnesota Rep. Betty McCollum, the defense subcommittee’s ranking Democrat, pressed Hegseth on whether the military has a plan to draw down troops in the Middle East if Congress passes so-far-unsuccessful efforts to end the Iran war.

“We have a plan to escalate if necessary,” Hegseth said. “We have a plan to retrograde if necessary. We have a plan to shift assets.”

He said he would not reveal any next steps publicly. Noting repeated questions from lawmakers over the military’s weapons stockpiles, drawn down from the Iran war, Hegseth said the concerns have been “unhelpfully overstated” and that “we have plenty of what we need.”

He said the defense industry has been told to “build more and build faster,” blaming the military industrial base’s inadequate capacity on previous administrations and U.S. aid to Ukraine in its war with Russia.

Trump administration faces pressure from impact of the Iran war

President Trump is facing increasing pressure from the economic shocks of Iran effectively closing the Strait of Hormuz, a vital shipping corridor where 20% of the world’s oil normally flows. The U.S. military in turn has blockaded Iranian ports and the two sides have traded fire, with American forces thwarting attacks on their warships and disabling Tehran-linked oil tankers.

Trump said Monday that the ceasefire is on “massive life support” and criticized Iran for its latest proposal, pointing to his demands that Iran significantly limit its nuclear program.

“I would call it the weakest right now after reading that piece of garbage they sent us,” Trump said.

The Republican president also said he wanted to suspend the federal gas tax to help Americans shoulder surging fuel prices. He has previously said higher costs are worth it to prevent Iran from getting a nuclear weapon.

Tuesday’s hearings are giving a mostly new group of lawmakers the chance to grill or applaud Hegseth and Gen. Dan Caine, chair of the Joint Chiefs of Staff, on the planning and execution of the war.

The Senate hearing later Tuesday will include Sen. Susan Collins of Maine, a Republican whose reelection this year is far from guaranteed. She voted with Democrats on an effort to halt the conflict late last month, saying she wants to see a defined strategy for bringing the war to a close.

Alaska Sen. Lisa Murkowski, another Republican on the Senate Appropriations defense subcommittee, has voted against the string of unsuccessful war powers resolutions but spoken of the need for congressional authorization so Americans will know the war’s limits and objectives.

He also will face plenty of friendly Republicans, including the Senate subcommittee’s chair, Sen. Mitch McConnell of Kentucky, and perhaps the Iran war’s biggest booster in Congress, Sen. Lindsey Graham of South Carolina.

Finley, Toropin and Barrow write for the Associated Press. Barrow reported from Atlanta.

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Oregon Democrats found a way to improve roads. Now their gas tax goes before voters as prices soar

Appealing to voters’ anxieties about the soaring cost of living is central to Democrats’ messaging in their hopes of big wins in this year’s midterm elections. In Oregon, a question on the primary ballot is complicating that strategy.

The Democratic-controlled Legislature raised the state gas tax and a range of fees last fall as a way to pay for road improvements and plug a hole in the state’s transportation budget. Republicans responded with a petition to repeal the increases, leading to a referendum that will land before voters just as the Iran war is causing the price of gas to skyrocket around the United States.

“It is a hell of a time to be raising gas taxes on people,” said Jeanine Holly, filling up her tank on a recent morning in Portland.

The gas tax repeal on the state’s May 19 primary ballot comes amid widespread disruptions in the oil industry from the war with Iran started by Israel and President Trump. Discontent is high among U.S. consumers across the political spectrum, with the price of gas topping $4.50 a gallon nationally on Friday and averaging about 80 cents more per gallon in Oregon.

The referendum will give voters a chance to weigh in on a hot-button issue hitting them directly in the pocketbook at a time when prices remain elevated for everything from housing to groceries. Nationally, Democrats have focused on the affordability concerns similar to those that helped propel Trump to victory in 2024. Some of their candidates have even proposed ways to cut taxes as a way to promote their agenda and counter a traditional GOP strategy.

“It’s difficult to imagine a worse situation for … a gas tax increase than right now in American politics,” said Chris Koski, professor of political science and environmental studies at Portland’s Reed College.

Republicans sense an opportunity

Republicans wasted no time in appealing to voters after the Legislature and Democratic governor signed off on the tax increase, which also included a higher payroll tax for transit projects and a boost in vehicle registration and title fees.

They needed 78,000 voter signatures to qualify the referendum for the ballot. They quickly got 250,000.

“That is a remarkable number,” Republican strategist Rebecca Tweed said.

Republicans in Oregon have countered Democrats’ affordability messaging by portraying the tax and fee increases as further fueling the high cost of living.

“Do Oregonians want to pay more? The answer is no,” said GOP state Sen. Bruce Starr, who helped lead the referendum campaign. “Everything they’re looking at is expensive.”

Under the legislation, Oregon’s gas tax would rise from 40 cents to 46 cents a gallon. That would make it tied with Maryland for the eighth-highest gas tax of any state when factoring in other state taxes and fees, according to figures from the U.S. Energy Information Administration.

At the Portland gas station, Michael Burch said he used to spend $70 to fill three-quarters of his pickup truck’s tank, but now pays $80 for just over half a tank.

“I’m sick and tired of taxes,” the 76-year-old retiree said. “Gas is certainly dampening the spirits and the coffers of folks that aren’t as well off.”

Hannah Coe, a 30-year-old student, said she was not sure how she would vote on the primary ballot referendum.

“I think I would be in favor of it if it was going to go to the things that it was saying it was going to go to, such as fixing our roads,” she said. “I also kind of feel like that’s just a grab at trying to get more money from the people who live here.”

Democrats blame the Iran war

Oregon Democrats spent much of last year fighting to pass a transportation funding bill to help raise money for services such as road paving and snow plowing. The debate came amid projections of declining gas tax revenue as more people adopt electric, hybrid and fuel-efficient cars.

