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Early Start with Rahel Solomon

Oil Prices Hit 8-Month Highs As Energy Markets React To Iran War; Iranians Split Between Celebration And Fear Of What's Next; Today: Primaries In North Carolina, Arkansas, And Texas. Aired 5:30-6a ET

Aired March 03, 2026 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[05:30:00]

BIJAN HOSSEINI, CNN SENIOR PRODUCER: It has a capacity of 2,500 passengers and 1,000 crew. They have been asked to remain on board until airspace can open up. But TUI cruises say that they are being well looked after and that they have enough resources for them as well -- Erica.

ERICA HILL, CNN ANCHOR: Yeah, Bijan. I really appreciate it. Thank you.

As we look at the broader impact, of course, of this situation and these strikes it is impossible to ignore the energy markets. Oil prices settling at their highest levels in eight months on Monday. Take a look right now at the numbers. Crude oil trading, as you see there, almost $76. Brent Crude climbing to just over $80 a barrel. Analysts say those prices likely to continue rising if ships are forced to keep avoiding the Strait of Hormuz.

Now, Iran's Revolutionary Guard Corps has said it will target any vessels passing through the narrow waterway between Iran and Oman. Remember, some 20 million barrels of oil pass through that strait every day. That's about a fifth of the world's oil supply.

Eleni Giokos is joining me now with more on this and, of course, the reaction from the world markets. With every day that ships are not passing through there the impact is massive.

ELENI GIOKOS, CNN CORRESPONDENT: It is absolutely massive and it's very evident in what you're seeing in WTI as well as Brent Crude, but also importantly, what we've seen with gas prices, Erica.

And in Qatar, an LNG facility has also been struck. The country declared force majeure on all the gas that is produced there, and we're talking about a significant volume that has now been, you know, taken away from the oil and gas market in the world.

And that ultimately means that, you know, many countries are not going to be able to compensate for this loss in volume because a lot of the liquification needs have basically been taken up in terms of the capacity that is available around the world. And most of that gas does go to Europe. A lot of it goes to China and the rest of Asia as well, and it often passes the Strait of Hormuz.

And you spoke about that chokepoint which clearly has seen major disruption. Around 80 percent of traffic has been disrupted.

I want to take you to this image that we've got of the strait, and it basically shows you the kind of traffic that is being disrupted, specifically at the mouth of the strait. You're also seeing a lot of vessels that are standing by. And here's the reality -- that a lot of the countries that have been reliant on oil and gas and other goods that pass through the straits are going to see an enormous disruption.

What does that mean for the average person around the world? Well, here's the thing. A lot of countries that are not oil-producing nations that are net oil and refined product importers -- they're going to have to tap into their strategic reserves, and that could last them for a while. And then they're going to have to start looking at importing, which means that whatever we're seeing on the screen right now with the oil prices and the gas prices, that will filter through into people's electricity bills as well as prices at the -- at the gas pump as well.

Importantly, we had U.S. Secretary of State Marco Rubio yesterday saying that the U.S. had anticipated this energy price shock and they're planning to put mitigation factors and a plan in place which they say will be announced on Tuesday. So we're waiting to see what that ultimately will mean. But because President Trump said this could last at least four weeks, and now we're seeing critical energy infrastructure that is being targeted.

And by the way, also Saudi Aramco has been targeted and here in the UAE the Fujairah Oil industrial zone -- there was a fire there this morning. That is being put under control. But we're watching very closely how energy infrastructure and capacity could be taken out of the market, which will cause a supply constraint.

HILL: Yeah, a number of factors to watch in this moment.

Eleni, appreciate it as always.

GIOKOS: Yeah.

HILL: Thank you.

Hagar Chemali is a former spokesperson for the U.S. Mission to the U.N. and former Treasury Department spokesperson for terrorism and financial intelligence. It's good to see you, Hagar, this morning.

As we look at where things stand you pointed out in a piece for The Atlantic, I believe, when we look at Iran there is so much focus, right, on what is happening. What is -- who will fill the leadership void? Who is stepping up in this moment? What are their military capabilities?

You pointed to the very real economic collapse happening in that country and the impact that could have as this continues to play out.

How much of a factor is that in terms of what it means for Iran's continued ability to strike its neighbors?

HAGAR CHEMALI, FORMER U.S. TREASURY SPOKESPERSON, TERRORISM & FINANCIAL INTELLIGENCE: Sure. Thanks so much for mentioning the piece.

