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Quest Means Business
Hegseth: U.S. Sub Sank Iranian Ship in International Waters; Iran Conflict Brings Strait of Hormuz Traffic to Virtual Halt; Dubai Caught in Crossfire of War with Iran; Iranian Officials Working to Select New Supreme Leader; European Gas Prices Rise Amid Persian Gulf Disruption; Iranian Drones May Pose Challenge to U.S. Air Defenses; U.S. Senate Voting on Whether to Rein in Trump's War Powers. Aired 4p-5p ET
Aired March 04, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:17]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street, the market has been up for most of the session, as
you can take a look, you'll see what is happening. The market is up and remains up.
The way things are looking at the moment, any second now, one and a two and a one two, three, four! That's the closing bell. Those are the markets and
these are the main stories of the day that we are following for you.
U.S. expanding its attack so far beyond the Middle East. An American submarine has been used to torpedo an Iranian warship off the coast of Sri
Lanka.
A spike in natural gas prices sets off alarm bells across Europe.
And we break down the cost and the routes of ways to find, and if you wish to leave Dubai.
I am live in New York today. It is Wednesday, midweek. It is March the 4th. I am Richard Quest and I mean business.
Good evening. Let's begin with the conflict with Iran spreading further from its borders as the U.S. Defense Secretary announces it is only -- or
getting just started.
Turkey says NATO defense systems have shot down an Iranian missile traveling towards Turkish airspace. A fragment of the missile fell in an
open area, no one was hurt or killed, thank God! And the U.S. says it sank an Iranian warship off the coast of Sri Lanka, some 1,600 miles away from
the main conflict zone. The Pentagon released this video of the strike.
Sri Lanka's Navy says it rescued more than two dozen people from the water. The Defense Secretary, Pete Hegseth said the attack on the warship
demonstrated the resolve of the United States.
(BEGIN VIDEO CLIP)
PETE HEGSETH, U.S. DEPARTMENT OF DEFENSE SECRETARY: An American submarine sunk an Iranian warship that thought it was safe in international waters.
Instead, it was sunk by a torpedo, quiet death. The first sinking of an enemy ship by a torpedo since World War Two.
Like in that war, back when we were still the War Department, we are fighting to win.
(END VIDEO CLIP)
QUEST: President Trump is praising the U.S. military's success so far speaking at an unrelated event just a moment or three ago.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: We are doing very well on the war front, to put it mildly, I would say. Somebody said,
on a scale of ten, where would you rate it? I said about a 15, and we are going to continue to do well.
We have the greatest military in the world by far.
(END VIDEO CLIP)
QUEST: In the last few moments, Israel says it has launched a fresh wave of attacks targeting military infrastructure in Tehran.
Nick Paton Walsh is in Tel Aviv.
Nick, let's take this bit by bit because there is a lot to unpack. First of all, this idea that the war is expanding, that other bits that weren't
involved are now getting involved. What do you make of that?
NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: I am not so sure that we are continuing to see the scope of this grow. I mean,
certainly from what we heard from the Secretary of War self-styled Pete Hegseth, we are dealing with a reduced amount of Iranian missiles and
drones since the early days of the war, where he said they were dealing with a preplanned playbook.
Certainly, I have today seen less reports of explosions or strikes around the Gulf in itself. We are certainly seeing to the north of where I am
standing in Southern Lebanon, the Israelis expanding the area they would like to see or ordering civilians out of, that is now up to the Litani
River, echoing late 2024. That suggests significant scope over there.
But in terms of what we are seeing inside Iran, clearly another wave of strikes, certainly and no letup in what is happening there. But in terms of
how this grows around the region, possibly not.
QUEST: Okay. But now let's talk about Israel's opportunistic air maneuvers, if you will, taking advantage, which seems to be the case. Look, you know,
they've managed to rope the U.S. in to doing what it is doing in Iran well, whilst we are about it, let's go hell for leather with Hezbollah and all
the others since the opportunity is there.
PATON WALSH: Yes, look, I mean we heard from Israel's Defense Minister Israel Katz today saying, look, we had a plan to do this between April and
June that was brought forward because of events. We have President Trump saying, no it wasn't Israel that forced our hand we actually forced
Israel's hand.
[16:05:10]
And then we had an explanation from The White House Press Secretary Karoline Leavitt today, basically saying that this was down to the U.S.
being concerned it was about to be attacked by Iran, its assets in the region attacked by Iran, so how this all began is exceptionally opaque. And
the multiple explanations we've been hearing haven't frankly, provided a narrative that anyone can hang anything to at all.