They finally passed a narrower version of their plan during a special session called by Gov. Tina Kotek.

She recently acknowledged the challenging timing of the referendum.

“Certainly, the conversation at the ballot this year … is a tough sell right now, because I think everyone is feeling a pinch on their household budgets,” she told reporters.

But she and other Democrats said the root cause of the jump in gas prices is Trump’s decision to go to war with Iran. She suggested the federal government consider reducing the federal 18-cent-a-gallon gas tax if it wants to provide relief at the pump for Americans.

Some Oregonians are receptive to the Democrats’ reason for passing the legislation last year. Kurt Borneman, 68, said he would support the gas tax increase, even though he’s now paying at least $10 more to fill up his tank.

“I realize that money’s tight and roads need to be improved,” he said at the Portland gas station. “I want less government, but I also want nice roads.”

Democratic state Rep. Paul Evans said his party lost the battle over how to frame the gas tax increase to the public. So far, there has been no organized effort from Democrats and their allies to oppose the ballot referendum.

“When anything is reduced to, ‘Do you want a tax or not?’ Most people are going to say no,” he said. “The messaging got away from us, and it became focused upon the price instead of the value.”

Rush writes for the Associated Press.

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Rubio presses Europe on Iran action as he seeks to mend ties with Italy and Vatican

U.S. Secretary of State Marco Rubio urged European allies Friday to move beyond rhetoric and take concrete action against Iran, even as he sought to repair strained ties with Italy and the Vatican during a two-day visit following tensions over the U.S.-Israeli war in Iran.

Speaking after meetings with Premier Giorgia Meloni and Foreign Minister Antonio Tajani, Rubio warned that Tehran was attempting to assert control over the strategic Strait of Hormuz, calling the move “unacceptable” and a threat to global security.

“Everybody says Iran is a threat. Everybody says that Iran can’t have a nuclear weapon … but you’ve got to do something about it,” Rubio told reporters in Rome. “If the answer is no … then you better have something more than just strongly worded statements to back it up.”

Clear ‘red line’

Rubio said Iran was trying to normalize control over an international waterway, a precedent he warned could encourage similar actions elsewhere. He also cautioned Tehran against targeting U.S. maritime assets, saying the United States had thwarted attacks on three Navy ships in the strait.

“The red line is clear. They threaten Americans, they are going to be blown up,” he said.

Rubio said Washington was pursuing a diplomatic track, including a proposed U.N. Security Council resolution aimed at preserving freedom of navigation. He added the U.S. was awaiting Iran’s response on Friday to ongoing diplomatic efforts.

Rubio’s visit comes after weeks of sharp disagreements between Washington and Rome over the Iran war, tariffs and President Trump’s criticism of both Meloni and Pope Leo XIV.

Differences remain over Iran war

Meloni described her meeting with Rubio as “constructive, frank and productive,” focused on both bilateral relations and major international issues. She said the talks covered strategic topics, including the Middle East, freedom of navigation in the Strait of Hormuz, Ukraine, China and areas of Italian interest such as Libya and Lebanon.

“We both understand how important the trans-Atlantic relationship is, but we also understand that each country must defend its own national interests,” Meloni stressed after the meeting.

Tajani struck a more conciliatory tone after meeting his U.S. counterpart, reaffirming the importance of the trans-Atlantic alliance.

“I am convinced Europe needs America — Italy needs America — and the United States also needs Europe and Italy,” Tajani said, adding he hoped “tensions have been calmed.”

He said discussions covered the Iran conflict and its spillover into Lebanon, as well as Venezuela and Cuba. The U.S. State Department said Rubio also raised the need to protect economic interests and end the war in Ukraine.

Despite the effort to ease tensions, differences remain over the Iran conflict. Italy has opposed the U.S.-Israeli bombing campaign, with Meloni calling it “illegal,” and has resisted involvement in offensive operations.

Tajani said Italy would be prepared to contribute naval forces to demine the Strait of Hormuz once a permanent ceasefire is reached, and would maintain its role in the U.N. peacekeeping mission in Lebanon. He also stressed the importance of continued U.S. troop presence in Europe amid concerns about possible reductions.

No final decision on NATO troops adjustments

Rubio said “no final decision” had been made on NATO troop adjustments, noting that any changes would depend on U.S. national interests and global priorities.

The U.S. has announced a decision to pull 5,000 military personnel from Germany and Trump has threatened to withdraw more troops from Italy and Spain over their stance on the war.

Italy, a key logistics hub for U.S. and allied operations in the Mediterranean and beyond, has already signaled limits to its cooperation. In March, it declined to allow U.S. bombers bound for the Middle East to use a base in Sicily without parliamentary approval, reflecting constitutional constraints and strong domestic opposition to the war.

Meloni, weakened by a recent referendum defeat and facing public unease over the conflict, has insisted that any use of Italian bases for offensive operations would require parliamentary backing.

The war has also raised economic concerns in Italy, with Meloni warning that disruptions in the Strait of Hormuz risk driving up energy costs and inflation, while U.S. tariff threats weigh on the country’s export-driven economy.

An attempt to de-escalate at the Vatican

Rubio also sought to ease tensions with the Vatican following Trump’s criticism of the pope’s calls for peace. After a lengthy meeting on Thursday with the pontiff and Vatican Secretary of State Cardinal Pietro Parolin, Rubio said Washington remained committed to a “productive and fruitful” relationship with the Catholic Church.

“The president’s perspective is clear. He thinks that Iran is a threat, and it needs to be addressed. And that position remains unchanged,” Rubio said.

Rubio confirmed that Cuba was also discussed at the Vatican, with Washington hoping the church’s Caritas charity organization would continue distributing humanitarian aid.