I actually argue that with or without war or strikes that the Iranian regime was on its way to a very dire economic collapse -- something that would have caused the demise of this regime itself. And the reason for that is that it really had no economic leg to stand on.

That problem -- the severity of that problem really started at the end of last year when one of their largest banks, Ayandeh Bank, imploded. The regime absorbed it into a state-owned bank, printed a bunch of rials. It made -- it devalued their already devalued currency and inflation skyrocketed. And that's what precipitated the shopkeepers to go into the streets at the end of last year and the youth to join them and then lead into those protests.

[05:35:05]

But with or without war you still had five more banks that were about to implode, and this is not a regime that has the money to bail those banks out.

HILL: No, it doesn't. So we're looking as all of that is playing out and then we're seeing what is happening as I was just discussing, right, with my colleague Eleni Giokos, the choking off here of the Strait of Hormuz.

What's interesting I think to watch in the coming days is the reaction from China because China, of course, is the world's largest imported of crude. It's also the number-one buyer of Iranian oil.

What are you anticipating as you're watching that reaction and the potential impact it could have on the conflict?

CHEMALI: Well, on one hand, while China typically wants to block or impede a lot of U.S. national security objectives, and it has -- for example, in Russia -- but it has in a muted way and is also not suicidal when it comes to efforts like this. And we don't expect China to go run and save the Iranian regime. They probably will try to play a role where they have some say rather -- some kind of influence in what happens next. Because the fact of the matter is that no matter how you look at the current situation --

Again, even if war were to end tomorrow this regime is collapsing on its own. The way I liken it in the piece actually is that it's as though it's standing at the edge of a cliff and this war pushes it over the edge. And a lot of the -- by the way, one of the reasons for that is that its friends, like China and Russia, are not going to come save it. And when that happens that regime is not going to be able to pay any more. It's going to default. It's not going to be able to pay for government services and salaries.

So if you have an IRGC and police force, and security forces that have no salary you have to remember that a dictator is only as strong as a military is loyal. And so if they're not paid it's going to cause more defections, more disgruntlement, and that also eventually crumbles a regime. The Chinese government knows that.

HILL: The Chinese government knows it. It's interesting too because we hear from the administration -- from the U.S. administration about this being essentially the weakest moment that they have seen for Iran in decades, which was another reason to strike. But when we look at what will be left, right -- I was just discussing this a little bit earlier this hour about who is actually leading in this moment. Who could step in -- who could step in with the support.

As all of these things are playing out at the same time there is a real concern about how much this is resetting things within the region and what could be left in terms of that void in Iran.

Where are you most focused as you look at the situation play out -- as you're trying to read the tea leaves about how long this could last and where it could go?

CHEMALI: Sure. So I do -- I trust the administration's view that they expect a war to last several weeks, perhaps a month, maybe five-six weeks at most. The reason for that is that President Trump also has to play to his own base here and his base here is not in favor of long, drawn out global wars.

At the same time he had clear national security interests but also, most importantly -- and you mentioned this -- is this -- the weakness of the regime. And that's why I also pointed to that economic situation presented an opportunity to seize for the United States, and also to not let things drag out so that we could -- so that we could see that Iranian regime rebuild itself.

So what you're looking for in terms of where things are going to go next -- it could be a number of scenarios.

On one hand you always have the threat of a military coup, and you can see the administration warning the IRGC against any -- against anything that could resemble a coup. They're asking them to surrender, to lay down their arms, and therefore to get immunity. And I'm sure there are messages behind the scenes of the same.

There are also key leaders they clearly left alive, like the -- like Araghchi, the individual with whom they were negotiating -- the foreign minister. There's a reason for that -- for individuals they've left alive -- to leave the option open of somebody with whom they might be able to negotiate after strongarming that person.

Now, I'm not going to say that would be palatable to the 80 percent of the Iranian people who despise this regime, but that is something that you could see perhaps. They could twist his arm into slow democratic reforms, into a representative government, and certainly into stopping all nefarious behavior. And that's not just nuclear behavior; that's also regarding their support for terrorist proxies, their human rights abuses, and their ballistic missiles.

You have, of course, the -- a situation where Iran could fracture but I really don't see that happening.

HILL: Yeah.

Hagar, always good to talk to you -- appreciate it. Thank you.

CHEMALI: Thanks.