How the war is progressing is clear. We heard Secretary of State Rubio now today reiterating that they're well on the way, he said to achieving their
goals. We have heard consistent U.S. delineation of their goals of stopping some sense of missiles, short or long range, depending on who you're
talking to, preventing Iran having a nuclear weapon destroying their Navy, and adding on to that, some officials now talking about damaging their
ability to have proxies and spread terror around the world. That seems to be increasingly in reach.
And we had two different timetables for air superiority today. Pete Hegseth, the Secretary of War, saying they are about a week away from that
over Iran and Karoline Leavitt perhaps misspeaking when she said there were a matter of hours away from that when she addressed The White House Press
Corps today.
So, that is another goal potentially within reach. I should also say to you, Richard, behind all of this noise of war and the increased conflict
here, there has been some diplomacy discreetly at work.
The Iranian Foreign Minister Araghchi has run his Qatari counterpart, and that's a phone call which seems to have been designed to essentially
apologize for hitting so much of Qatar when they claimed Iran was only going for military bases.
Bear with me, and then we have Araghchi calling his French counterpart, Jean-Noel Barrot and then Emmanuel Macron, the French President speaks to
Benjamin Netanyahu, the Israeli Prime Minister, and then President Trump calls Emmanuel Macron.
So there is a lot of diplomacy moving here, not what we've seen over the last four days and that may be something of note.
QUEST: All right, I am grateful. Thank you, Nick Paton Walsh in Tel Aviv tonight.
Two of the world's largest shippers are no longer accepting cargo bound for the Persian Gulf. Maersk and Hapag-Lloyd cited fighting in the region.
Traffic has already been brought to a virtual halt.
I want you to look at this. It is an illustration for marine traffic, which shows the Straits of Hormuz, and it starts on February the 27th, start play
and you'll see just how much traffic there has been. The flow of ships, and it slows down as the conflict begins.
Then as it comes to a near stop on either side of this, and I am going to draw a straight on this, over here over here, over here, these are vessels
that are pretty much trapped there and shippers -- and the reason is because you can't get out, you know, where are you going to go as you're
waiting there?
Shippers have few alternatives to getting goods out of the region. And again, look and see where you are.
If you're in the Straits of Hormuz, you've got to go that way and out. Well, that's your problem over there. You have certainly an enormously long
way to go back up that way to head out that way, or to go around, and yet your main targets and your main areas, if you will, Dubai, the big
container port or the Free Port of Dubai. The Iranian -- sorry, the Iraqi oil facilities, everything around here is absolutely stuck because it has
nowhere to go.
Fawaz Gerges is with me Professor of International Relations at the London School of Economics, with me now. I am fascinated by this chokehold, this
geographical chokehold that historically, for centuries, the Straits of Hormuz has.
You can't get -- I mean whether it be containers or oil or whatever, you can't get it out without going around.
FAWAZ GERGES, PROFESSOR OF INTERNATIONAL RELATIONS, LONDON SCHOOL OF ECONOMICS: Well look, Richard, the Strait of Hormuz has always been
considered the most important energy bottleneck in the world, the most important energy bottleneck in the world. It is a narrow strip of water
between Oman and Iran and Iranian leaders have always considered the Strait of Hormuz as a deterrent weapon, a power multiplier.
Iran has strategic advantage because if you really have any ship that passes through the Strait of Hormuz has to take into account the authority
and the proximity -- geographic proximity to Iran.
What you have now, Richard, thousands of ships are stranded in the Gulf and that's why you have disrupting global supply chains and the prices of oil
and gas have spiked greatly in the past few days.
[16:10:07]
QUEST: Those thousands of ships, and I am showing them on the screen now, we can see them quite clearly, but they are also targets. They may not be
at movement, but they are targets whilst at anchor.
GERGES: Oh absolutely! I mean, and that's why insurance companies now basically will not insure any ship that basically intends to pass through
the Strait of Hormuz.
Remember, the Strait of Hormuz is the central global energy supply system. You have 21 million barrels of oil per day passes through the Strait,
almost a fifth of the global oil passes through the Strait of Hormuz, a similar share of natural gas also passes through the Strait of Hormuz, and
a third of fertilizer supplies.
So, you could imagine how important the Strait of Hormuz to the global energy supply system and that's why Iran has a strategic advantage. What
Iran is trying to say to the United States and Israel and Europe, look if you wage an existential war against me, I will basically make it very
painful for you.
We are seeing now the prices of oil and gas and even food in the supermarkets, imagine if the thousands of ships, the stalling of the
thousands of ships for now, if the situation if the war continues in the next one or two or three weeks, you're going to have really devastating the
political economy of energy and consumers in the United States and the U.K. and in Europe will feel it when they go to the supermarkets in terms of
major inflationary spike.