Rubio said the U.S. has provided about $6 million in humanitarian aid to Cuba, to be distributed through Caritas, should the Cubans allow it. He added Washington has also offered up to $100 million in additional aid, but the Cuban government has not accepted it so far. Rubio blamed Cuba’s government for blocking assistance and worsening conditions, describing it as “incompetent.”

U.S. officials said the Vatican talks underscored strong bilateral ties and a shared commitment to promoting peace, even as differences over the Iran war persist.

Zampano and Winfield write for the Associated Press.

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Vatican and State Department stress solid ties after Rubio’s fence-mending visit over Trump attacks

The Vatican raised the “need to work tirelessly in favor of peace” in talks Thursday with U.S. Secretary of State Marco Rubio, who came to Rome on a fence-mending visit after President Trump’s criticisms of Pope Leo XIV over the Iran war.

Both the Vatican and the U.S. State Department stressed that Rubio’s meetings with Leo and the Vatican’s top diplomat underscored strong bilateral ties. Those relations, though, have been strained over Trump’s repeated broadsides about Leo’s calls for peace and dialogue to end the U.S.-Israeli war.

Rubio, a practicing Catholic, has often been called on to tone down or explain Trump’s harsh rhetoric. He had an audience first with Leo, which was complicated at the last minute by Trump’s latest criticism of the Chicago-born pope. During a 2½-hour visit, Rubio then met with the Vatican secretary of state, Cardinal Pietro Parolin, who on the eve of his visit had strongly defended Leo and criticized Trump’s attacks.

“Attacking him like that or criticizing what he does seems a bit strange to me, to say the least,” Parolin said Wednesday.

After the meetings, the U.S. State Department said that Rubio and Parolin discussed “ongoing humanitarian efforts in the Western Hemisphere and efforts to achieve a durable peace in the Middle East. The discussion reflected the enduring partnership between the United States and the Holy See in advancing religious freedom.”

In a separate statement about the audience with Leo, U.S. State Department spokesperson Tommy Pigott said that the two discussed the situation in the Middle East and the Western Hemisphere. “The meeting underscored the strong relationship between the United States and the Holy See and their shared commitment to promoting peace and human dignity,” he said.

The Vatican, for its part, said that during Rubio’s meetings with both Leo and Parolin, “the shared commitment to fostering good bilateral relations between the Holy See and the United States of America was reaffirmed.”

It said the two sides exchanged views on the current events “with particular attention to countries marked by war, political tensions, and difficult humanitarian situations, as well as on the need to work tirelessly in favor of peace.”

Rubio also has meetings Friday with Italian Premier Giorgia Meloni and Foreign Minister Antonio Tajani. Those meetings might not be much easier for Washington’s top diplomat, given both have strongly defended Leo against Trump’s attacks and have criticized the Iran war as illegal — drawing the president’s ire.

A mission to smooth ties

The tensions began when Trump lashed out at Leo on social media last month, saying the pope was soft on crime and terrorism for comments about the administration’s immigration policies and deportations as well as the Iran war. Leo then said that God doesn’t listen to the prayers of those who wage war.

Later, Trump posted a social media image appearing to liken himself to Jesus Christ, which was deleted after a backlash. He has refused to apologize to Leo and has sought to explain away the post by saying that he thought the image was a representation of him as a doctor.

Rubio said that Trump’s recent criticisms of Leo were rooted in his opposition to Iran potentially obtaining a nuclear weapon, which he said could be used against millions of Catholics and other Christians.

Leo has never said Iran should obtain nuclear weapons and that the Catholic Church “for years has spoken out against all nuclear weapons, so there is no doubt there.”

“The mission of the church is to preach the Gospel, to preach peace. If someone wants to criticize me for announcing the Gospel, let him do it with the truth,” Leo said late Tuesday, after Trump again accused him of being “OK” with Iran having a nuclear weapon.

By Thursday, tensions seemed to have eased.

Rubio gave Leo a small crystal football paperweight. He acknowledged Leo’s known allegiance to the Chicago White Sox, saying “you’re a baseball guy,” but noted that the football had the seal of the State Department on it.

“What to get someone who has everything?” Rubio joked as he gave Leo the paperweight.

Leo, for his part, gave Rubio a pen apparently made of olive wood — “olive being of course the plant of peace,” Leo said — with his coat of arms on it and a picture book of Vatican artworks.

Trump also has criticized Meloni and other NATO allies for a lack of support for the Iran war, recently announcing plans to withdraw thousands of American troops from Germany in the coming months.

Vatican seen as willing to have dialogue

Giampiero Gramaglia, former head of the ANSA news agency and its onetime Washington correspondent, said that he didn’t expect much to come out of Rubio’s visit for Italian or Vatican relations. He, and other Italian commentators, believe Rubio instead was looking to smooth over relations with the pope for his own political ambitions, as well as the upcoming midterm U.S. congressional elections and 2028 presidential race.

“I doubt Rubio has the role of conciliator for Trump,” he told Italy’s Foreign Press Association. “I have the perception that Rubio’s mission is more about himself” and his political ambitions as a prominent Catholic Republican.

The Rev. Antonio Spadaro, undersecretary in the Vatican’s culture office, said that Rubio’s mission wasn’t to “convert” the pope to Trump’s side. Rather, Washington “has come to acknowledge — implicitly but legibly — that (Leo’s) voice carries weight in the world that cannot simply be dismissed.”

“The situation created by President Trump’s remarks required a high-level, direct intervention, conducted in the proper language of diplomacy: a semantic corrective to a narrative of frontal conflict with the church,” he wrote in an essay this week.

Cuba is also on the agenda

Rubio said that topics other than the Iran war were on the agenda for the Vatican visit, including Cuba. The Holy See is particularly concerned about the Trump administration’s threats of potential military action there following its January ouster of Venezuelan President Nicolás Maduro.