HILL: In terms of reaction inside Iran, of course, there have been pictures of mourning for the Ayatollah and dancing in the streets of Tehran. We'll take a closer look ahead at the mixed reaction to the U.S. and Israeli bombing campaign that is reshaping that country and the region.

[05:40:00]

COMMERCIAL

HILL: As U.S. and Israeli airstrikes hit Iran, voices from inside the country are revealing a conflicted mix of hope and also fear. Some celebrating the death of the supreme leader and the damage done to the regime while others worry about the growing civilian casualties and, of course, the big question over what comes next.

Here's CNN's Jomana Karadsheh.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: If I die, I'm OK with it, if that leads to the destruction of this regime.

JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT (voiceover): As U.S. and Israel bombs started raining down on Iran, a woman who says she's in the southeastern city of Kerman shared this rare audio recording from inside the country.

UNIDENTIFIED FEMALE: U.S. strikes have begun and I feel like I should record a video to say thank you, Mr. Trump, first of all. Thank you, Benjamin Netanyahu and the people of Israel. The responsibility of this war is on the Islamic Republic.

KARADSHEH (voiceover): While this voice is by no means is representative of a country of more than 90 million people, over the past six weeks we have been speaking with Iranians inside the country who oppose the regime. Many told us they wanted President Donald Trump's help. They were desperate, they said, after the bloody crackdown on protesters in January that killed thousands.

But with a massive bombing campaign and reports of rising civil casualties, including scores of schoolgirls killed and hospitals hit, the mood is shifting, even for some of those who want nothing more than this regime gone.

TEHRAN RESIDENT (through translator): People are not happy. Many police stations are located next to homes. Last night they struck one and nearby homes were damaged.

KARADSHEH (voiceover): The regime's repression and disruption to communication make it difficult for us to speak freely with people inside Iran, but we managed to get some texts and audio messages.

[05:45:05]

ISFAHAN RESIDENT (through translator): We were happy that those who had shot at the people, at the youth, and killed them were being punished. The situation now is a mix. There's happiness but also concern. And above all, we all hope that in the end they leave and that the Islamic Republic is no longer there.

KARADSHEH (voiceover): Video this weekend showed celebrations on the streets as new broke that the man who depressed them for more than 40 years, Ayatollah Ali Khamenei, is gone. The killing of Khamenei does not mean the end of this regime for now. It's lashing out and striking back hard and inside the country it seems it fears another uprising.

In Iran's Kurdish regions some people received this message. The enemy's plan, it said, will be "street riots next. Any movement that disrupts security will be considered a direct cooperation with the enemy and will be faced with the strong first of the IRGC intelligence organization."

So many Iranians want to believe that freedom is within reach. That this is the beginning of the end of a four-decade nightmare.

SHIRAZ RESIDENT (through translator): You always think the Islamic Republic is finished and suddenly, from a place you wouldn't expect, everything becomes OK for them again. That scares me.

KARADSHEH (voiceover): After the initial euphoria of this weekend as the help Iranians were promised finally arrived now for many the reality that this may be a long and costly war is starting to sink in.

Jomana Karadsheh, CNN, London.

(END VIDEOTAPE)

HILL: Funerals have been taking place in southern Iran for the dozens of students killed in a strike on a girls' elementary school soon after the U.S. and Israel launched their first attacks. Iranian officials say at least 168 students were killed in that strike early Saturday. The school sits about 60 meters or about 200 feet from an Iranian military base. U.S. Central Command has said it is aware of reports the school was hit and is looking into them.

Here in the United States anti-war protests erupting on Monday. Demonstrations ramping up following the military operations in Iran. As you can see on your screen there, this is just a snapshot of some of the cities where we saw a number of protests -- Madison, Wisconsin, Boston, New York, here in Chicago. Here in New York City protesters also questioning the administration's motives for launching the war.

(BEGIN VIDEO CLIP)

LAYAN FUELELHAN, PROTESTER: We know Trump is -- doesn't care what we think. We know that he does not have the well-being of the American people in his mind right now. He has the pockets of his rich billionaire friends at the forefront. But we do believe that we can put pressure.

LUKE THOMPSON, PROTESTER: Protests like this are all the more important to show the U.S. state that we're not just going to take whatever insane international policy they decide on the chin and not say a word.

(END VIDEO CLIP)

HILL: Across the city, in Times Square, pro-war demonstrators -- or demonstrators, we should say, holding a rally in favor of U.S. strikes on Iran. They say the Iranian people want to democracy and they deserve self-determination and freedom from the Islamic regime.