QUEST: Can I just ask you. I am going to ask you a rare question. I rarely ask an interviewee, but you're such a good friend of ours and you're so
knowledgeable that I feel the need to sort of -- to mine this for all its worth.
At this moment, tonight, midweek, what is the most important aspect of this story we need to be concentrating on?
GERGES: The most important aspect of the story is that don't buy into the misinformation that is basically thrown at you. it is too early. There is
so much dust. We are blinded by the dust.
The United States and Israel started this war. They will never be able to end it on their own terms. And the big question for me, Richard, who will
blink first?
QUEST: Right.
GERGES: President Trump or the Iranian leadership who has the stamina, the resilience in order to really -- and feel the pain, absorb the pain of this
particular bloody and devastating war.
QUEST: I am grateful, sir. We will talk more. You're always welcome on QUEST MEANS BUSINESS. Thank you.
Now, a report that Iran secretly reached out to discuss possible terms with the United States helped calm the markets. Remember, Nick Paton Walsh was
just talking about exactly that aspect of the story a moment or three ago.
Asian stocks were sharply lower, and then "The New York Times" had its story, and South Korea closed 12 percent lower, its worst day on record,
and then you've got these weird days. U.S. stocks followed, European stocks were higher. Oil did a bit of this, did a bit of that, you get the idea and
so you end the day with the NASDAQ being up one-and-a-quarter percent even though there is supposedly no negotiations.
Kevin Liptak is at The White House.
For you, Kevin, I've got another aspect I want to just focus briefly, if I may. The President said in his -- he said the war is going well. Hegseth
has called it a war. The Speaker says it is not a war.
It looks like a duck, it walks like a duck, you know the way that saying finishes.
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, and you know, I think members of Congress are tying themselves into a knot to try and claim that
the President hasn't entered a war, so they are off the hook on having to take a vote on the war.
You know were in the early days of this. President Trump says it is a 15 out of ten. But I think any reasonable politician knows you don't want to
take ownership of a conflict before you know how it is going to result. Ask anyone who voted for the Iraq War and saw their political career affected
by it down the line.
And so you have all of these Republicans who are trying to claim that the President has not, in fact, entered a war in order for them to sort of
shirk their constitutionally granted authority to actually declare war, and that's why you see them all twisting themselves into knots.
You know, no one in the administration is under any doubt that that's what this is, but it is a game of semantics that you see in Washington about
trying to avoid responsibility for it before they actually know what it actually is.
[16:15:10]
QUEST: Where in all of this do the markets and the business world play? It is going to be very nuanced in terms of wider companies less so for oil and
gas, as we've just heard from Fawaz about the significance of the Strait of Hormuz.
From your understanding, what is the pain capacity in that building behind you?
LIPTAK: You know, the President has traditionally shown himself to have very little pain threshold when it comes to the markets, and obviously, we
are only two or three trading days into this war. So I think it remains to be seen how exactly he will respond if we see major losses in the indices.
I think that what you've heard from the President today does actually reflect his genuine feeling that he thinks the objectives that he wants to
see carried out, are so far being carried out, whether it is taking out the missile sites, whether, you know this is not one of their official
objectives, but taking out regime leaders.
So, I think it remains to be seen how exactly the President will be affected by what we are seeing happening on Wall Street but, you know, if
past is any pretext, it will have a role eventually in how the President is viewing the success of this, not just the numbers but what he is hearing
from his friends, what he is hearing from people who are calling him up every hour of the day to suggest that maybe this isn't going as well as he
is thinking, but at least as of this hour, the President seems very committed to what he is doing.
QUEST: I am grateful. Kevin Liptak, you're at The White House. I am in New York. Thank you, sir.
The Gulf region has been caught in the crossfire. Travelers, expats, everybody there is desperate for ways out. The CEO of the travel agency,
Global7 will be with me after the break discussing the various options -- how do you escape from a place when everybody else is trying to do it at
the same time?
Quest MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Dubai has been caught, of course, right in the middle of everything that is going on with Iran.
(VIDEO CLIP PLAYS)
QUEST: Now, as you watch these pictures, just remember we are talking about one of the world's most prestigious popular resorts all throughout the
year, luxury hotels. It is sort of -- uber-luxury defines it. Not only that, and we must not forget, it is also the home to many hundreds of
thousands of ex-pats from Europe and the United States and elsewhere, along with hundreds of thousands of migrant workers who have come from the
subcontinent and from Asia who work there.
[16:20:20]
That is what you we are looking at the pictures was the moment the Iranian drones struck the grounds of the U.S. Consulate in Dubai. The Secretary of
State says it hit a parking lot.
Now over the weekend, DXP and the Burj Al Arab Hotel, they were damaged in minor ways by strikes. DXP is largely shut down for the fifth straight day.