Trump has said frequently that Cuba could be “next,” and even suggested that once the Iran war is over, naval assets deployed in the Middle East could return to the United States by way of Cuba.

Rubio is the son of Cuban immigrants and a longtime Cuba hawk.

“We gave Cuba $6 million of humanitarian aid, but obviously they won’t let us distribute it,” Rubio said. “We distributed it through the church. We’d like to do more.”

Winfield and Lee write for the Associated Press. Lee reported from Washington.

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Lufthansa posts record revenue but warns Iran war fuel costs will hit annual profit

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The surge in jet fuel prices has become a primary concern for the European travel industry, with Lufthansa finding itself at the centre of this crisis.


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According to Lufthansa’s latest earnings report, the airline expects an additional €1.7 billion ($2bn) fuel cost burden in 2026 as soaring jet fuel prices continue to weigh on the industry.

The need to avoid certain airspaces has led to longer flight times, which naturally increases consumption. These adjusted routes also require more staff hours and higher maintenance cycles, adding layers of complexity to an already strained global supply chain.

As reported by Euronews, global airlines have already cancelled approximately 13,000 flights this May, while Lufthansa alone has axed 20,000 short-haul flights through to October in a bid to cut fuel consumption.

This reduction in capacity is a direct response to the unsustainable cost of operating older, less fuel-efficient aircraft during price peaks.

While Lufthansa has managed to stay profitable, the jet fuel price spikes have forced the firm to advise passengers to book their holidays as early as possible to avoid further surcharges.

The company is currently investing heavily in its “fleet modernisation” programme to mitigate these risks in the long term, though the immediate impact of fuel volatility continues to weigh on the balance sheet.

Lufthansa remains committed to its financial targets, but the volatility of the global oil market remains the largest variable in its 2026 outlook.

“We are satisfied with the first quarter […] at the same time, the current situation compels us to rigorously examine every lever available to reduce costs, improve efficiency and mitigate risks in order to maintain our ability to act decisively. Our annual profit will likely be lower than originally anticipated,” CFO Till Streichert stated.

The Lufthansa Group has announced a landmark financial performance, revealing that it generated the highest revenue in its history in 2025. Revenue rose by 5% compared with the previous year to €39.6 billion.

According to the latest figures, the airline group also saw its operating profit grow by 20% compared with 2024, highlighting a robust recovery in passenger demand.

In the first quarter of 2026, year-on-year revenue climbed 8% despite challenges linked to the conflict involving Iran, including €1.7 billion in additional costs caused by volatile jet fuel prices and the suspension of dozens of routes.

The firm kept its capacity broadly stable with slight growth in long-haul traffic compensating for capacity reductions in short and medium-haul segments.

Lufthansa Technik and Lufthansa Cargo also significantly contributed to earnings with demand for maintenance, repair and overhaul services increasing, as well as through the marketing of ITA Airways’ cargo space.

Global demand for air travel remains high and continues to prove resilient even in times of crisis, as Lufthansa Group again expects a strong summer travel season.

“In the first quarter, we significantly improved on the previous year’s financial results […] but the ongoing crisis in the Middle East, combined with rising fuel costs and operational constraints, poses enormous challenges for the world as a whole, for global air travel and for our company as well,” CEO Carsten Spohr stated.

“However, we are resilient in our ability to absorb these impacts. This applies both to our above-average hedging against fuel price fluctuations and to our multi-hub, multi-airline strategy, which provides us with greater flexibility in our route network and fleet development,” Spohr added.

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Broken Spirit: Jet Fuel Surge, Iran War Rattle Airlines

Amid Spirit Airlines’ bankruptcy, airlines that were once confident in their financial resilience are now navigating a volatile geopolitical landscape.

The collapse of Spirit Airlines, the scrappy low-cost carrier, underscores the fragile economics of air travel amid $4-per-gallon jet fuel and high crude prices.

From Atlanta-based Delta Air Lines to Hong Kong-based Cathay Pacific, carriers are reassessing routes and fares as soaring fuel costs threaten profits, while the Iran war disrupts shipping through the Strait of Hormuz.

Airlines and investors had anticipated stable fuel costs in the second quarter, but analysts have had to adjust their outlooks. Forward-looking projections indicate fuel prices will remain above previous forecasts, a development that could continue to pressure airline profit margins and ticket pricing strategies.

“Fuel forward expectations for the second quarter haven’t changed, but what has changed are expectations for the rest of the year,” Matt Woodruff, head of aerospace and defense/transports at CreditSights, told Global Finance. “[Fuel prices] will be higher for longer than we were thinking a month or two ago.”

‘Good Aircraft’ Grounded

On April 23, former President Donald Trump publicly mused about rescuing Spirit Airlines, calling the carrier “virtually debt-free” and noting its “good aircraft, good assets.” He suggested buying the airline and potentially profiting when oil prices decline, adding, “I’d love to be able to save those jobs … I like having a lot of airlines, so it’s competitive.”

The plan never materialized, and Spirit shut down on May 3. Travelers remained stranded as jet fuel prices hit unprecedented highs amid the Iran war, now more than two months old.

“We regret to inform you that all Spirit Airlines flights have been canceled, effective immediately,” read a notice when opening the carrier’s app.

The ripple effects were felt beyond Dania Beach, Florida, where the airline is based. Spirit operated international flights throughout Latin America, the Caribbean, and Central America, including Colombia, Mexico, the Dominican Republic, Jamaica, Peru, Costa Rica, and Aruba. Its sudden closure left 17,000 direct and indirect employees without work.

The Trump administration and Treasury Secretary Scott Bessent quickly blamed Biden-era opposition to the much-debated Spirit/JetBlue Airways Corp. merger. The two carriers had a $3.8 billion deal in the works, which Bessent argued “would have given them much more resiliency.” Spirit filed for bankruptcy protection in November 2024, saddled with more than $2.5 billion in losses since 2020.