Well, that war with Iran spreading in Lebanon where Israel has launched a wave of deadly strikes. We're going to get you the view from Beirut next.

(COMMERCIAL)

[05:52:10]

HILL: The war with Iran spreading to Lebanon earlier when Iranian ally Hezbollah attacked Israel and Israel responded with new rounds of airstrikes. Blasts have been echoing through the Lebanese capital in recent hours. Before this most recent bombardment Lebanon's government said dozens of people have been killed.

CNN's Matthew Chance has this report from Beirut.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT: Well, it's been a very intensive night with Israeli airstrikes pounding areas of this city of Beirut in the southern suburbs, which are known to be a Hezbollah stronghold. Elsewhere in the country as well, Israel carrying out various military operations targeting what it says are things like Hezbollah weapons storage facilities and command and control centers.

But it's also hitting areas that are, you know, populated with ordinary people as well and Lebanese authorities say over the course of the past 36 hours or so as part of these very intensive Israeli strikes several people -- dozens of people -- more than 50, in fact, have been killed. More than 150 have been injured.

And thousands have been forced to flee their homes, particularly in southern Lebanon -- areas out of the line of the fire to relative safety. Some of them, in fact, have come here to Beirut where it is a little bit safer than in the south.

Now there's been condemnation of Hezbollah from the Lebanese government. They're very concerned that this Iranian-backed militia, which has been a traditional and reliable proxy of Tehran, is drawing Lebanon into the Iran war, something it desperately wants to avoid.

It has taken the sort of unprecedented step over the course of the past day or so of formally outlawing Hezbollah military activity. Now that sounds like a symbolic move and it is, but it's also a potentially, you know, very risky one that could fuel tensions between Hezbollah and the army -- the national army of Lebanon.

So very tense, very difficult times here as it seems that Lebanon is slowing getting drawn more and more into that Iran war.

(END VIDEOTAPE)

HILL: Our thanks again to Matthew Chance for that report.

Well, authorities are now investigating whether a mass shooting in Austin, Texas may have been inspired by this weekend's attacks on Iran. Two college students were killed in the shooting, dozens more injured. And now we've learned a third victim has died after being taken off of life support.

[05:55:00]

The attack happening in Austin's popular bar line Sixth Street in the early hours of Sunday morning. Officers confronted the shooter within minutes. He was shot and killed at the scene. They identified the shooter as this man, a 53-year-old naturalized U.S. citizen from Senegal. Law enforcement officials say they are looking into whether he may have been motivated by this weekend's strikes in Iran but do caution this investigation is still ongoing and there has been no definitive motive yet established.

We are now just hours away from polls opening for primaries in Texas, Arkansas, and North Carolina. A number of eyes though really focused in on that Texas Senate primary race. That is where on the Republican side the incumbent Sen. John Cornyn is facing challenges from the state's attorney general Ken Paxton and also Rep. Wesley Hunt.

In the Democratic race Rep. Jasmine Crockett is facing off against State Rep. James Talarico. Crockett argues that Democrats could win this seat.

(BEGIN VIDEO CLIP)

REP. JASMINE CROCKETT (D-TX): For the longest, they've tried to convince us that Texas is a red state. I have been explaining for a very long time that Texas is a voter-suppressed state, as well as a state in which voters just aren't very motivated. And I knew that if we could just turn out the voters then we would win.

So I'm really excited because I do believe that yes, I know we've said it over and over about Texas, but this is really our time. And that's just not me saying it. You can look at the numbers and see that people are motivated, they're getting out, and they're voting.

(END VIDEO CLIP)

HILL: Well, in terms of those numbers early voting data does show Democratic voter turnout in Texas right now higher than that of Republicans. Talarico closed out his primary campaign in Houston last night with a clear message.

(BEGIN VIDEO CLIP)

STATE REP. JAMES TALARICO (D-TX): We can transform this broken political system. They may have the money, but we have the majority. It's going to require -- it's going to require that we bring people together across these manufactured divisions. Fight that system, not your neighbor. That is how we're going to win this race in November.

(END VIDEO CLIP)

HILL: And we'll continue to follow those developments, of course, throughout the day.

Thanks so much for joining us this hour on CNN. I'm Erica Hill in New York. "CNN THIS MORNING" is up next.