It is usually the busiest or one of the busiest airports on the planet. This is what it looks like now. There are basically no planes coming in or
out, and those weird ones that you see are either government flights or they are just a few repatriation flights that are getting underway.
Foreign governments are now working to bring their citizens in the region home. Otherwise, you've really got very limited options.
Neighboring Oman has kept the airspace open, but of course, you've got to get there and that means shuttle buses, private cars, quite a long drive,
as you can see, towards the right from Dubai down to Muscat. You've also got 20-hour drives to Riyadh or Jeddah, that's going west out towards Saudi
Arabia, flights are departing from there.
But that really is only A, if you can make the drive, B, if you've got the visa and C, if you can get on a plane.
Daria Guristrimba is the founder and CEO of the luxury travel agency, Globe7. She joins me now.
Daria, look, let's be clear. Those who have got lots of money can get out. I mean, you charter a plane, you drive to Oman, and off you go. You get
your FlexJet, check your NetJets, and there you are. It is the rest of the people that are worried about what you do and how you get out.
DARIA GURISTRIMBA, FOUNDER AND CEO, GLOBE7: Hi, Richard.
Thank you for having me here. It is a pleasure to talk to you. So yes, there are two ways of how to get out from the country, either from Omani
border or through Saudi border, but if you hold a passport of some nationalities, you need to have the visa to cross through Saudi border.
So the easiest way is to get through Oman, and the easiest way is to have the car with Oman registration, who will come and pick you up in Dubai and
then bring directly to the airport, and you just fly on the private aviation or in an airlines which are doing great right now. So, there are
some options how to escape the country.
QUEST: My understanding is that even if you can get to Muscat, there aren't the hotels and there aren't the seats on the planes because just about
every seat is taken up.
Now, we know that some repatriation flights are getting underway, but it is not -- but there is just not the capacity either in hotels for families or
indeed for getting on aircraft.
GURISTRIMBA: Yes, but we should be very clear on the point that not everyone is trying to get out from the country. So, the government and the
hospitality sector is handling the situation so well, and that's actually the first time when someone in the world is doing everything so great.
So, we have all our partners always online, and we have support from everyone -- sales directors, general managers, everyone is helping. The
guests are supported so we have some type and parts of clients who don't want to leave the country, and they are staying until the airspace will be
open and will fly out from Emirates.
So not everyone is leaving, someone is staying and those who are leaving for them we are able actually to book even some regular flights. It is not
so bad as it seems.
QUEST: Give me an idea of what it costs to charter a plane? Say from Muscat up to Europe or just to get as far or to get up to -- what sort of amount
are we talking about, do you think.?
GURISTRIMBA: That's an interesting question, because at this point of time, only Turkish operators are flying to get people out, and you can fly either
to Turkey. Most of the people are going to Turkey, less of them are coming to Europe. So mostly like it is Istanbul and they're doubling the prices.
So the cost of the private jet now is starting from around 120K to 130K up to 200K.
QUEST: That's for the plane. And otherwise, it is Wednesday. And of course, if this ends, on a wider issue here, when this finishes, how difficult do
you think it will be for these destinations to rebuild? Not -- and you know, not their reputation for quality service, blah-blah-blah. That will
come back straight away, but the stability and security.
[16:25:10]
GURISTRIMBA: Richard, we live in the world of instability, unfortunately, since six years when the COVID started and the war in Ukraine and I am
Ukrainian so I escaped the country the same way and we had all the same problems four years back -- four years ago. Then since the beginning of the
year, we had the conflict in Venezuela, which leads to disruption of the air to send bots during New Year holidays, then last month we had the
Mexico situation, now it is Middle East. So, which means that people are getting used to live in this uncertainty and we expect that everything will
be back to normal as soon as the conflict will be over. The question is when, that's the major question.
QUEST: I am grateful for you tonight. Its late -- it is getting late into the evening, and thank you for joining us out of London tonight.
People who are traveling through the Gulf region found themselves stranded and some say they are growing frustrated by the lack of help coming from
their governments.
Bijan Hosseini reports.
(BEGIN VIDEOTAPE)
OLIVER SIMS, AMERICAN TRAVELER: I actually did hear some explosions, too, whenever I was waiting in line and everyone kind of looked at the window
and they were like --
BIJAN HOSSEINI, CNN SENIOR PRODUCER (voice over): Oliver Sims, an American who is flying from India to Texas, found himself in the wrong place at the
wrong time.
SIMS: You know, I landed in Doha at like 5:45 in the morning, it was supposed to be like a two to two-and-a-half hour layover. But you know, my
flight left like 30 minutes late, and we took off in about an hour into the flight, I noticed on the map that we had turned around over the Persian
Gulf.