But no airline, not even one with low-cost appeal, is immune to the whims of the global oil market.

At the time of Spirit’s first bankruptcy under Biden, U.S. airlines were paying an average of $2.31 per gallon for jet fuel. Under Trump, that figure has nearly doubled, with the Argus US Jet Fuel Index reporting $4.26 per gallon as of May 4.

Consider the Warnings

Brent crude prices are hovering above $100 per barrel, while regional conflicts near the Strait of Hormuz—through which a significant share of the world’s oil passes—continue to heighten supply concerns.

Fuel is often the largest single operating expense for airlines. Delta Air Lines, for example, disclosed in a March filing that its 2025 fuel costs accounted for 31.3% of its operating expenses. The company noted that a one-cent increase in jet fuel adds about $40 million to its fuel tab for the year.

Delta paid $2.7 billion for fuel in the first quarter of 2026.

The airline produces some of its own jet fuel, which means it avoids paying full market prices for fuel conversion, shielding it from the worst of the “crack spread” costs, Woodruff said. “They’re getting a benefit relative to everyone else, but they’re still feeling it.”

Cuts are underway. Starting May 19, the company will no longer offer food or drinks on flights under 349 miles.

Other carriers are responding to the latest volatility by raising fares, canceling routes, rerouting aircraft to avoid restricted airspace, and reconsidering expansion plans. Airfares have increased five times since the war in Iran began, with a sixth hike underway late last month, according to the Wall Street Journal.

“The routes that aren’t doing well, those are going first,” Woodruff said. “Regional jets, for example, often don’t make much money — those are, for sure, a target.”

What’s Next

Spirit isn’t the only airline feeling the effects of this new norm. Its former suitor, JetBlue, is reevaluating routes that may no longer cover rising fuel, airport, and maintenance costs. Delta is canceling hundreds of flights, while international carriers — including Paris-based Air France, Cologne-based Lufthansa, and Cathay Pacific — are trimming routes to protect margins.

This shift stands in stark contrast to late 2024, when Delta CEO Ed Bastian welcomed the incoming Trump administration as a “breath of fresh air.” Through much of 2025, that optimism seemed justified, as major U.S. carriers forecast continued profitability into 2026.

And that might still be the case despite the war in Iran rattling global energy markets and upending long-held assumptions about fuel stability and travel demand.

Each airline is now telling a two-sided story about how robust demand is while also raising fares. United Airlines’ fare numbers, for example, will be 15% to 20% higher than last year. 

Whether consumers will tolerate such a price hike remains to be seen. “Ultimately, consumers are going to decide what they are willing to pay and what they aren’t, not a formula,” Southwest CEO Bob Jordan told reporters in April.

Chevron CEO Mike Wirth echoed the concern, telling CBS’s Face the Nation on April 23 that instability in the Strait of Hormuz was likely to continue driving up energy costs.

Even the forward fuel curves today indicate that, even if the war ended today, costs wouldn’t normalize until well into next year, Woodruff said.

By 2027, airlines expect to offset most, if not all, of the recent fuel cost increases through higher fares, he added. But that outlook assumes forward fuel prices in the first quarter of 2027 will be lower than they are today. If they’re not, carriers could continue to face significant financial pressure.

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Hegseth’s Day 2 clash with Democrats in Congress over Iran war

Defense Secretary Pete Hegseth clashed with Democratic lawmakers in Congress for a second day Thursday, rejecting senators’ accusations that the Iran war was launched without evidence of an imminent threat and waged with no coherent strategy.

The three-hour hearing of the Senate Armed Services Committee mostly traced the well-worn positions of Republicans and Democrats on the conflict, Hegseth’s leadership and the ways in which President Trump has used the American military.

In his opening statements, Hegseth called Democratic lawmakers “reckless naysayers” and “defeatists from the cheap seats” who have failed to recognize the many successes of the U.S. military against the Islamic Republic.

Hegseth said Trump has had the courage “unlike other presidents to ensure that Iran never gets a nuclear weapon and that their nuclear blackmail never succeeds. We have the best negotiator in the world driving a great deal.”

Democrats peppered Hegseth with questions about his efforts to remake military culture, U.S. support for Ukraine and whether Trump would seek congressional approval for the war. The Defense secretary said the ceasefire postpones the deadline for securing such approval.

Hegseth seemed to emerge with solid Republican support, though a few GOP senators asked about the dismissal of a top Army general and sought assurances that the Pentagon is doing everything possible to prevent civilian deaths.

The hearing was convened to discuss the Trump administration’s 2027 military budget proposal, which would boost defense spending to a historic $1.5 trillion. Hegseth and the chairman of the Joint Chiefs of Staff, Gen. Dan Caine, emphasized the need for more drones, missile defense systems and warships.

Top Democrat argues that war has left U.S. in worse position

Sen. Jack Reed, the committee’s ranking Democrat, argued that the war has left the U.S. in a worse strategic position, with 13 American troops killed, more than 400 injured and equipment destroyed.

The Strait of Hormuz remains closed, sending fuel prices skyrocketing, Reed said. Iran still has enriched uranium and retains enough combat effectiveness to keep the conflict locked in an impasse, while Iran’s hard-line government is still in charge.

“I am concerned that you have been telling the president what he wants to hear instead of what he needs to hear,” Reed said. “Bold assurances of success are a disservice to both the commander in chief and the troops who risked their lives based on them.”

Reed also lambasted Hegseth for his firing of top military leaders and suggested the Defense secretary had failed to recognize the accomplishments of women and people of color in the military. Reed noted that 60% of about two dozen officers fired by Hegseth have been female or Black.