HOSSEINI (voice over): Oliver is one of thousands of travelers stranded as tensions escalate across the Middle East.
HOSSEINI (on camera): Have you heard any of these interceptions or any of these attacks from Iran?
SIMS: Yes, I have. I actually was woken up out of my sleep from it. It was really scary because I just jumped out of bed. It was about like three or
four extremely loud explosions, and then also one time, I was trying to go to sleep and there were several explosions as well and I could see some of
the debris falling down like outside of my window.
HOSSEINI (voice over): Here in Qatar, authorities say 8,000 transit passengers were unable to continue on with their journeys.
HOSSEINI (on camera): In addition to all of those passengers who were caught during transit, there are also these two cruise liners at Doha's old
port behind me. This big one right here, that's the Mein Schiff 5. We know that they have a capacity of 2,500 passengers and a thousand crew. That
itinerary finished on March 1st, but we know that passengers are still on board, waiting until they can fly out.
HOSSEINI (voice over): Authorities say stranded passengers have been provided accommodation and support while flights remain suspended.
Some tourists, however, are trying to make the most of an unexpected delay, venturing out to explore the city, even as officials urge people to stay
indoors.
HOSSEINI (on camera): How are you feeling ?
UNIDENTIFIED FEMALE: Normal. It is normal for us.
UNIDENTIFIED FEMALE: We don't worry. I think in some ways we are happy that we will stay there for more time.
HOSSEINI (voice over): Others are far less relaxed about the situation. This group of Polish tourists say they've had little communication from
their government about when they might be able to leave.
And how is everyone feeling? Are you feeling okay? Are you feeling scared?
UNIDENTIFIED FEMALE: No, we are very, very sad and --
UNIDENTIFIED FEMALE: Frustrated. Just frustrated that we cannot -- there is no information and we just need to wait.
MARCO RUBIO, U.S. SECRETARY OF STATE: With up to the minute safety and security information --
HOSSEINI (voice over): The United States is urging its citizens abroad to register with the State Department and to reach out if they need
assistance. But for travelers like Oliver, help has been limited.
SIMS: I went to the number that they had provided and I called it --
AUTOMATED RESPONSE: If you are calling about the crisis in the Middle East, please press one.
SIMES: Yes, so then this music was on, and whenever this music was on I was waiting for like 30 minutes. They eventually answered and they said, you
know, just sign up for the step program. We really don't know what we can do.
HOSSEINI (voice over): For now, thousands of tourists remain in limbo, waiting for tensions to ease and flights to resume.
Bijan Hosseini, CNN, Doha.
(END VIDEOTAPE)
QUEST: QUEST MEANS BUSINESS for you during the middle of the week. What a busy day, a busy week!
Reports say Iran's Assembly of Experts are close to choosing the successor to the late Ayatollah Ali Khamenei. So who is the frontrunner? Who is in
the running for this thing?
In a moment.
(COMMERCIAL BREAK)
[16:32:30]
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Hello, I'm Richard Quest.
There's a lot more QUEST MEANS BUSINESS. You and I together. The conflict in Iran has seen oil and gas prices rocketing. And we need to understand
how far and how fast. U.S. lawmakers are debating the war powers resolution and President Trump's decision to attack without congressional approval.
Does he need it in any way? What happens if he doesn't get it?
We'll only get to that after the news headlines. This is CNN, in here, the news comes first.
The Pentagon says a U.S. submarine has sunk an Iranian ship in international waters off the coast of Sri Lanka. The Defense Secretary Pete
Hegseth describes it as the first sinking of an enemy ship by torpedo since World War II. Sri Lanka's Navy has said several bodies were recovered and
more than two dozen people have been rescued.
U.S. President Trump says American forces are in a very strong position against Iran, and there's been tremendous progress in less than a week of
war. The president is making the remarks a short time ago and says Iran's arsenal of ballistic missiles are being quickly wiped out.
The first big election of the U.S. midterms has resulted in a moderate winning over a progressive on Tuesday night. James Talarico won the
Democratic nomination for the Texas Senate seat, beating the progressive firebrand Jasmine Crockett. We don't know who Talarico will challenge as
the Republican race is into a runoff.
The mourning ceremonies for the Iran's late leader, Ayatollah Ali Khamenei, have been postponed according to the state media. The ayatollah was killed
in the airstrike by the U.S. and Israel on the first day of the war. The Fars News Agency is reporting the country's assembly of experts is in the
final stages of selecting a replacement.
Isobel Yeung takes a look at the various possibilities.
(BEGIN VIDEOTAPE)
SOBEL YEUNG, CNN CORRESPONDENT (voice-over): Now that Iran's Supreme Leader, Ayatollah Khamenei, has been killed in U.S.-Israeli air strikes,
Iran's clerical regime is quickly deciding who is going to succeed him.
This is obviously a very big role. It's the most powerful position in the Islamic Republic, and one that Khamenei has occupied for nearly four
decades, ruling over Iran with a brutal iron fist. Whoever is appointed matters because it's going to answer one key question, is this a regime
that's going to double down on Khamenei's repressive policies, or will it take the chance to recalibrate?
[16:35:07]
These are the top contenders for the position. First up, we have Mojtaba Khamenei. He's 56 years old. He's the second son of Khamenei, and has
strong links with the Revolutionary Guards as well as the besieged military forces, which is important if he wants to continue ruling in the same vein
as his father had been. He's been branded as the front runner, but father- to-son succession goes against the ideals of the regime which overthrew a hereditary monarchy in 1979.
We also have Alireza Arafi, a confidant of Khamenei. He was appointed to senior and strategically very sensitive positions and is part of the
clerical establishment. He's also part of the three-member leadership council which is currently running Iran. He's apparently very tech savvy,
fluent in English and Arabic, and is generally seen as more of a moderate, but he's not known as a political heavyweight, and doesn't have close ties
the security establishment.
Then you have conservative clerics like Mohammad Mahdi Mirbagheri or Hashem Hosseini Bushehri, less known publicly, but reportedly more close to
conservative elements, or the former head of the judiciary, Sadeq Larijani, whose brother Ali is currently the powerful National Security head.
Outside of those runners, the picture gets a little bit more complicated with the likes of Hassan Khomeini, the grandson of the founder of the
Islamic Republic, who has traditionally been seen as closer to reformist factions of Iranian politics, but obviously also carries religious and
revolutionary legitimacy. His younger brother Ali has also been making headlines recently, leading some analysts to suggest that he's positioning
himself.
And finally, there's the potential of the system to pivot and go for someone like Hassan Rouhani, the former president who hails from more
moderate camps of Iranian politics but is still very close to elements of the security establishment to take the realms.
Whoever is appointed as the next supreme leader is going to need the backing of the IRGC, or at least portions of it, and they'll need to act
quickly to consolidate power amongst the various elected and non-elected officials that have been ruling the country so far. On top of that, their
appointment could be short lived, as this person could be a clear target for Israel and the U.S.
U.S. President Donald Trump has weighed in to speculation, saying that several of the people his government had viewed as potential leaders are
now dead. He said, I guess the worst case would be that we do this and somebody takes over who's as bad as the previous person. He says, we don't
want that to happen.
Isobel Yeung, CNN, London.
(END VIDEOTAPE)
QUEST: The conflict is sending shockwaves through the global energy markets, as we and I have been talking about. We'll take a look in a
moment.
(COMMERCIAL BREAK)
[16:40:08]
QUEST: The price of natural gas has skyrocketed in Europe climbing nearly 55 euros per megawatt an hour. Now that means nothing to me, but just look
at what it said there. They had that shows you what it does mean in reality, from 30 up to 55 over the last few months.
The energy industry is scrambling to find supplies that don't sail through the Straits of Hormuz. And that's the tricky situation. It turned to the
Gulf after Russia invaded Ukraine.
Natasha Fielding is the editorial manager for gas LNG and biomass at Argus Media.
Damned if they do and damned if they don't. They thought they'd find the answer to Russian gas and oil, and they went over to the Gulf. And now look
what's happened. How much of a mess are they in?
NATASHA FIELDING, EDITORIAL MANAGER, GAS, LNG AND BIOMASS, ARGUS MEDIA: Yes. So it's -- this is a really big disruption to the global gas markets,
and it has really directly hit Europe. It's certainly the biggest thing to happen to European gas since the Russian gas supply cut offs in 2022. This
is -- we're talking about 20 percent of the world's LNG supply that at the moment just has nowhere to go. So we've seen a really big price reaction in
Europe, and we can expect a lot of volatility to come.
QUEST: Now, you see, the interesting part is you can have a price reaction which hurts consumers. But the question is whether you can get hold of the
stuff. I mean, you know, there's two aspects. One is the price that you're paying. But if it's not even available and you can't even buy it, so how
are they physically getting it when the supply is so badly constrained?
FIELDING: Yes. So if we're talking about Europe, really the impact will be felt from next month. So right now it's -- the weather is mild in Europe.
We've got weak gas consumption. And the LNG supply that's coming over the next few weeks was already secured before this crisis began. But when we
look into the springtime, into the summertime, Europe will need to scramble to get LNG supplies.
There will be strong competition between European and Asian LNG buyers from -- for the molecules that are still available. And that's -- a lot of that
is coming from the U.S. And so we'll see stiff competition for the supply that is available.