Hegseth said that any firing is based on performance and that previous Pentagon leaders “were focused on social engineering, race and gender in ways that we think were unhealthy for the department.”

Republican chairman offers warmer welcome

Hegseth received a warmer welcome from Sen. Roger Wicker, the Republican chairman of the committee, and other GOP lawmakers. Wicker kicked off the hearing by noting that the U.S. is in the most dangerous security environment since World War II.

Through the war against Iran, Trump “has worked to remove the regime’s conventional military capabilities and force it back to the table for a permanent solution,” Wicker said.

He also commended the budget proposal for 2027, saying it “is chock-full of important programs and initiatives that are absolutely necessary to secure American interest in the 21st century.”

Sen. Deb Fischer, a Republican from Nebraska, praised Hegseth’s statement on the need for nuclear deterrence as well as the development of Trump’s Golden Dome missile defense program.

“For years, this committee has known that we must improve our ability to defend our homeland against a wider variety of threats,” Fischer said.

Sen. Tom Cotton, an Arkansas Republican, asked Hegseth whether he ever lied to Trump, pushing back against Reed’s claim that Hegseth tells the president what he wants to hear.

“I only tell the truth to the president,” Hegseth said.

Questions about civilian deaths

Senators also focused on civilian deaths in the Iran war and the Pentagon decision to hollow out a congressionally mandated office set up specifically to reduce civilian casualties.

The Associated Press has reported that growing evidence points to U.S. culpability for a deadly strike on an Iranian elementary school adjacent to a Revolutionary Guard base that killed more than 165 people, including children.

Democratic Sen. Kirsten Gillibrand of New York asked Hegseth, “What is your response to targeting that has resulted in the destruction of schools, hospitals, civilian places? Why did you cut by 90% the division that’s supposed to help you not target civilians?”

Hegseth responded that the Pentagon has an “ironclad commitment” to do more than other countries to prevent civilian deaths.

A day earlier, he battled with Democrats during a nearly six-hour House Armed Services Committee hearing, where he faced sharp questioning over the war’s costs in dollars, lives and diminishing stockpiles of crucial weapons.

Hegseth said Wednesday that the strike on the Iranian school remains under investigation.

War powers resolutions fail to pass

Democrats have called the conflict a costly war of choice that lacks congressional approval or oversight. But they have failed to pass multiple war powers resolutions that would have required Trump to halt the conflict until Congress authorizes further action.

Under the War Powers Act of 1973, Congress must declare war or authorize use of force within 60 days — a deadline that arrives Friday. The law provides for a potential 30-day extension, but the Republican administration has not indicated publicly whether Trump will seek it.

Sen. Tim Kaine, a Democrat from Virginia, asked Hegseth whether Trump will seek congressional authorization or ask for the 30-day extension. The Defense secretary said the clock pauses during a ceasefire. Kaine disagreed based on his reading of the law.

The Trump administration is in “active conversations” with lawmakers on addressing the 60-day timeline, according to a White House official, who spoke on condition of anonymity to discuss private deliberations.

Finley, Groves and Kinnard write for the Associated Press. Kinnard reported from Columbia, S.C. AP writer Seung Min Kim contributed to this report.

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Oil temporarily surges above $126 per barrel as Iran war seemingly intensifies

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Brent crude, the international standard for oil prices, jumped by over 7% during early trading on Thursday, touching $126 per barrel, the highest intraday level since 2022 when Russia initiated the full-scale invasion of Ukraine.


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The US benchmark crude, WTI, also rose more than 3% and hit over $110 per barrel.

At the time of writing, prices have corrected slightly with the front month contract for Brent trading at around $122 per barrel and WTI at roughly $108.5.

Prices are now the highest they have been since the start of the Iran war.

The surge in oil prices is a direct consequence of stalled negotiations over the reopening of the Strait of Hormuz, the absence of a clear path toward ending the war and a seemingly increased chance of US-Israeli military action returning.

US President Donald Trump is set to meet with the head of the US Central Command, Admiral Brad Cooper, on Thursday and receive a briefing on new military options for action in Iran, according to Axios which cites two unnamed people.

The meeting signals the potential for fresh escalation in the Middle East as the resumption of combat operations is reportedly “seriously under consideration” and oil markets have reacted swiftly to the news.

A ceasefire has held since early April but recent negotiating efforts have fallen flat with the two sides refusing to meet. Meanwhile, the US and Iran both maintain their blockade of the vital Strait of Hormuz.

US Central Command has also reportedly asked for hypersonic missiles to be sent to the Middle East, which would mark the first time the US army has deployed that type of weapon.

The persistent blockade of ports and the threat of expanded combat have fundamentally reshaped market expectations.

A shifting landscape for OPEC and global supply

The spike in prices is occurring against a backdrop of significant structural change within the global oil hierarchy.

Earlier this week, the United Arab Emirates officially withdrew from the Organisation of the Petroleum Exporting Countries (OPEC) and its wider alliance (OPEC+), a move the nation claimed was necessary to prioritise its own national interests.

Under normal market conditions, the exit of a major producer from the cartel might be expected to signal a potential increase in supply or a decrease in price stability.

However, the sheer scale of the Iran war has rendered the UAE’s departure secondary in the minds of traders.

Despite the UAE’s exit, which was expected to potentially weaken OPEC’s grip on production quotas, prices have continued their upward trajectory.

This suggests that the “war premium” currently dominates all other market fundamentals.

Investors are currently less concerned with the internal politics of oil-producing nations and more focused on the immediate physical absence of Iranian crude, suspended shipping routes through the Strait of Hormuz and the threat to regional infrastructure.

However, the transition of the UAE to an independent actor still highlights a growing fragmentation in global energy governance at a time when the world’s energy security is at its most vulnerable.