QUEST: Natasha, forgive me, this may sound like a naive question. But what happens if you can't get it? What happens? I mean, you can, you know, I
guess it's a bit like an Uber car, you know, the price keeps going up until somebody sells it to you. But then if somebody sells it to you somebody
else doesn't get it. So if there is a shortage of supply, what happens when there's not enough to go round?
FIELDING: Yes, so ultimately, one way or another, supply has to equal demand. So when we see these price spikes it, it needs to encourage either
more supply to come in or demand to be cut. And if we look at the global LNG situation, if we look at other forms of supply, there's not really much
opportunity to boost gas supply in the world at the moment. So what we'll see is prices rising up to the point where you see a cut in demand, whether
that's switching to coal from gas for power generation, more in Asia than in Europe whether that's a cut in industrial gas demand or even high energy
bills forcing consumers to cut.
QUEST: Right. This is fascinating. And one last question for you. How long does this do you think? How long have we got in terms of this crisis before
we're talking really serious problems?
FIELDING: So we're already talking about at least several weeks more disruption to the global LNG market. If this goes on for several months
longer, then we start to see concerns for security of gas supply in Europe for next winter because underground gas stocks in Europe are at their
lowest since 2022. We're going to need to really rebuild in the summer. And if we see constrained supply for several months then we could be looking at
a very challenging coming winter.
QUEST: As we move forward, we'll talk more to you and I'm grateful. Thank you for your expertise tonight. Thank you.
Now in a moment, QUEST MEANS BUSINESS, U.S. lawmakers are taking a vote on the president's war authority following the decision -- this action against
Iran is without congressional approval. So does that matter? In a moment.
(COMMERCIAL BREAK)
[16:47:43]
QUEST: U.S. air defenses might have trouble intercepting some Iranian drones, according to one source. The administration is admitting as much
during a closed door briefing.
Tom Foreman now looks at the weaponry involved.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT: Let's take a look at what the U.S. is doing right now. They are fielding a previously unused military asset. I'm going
to show you a life size model that we bring into our virtual studio here. This is the Lucas drone. Low-cost, unmanned combat attack system. It is, as
you can see, about 10 feet long, about an eight-foot wingspan. It weighs about 180 pounds. It's powered by a propeller back there, which means very
low heat signature, hard to track. And up front, it can carry about 40 pounds of high explosives.
It is also interestingly based upon a clone of an Iranian drone, the Shahed 136 Kamikaze. The Iranians have been working on this for years. The U.S.
got ahold of one. They had their engineers take it apart and say let's build a better version of it. That's what they have done. And yet the
Iranians continue to rely on this and many other types of drones. But this one in particular, they rely on for several reasons.
One, compared to a missile which requires a great big launch platform that can be targeted and taken out, and then the missiles are no longer useful,
this can be launched from the back of a truck, from the middle of a field, from a boat. Compared to a missile which requires a big production facility
which also can be targeted and destroyed. These can be made in many covert locations all over that are hard to track down.
And compared to a missile, which will cost at least $1 million, sometimes several million, this is cheap. Only about $20,000 per unit/ So when we
look at these maps out here where you see places where drones have hit or missiles have hit, every time a drone is hit it doesn't necessarily mean
just one drone was launched there. Instead, squadrons of things are launched. They send many of them in because if you have a system out there
that can't stop all of them you only need 10 percent to get through to do a tremendous amount of damage as we have been seeing in these videos in
various places.
One of the concerns here is also that the cost of the systems to stop these is higher than the cost of the drones.
[16:50:06]
In many ways military analysts say the Iranians have been preparing for many years for just this type of conflict so though they didn't want to
have a war necessarily now that the war has come to it, their use of drones is forcing the U.S. to fight a type of battle that the Iranians would
prefer, even as the U.S. tries to turn that weapon back against them.
(END VIDEOTAPE)
QUEST: Tom Foreman, reporting there on the weapons of war.
Now, from the weapons of war to the legality of the whole thing. The U.S. Senate is voting on the president's authority to wage war without
congressional approval. This is known as a procedural vote, and it's focused on the War Powers Act, the 1970s. Despite the intensity of the
military operation, now in its fifth day, according to the Republican leadership, it isn't a war.
(BEGIN VIDEO CLIP)
PETE HEGSETH, U.S. DEFENSE SECRETARY: An American submarine sunk an Iranian warship that thought it was safe in international waters. Instead it was
sunk by a torpedo. Quiet death. The first sinking of an enemy ship by a torpedo since World War II. Like in that war, back when we were still the
war department, we are fighting to win.
REP. MIKE JOHNSON (R-LA): It's not a declaration of war. It's not something that the president was required because it's defensive in nature and in
design and in necessity to come to Congress and get a vote first. And if they had briefed a larger group than the Gang of Eight, you know there's a
real threat that that very sensitive intelligence that we had, you know, might have been leaked or something.
(END VIDEO CLIP)
QUEST: When is a war not a war? Jeff Swartz is a law professor and former Florida.
And, Judge, looks like a war, sounds like a war, but it's not a war. What's the significance of the War Powers Act here?
JEFF SWARTZ, PROFESSOR, COOLEY LAW SCHOOL TAMPA BAY: Well, the War Powers Act deals with something short of a declaration of war. It gives the
president the ability to use his Article Two powers to defend the United States against what has been described now as being an imminent attack or
an actual attack on the United States.
This is the basic idea that the administration is using. They want to use their Article Two powers. They think that the War Powers Act is
unconstitutional as a limitation on his powers. And so therefore, they don't want anything coming out of the House and the Senate that they're
going to have to deal with.
QUEST: But the War Powers Act, if that's passed, restricts the president from what he can do. It's a limited number of days before -- he has to
bring the 60 to 90 days, or whatever it is before he has to. So the war -- passing the War Powers Act is a restriction on the constitutional ability.
They're voting at the moment, whether they pass it or not, and clever money seems to think that they won't pass it, if they don't pass it does that
give him carte blanche?
SWARTZ: It does for a period of time. I don't see any other way to make him stop doing what he's doing. It's one of those things where if Congress,
again, chooses to abdicate its powers to declare war to the right of the executive, to do whatever they want with the military, then we are one step
closer to absolutism.
QUEST: I mean, let's strip away the legality of it. As I understand it, the U.S. torpedoed a ship 1600 miles from the battle of or the field of
conflict at the moment in the Gulf. It was off the coast of Sri Lanka by all accounts.
SWARTZ: Right.
QUEST: And now there is an argument like the Belgrano, you could say, well, it was steaming towards or it was steaming away or whatever. But it doesn't
sound like there was an imminent threat within the theater of war.
SWARTZ: Right. No, it was not. This is one of two things. If this is not a war, then there was no justification even under the president's Article Two
powers to torpedo this ship and put it at the bottom of the Indian Ocean. That just doesn't exist. If it is a war, then of course it is an act of war
against a belligerent, and as a result of which the president and-or the military had the power to do what they were doing. But it's one or the
other.
QUEST: Right. But, Jeff --
SWARTZ: And since there is no declaration of war it can't be a war.
QUEST: But, Judge, the significance here is the War Powers Act came out of the 1970s and it came out of the Vietnam War to prevent the never-ending
wars that took place.
[16:55:10]
SWARTZ: Correct.
QUEST: It's not been used terribly successfully, but there have been resolutions. Iraq -- Gulf War one, Gulf War two, and others where Congress
has approved of the fighting.
SWARTZ: All of those resolutions actually, believe it or not, were repealed in December, and when they were repealed, Donald Trump signed those
repeals. So he clearly is taking the position which was espoused by his secretary of state, that the War Powers Act is unconstitutional and I can
do what I need to do to defend the United States.
QUEST: Is it likely that the constitutionality of the War Powers Act? And I realize there's a moot element to this because the fighting is taking place
at the moment, but is there a de juris (PH) possibility that it ends up before the Supreme Court or a de facto possibility it ends up before the
Supreme Court?
SWARTZ: The only way that's going to happen is if they pass this bill that's presently in front of the House and the Senate, and then the
president would have to go to court to declare that the War Powers Act is unconstitutional. Therefore, anything passed in relation thereto is also
unconstitutional. But I don't sense that these are going to pass at this point. So I don't think that's --
QUEST: No. No. Forgive me, but they're not going to pass or at least it seems like that way to us as well.
SWARTZ: No, they're not.
QUEST: Judge, thank you very much. As usual, send the bill to the usual place.
We will take a "Profitable Moment" -- well you can't have legal advice without a bill at the other end of it. Take a "Profitable Moment." It's
after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment."
So the war happened too quickly to get people out in advance and now the race is on. And the problem here is, of course, it's Dubai, it's Bahrain,
it is Doha. All places where there are large, not only migrant populations, but also expat populations from Europe and the United States. And that
means it's just very difficult to get out.
And people are looking to governments to rescue them and to get them out when simply governments don't have the capacity. Either because the
airspace is closed, and we have a society today where if they can't do it now, then there must be something wrong and it must be somebody's fault.
I can't help that. But I can tell you it's going to be a lot longer before anybody manages to sort out this mess just from a sheer logistics because
of the numbers involved and the distances and the complexities, I'm afraid that is the reality of today.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable.
You and I will be here tomorrow.
END