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Skeptical Democrats confront Hegseth about Iran war for the first time since conflict started

Making his first appearance before Congress since the Trump administration went to war in Iran, Defense Secretary Pete Hegseth faced withering questioning from skeptical Democrats Wednesday over a costly conflict being waged without congressional approval.

The war has cost $25 billion so far, according to Pentagon numbers presented to the House Armed Services Committee during the contentious hearing, ostensibly focused on the administration’s 2027 military budget proposal, which would boost defense spending to a historic $1.5 trillion.

While Republicans focused on the details of military budgeting and voiced support for the operation, Democrats pivoted to the ballooning costs of the war, the huge drawdown of critical U.S. munitions and the bombing of a school that killed children. Some lawmakers also questioned President Trump’s dealings with allies and his shifting justification for the conflict.

Hegseth dismissed the criticism as political and rebuked lawmakers who pushed him for answers.

“The biggest challenge, the biggest adversary we face at this point are the reckless, feckless and defeatist words of congressional Democrats and some Republicans,” Hegseth said.

Democrats press about reasons for war

Wednesday’s hearing stretched nearly six hours as Democrats and some Republicans questioned Hegseth over the war and his ouster of several top military leaders.

In one tense exchange, Hegseth told Rep. Adam Smith (D-Wash.) that Iran’s nuclear facilities were obliterated in a 2025 attack by the U.S., prompting Smith to question the Trump administration’s reasoning for starting the Iran war less than a year later.

“We had to start this war, you just said 60 days ago, because the nuclear weapon was an imminent threat,” said Smith, the ranking Democrat on the committee. “Now you’re saying that it was completely obliterated?”

Hegseth responded by saying that Iran “had not given up their nuclear ambitions” and still had thousands of missiles.

Smith said the war “left us at exactly the same place we were before.”

Democrats accused Hegseth of misleading Americans about the reasons for the conflict and said rising gas prices are now threatening the pocketbooks of millions of people in the U.S.

“Secretary Hegseth, you have been lying to the American public about this war from day one and so has the president,” said Rep. John Garamendi of Walnut Grove, who called the war “a geopolitical calamity,” a “strategic blunder” and a ”self-inflicted wound to America.”

Hegseth blasted Garamendi’s remarks.

“Who are you cheering for here?” he asked the lawmaker. ”Your hatred for President Trump blinds you” to the success of the war.

Hegseth defends firings of officers

The Defense secretary faced intense questions from Rep. Chrissy Houlahan (D-Pa.) about his decision to oust the Army’s top uniformed officer, Gen. Randy George, one of several top military officers to be dismissed since Trump’s reelection.

Houlahan said George was deeply respected by both members of the military and Congress and asked why Hegseth fired him. Hegseth’s response that “new leadership” was needed failed to satisfy Houlahan.

“You have no way of explaining why you fired one of the most decorated and remarkable men —” Houlahan began before Hegseth interrupted her. “We needed new leadership,” he repeated.

The Pentagon announced this month that Navy Secretary John Phelan was stepping down. Hegseth previously removed Adm. Lisa Franchetti, the Navy’s top uniformed officer, and Gen. Jim Slife, the Air Force’s No. 2 leader, while Trump fired Gen. Charles “CQ” Brown Jr. as chairman of the Joint Chiefs of Staff.

Republican Rep. Don Bacon of Nebraska said that while Hegseth is empowered to make personnel changes, he shares what he called “bipartisan concern” about the firings.

“We had a huge bipartisan majority here that had confidence in the Army chief of staff and the secretary of the navy,” Bacon said. “And I would just point out it may be constitutionally right … but it doesn’t make it right or wise.”

Hegseth has said the changes are part of building a “warrior culture” at the Pentagon.

Republican Rep. Nancy Mace of South Carolina defended Hegseth’s personnel moves, saying he is “trying to innovate and trying to change the way we do business.”

“I’m glad that you’re firing people,” Mace said. “There are people there that are getting in your way. They need to go.”

Republicans back Trump on Iran

During the extended hearing, Hegseth detailed plans to increase pay for service members and upgrade munitions while also announcing that, as of Tuesday, the Pentagon had authorized $400 million in military aid for Ukraine in its fight against Russia.

But the debate and the questions were dominated by the war in Iran.

While a fragile ceasefire is now in place, the U.S. and Israel launched the war Feb. 28 without congressional oversight. House and Senate Democrats have failed to pass multiple war power resolutions that would have required Trump to halt the conflict until Congress authorizes further action.

Republicans say they back Trump’s wartime leadership, for now, citing Iran’s nuclear program, the potential for talks to resume and the high stakes of withdrawal. Still, GOP lawmakers are eager for the conflict to end, and some are eyeing future votes that could become an important test for the president if the war drags on.

Democrats questioned Hegseth over the war’s economic impact and rising gasoline costs, noting Trump’s promise to lower consumer costs. Hegseth responded by citing the threat posed by Iran.

“What is the cost of Iran having a nuclear weapon that they wield?” he said.

Republicans expressed support for Trump’s decision to strike Iran, including Mace, who in late March had expressed concerns about the justification for the war. “The longer this war continues, the faster it will lose the support of Congress and the American people,” she wrote in a social media post.

On Wednesday, Mace noted her past concerns but said she is “impressed with where we are today.” She told Hegseth: “Everything I have seen, you have surpassed all of my expectations.”

Iran’s closing of the Strait of Hormuz, a vital shipping corridor for the world’s oil, has sent fuel prices skyrocketing and posed problems for Republicans ahead of the midterm elections. The U.S. has imposed a naval blockade of Iranian shipping and three American aircraft carriers are in the Middle East for the first time in more than 20 years.

The countries appear locked in a stalemate. Trump told Axios on Wednesday that he is rejecting Iran’s proposal to reopen the Strait of Hormuz in exchange for lifting the U.S. blockade.

Finley, Groves, Klepper and Toropin write for the Associated Press.

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Oil prices rise despite UAE exit from OPEC as Iran war ceasefire hangs in balance

Oil markets face renewed instability following the United Arab Emirates’ formal exit from the Organisation of the Petroleum Exporting Countries (OPEC) and its wider alliance (OPEC+), announced on Tuesday and taking effect on Friday.


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The move, which ends decades of membership, comes as the global economy continues to reel from the ongoing war with Iran and the blockade of the Strait of Hormuz remains in place.

Investors are currently weighing the potential for higher future output from the UAE against the immediate and acute risks posed to global supply routes, as well as the increased chances that more countries drop out of OPEC and OPEC+.

Following the announcement, markets reacted swiftly as the potential for oversupply from the UAE was priced in. Oil prices fell by between 2% and 3%, particularly in futures contracts a couple of months ahead.

However, the move was just as quickly offset by the risk premium associated with the Middle East conflict and the current halt to US-Iran negotiations.

At the time of writing, US benchmark crude, WTI, is trading above $105 a barrel, while Brent crude, the international standard, is over $112. Both prices are around 4% higher on Wednesday from the UAE announcement low.

The UAE’s decision follows years of simmering tension between Abu Dhabi and Riyadh over production quotas. The UAE has invested over $150 billion (€128bn) in the state-owned Abu Dhabi National Oil Company (ADNOC) to expand its capacity to five million barrels per day.

However, under OPEC’s restrictive framework, much of this capacity remained underutilised, now prompting the government to prioritise its national interest.

The departure of the group’s third-largest producer is a significant blow to the cohesion of the 60-year-old organisation. Maurizio Carulli, global energy analyst at Quilter Cheviot, noted the limitations this exit places on the remaining members.

“Until tanker traffic through the Strait of Hormuz is safe again, OPEC’s ability to stabilise prices is sharply constrained, while US producers have gained outsized influence,” Carulli explained.

While the UAE has pledged to bring additional production to the market in a “gradual and measured” manner, the sudden lack of coordination within OPEC has introduced a new layer of uncertainty.

For the UAE, the blockade served as a final catalyst for its exit. With its primary export route under threat, Abu Dhabi has sought the diplomatic flexibility to forge independent security and trade partnerships outside the traditional cartel structure.

Despite the geopolitical turmoil, energy equities have remained resilient.

According to Carulli, “integrated majors such as BP, Shell, TotalEnergies, ENI, Chevron and ExxonMobil are benefitting from a price uplift that could add 5-10% to operating cash flow for every $10 increase in oil prices.”

Standoff over the Strait of Hormuz

In a separate but related development, the security situation in the Middle East remains precarious despite a fragile ceasefire. Iran has recently offered a ten-point proposal to reopen the Strait of Hormuz.

In exchange for restoring maritime traffic, Tehran is demanding a full withdrawal of the US naval blockade and an end to the current hostilities.

US President Donald Trump, who recently extended the two-week ceasefire mediated by Pakistan, described the latest Iranian offer as “much better” than previous iterations but still did not accept the terms.

Shortly after, Trump posted on social media claiming that Iran is in a dire and desperate condition with no leverage to negotiate.

Washington continues to insist on a permanent settlement regarding Iran’s nuclear programme and an “unconditional” reopening of the waterway before sanctions are lifted.

The impact of this blockade on global energy security cannot be overstated.

“The prolonged closure of the Strait of Hormuz has removed roughly 12% of global oil supply from the market, according to the IEA, a bigger disruption than the Yom Kippur war, the Iran‑Iraq conflict, the invasion of Kuwait or even the fallout from Ukraine,” Carulli highlighted.

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UAE To Exit OPEC, Fracturing Powerful Gulf Oil Alliance

UAE exits OPEC, exposing Gulf rift over oil strategy, Iran policy, and market stability.

The United Arab Emirates’ announcement to leave OPEC on May 1 marks more than a policy shift: It signals the unraveling of a long-eroding Gulf consensus on oil, economic strategy, and Iran. The announcement comes on the heels of the Gulf Creators event in Dubai on April 27.

“Every Gulf state had its own policy of containment toward Iran, and all of those containment policies have failed,” senior Emirati official Anwar Gargash said at the event. “All our policies have failed miserably,” he added—a rare public admission of strategic exhaustion that underscores why Abu Dhabi is recalibrating its regional and energy posture.

That recalibration now includes leaving the Organization of the Petroleum Exporting Countries. The UAE joined the bloc in 1967, when Abu Dhabi—now the federation’s capital—emerged as an oil producer. In announcing its exit from both OPEC and OPEC+ (a larger coalition that includes Russia), the UAE said the move aligns with its long-term strategy and will allow it to increase output in line with market demand gradually.

Widening Divide

At the heart of the split is a widening divide between Riyadh and Abu Dhabi. Oil policy has long been a source of tension between the two Gulf powerhouses. The UAE’s exit now leaves Saudi Arabia to shoulder a heavier burden in stabilizing global oil markets.

The UAE isn’t the only country to abandon OPEC cohesion. Qatar exited OPEC in 2019, breaking with the Saudi-led bloc amid an ongoing boycott.

Angola and Ecuador also left in recent years. The UAE’s similar move underscores that politics continues to shape the cartel, even as it focuses on stabilizing oil prices through production decisions. And because of its status as a major producer, the UAE’s exit is structurally more consequential for global supply management.

Experts say the UAE produced about 3.4 million barrels per day—about 13% of OPEC’s total output—and had the capacity to reach 5 million barrels per day before the US-Iran war began on February 28.

In effect, OPEC is not just losing a member—it is losing a key balancing force at a moment when geopolitical instability and oil market fragmentation are accelerating.

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