Oil jumps, stocks fall, as Trump presses into a widening Middle East conflict

WASHINGTON- The United States plunged further into conflict with Iran on Tuesday as a new round of strikes heightened fears of a broader war in the Middle East, sending markets reeling and oil prices soaring and prompting urgent calls from European leaders for a plan to follow.

President Trump acknowledged during an appearance in the Oval Office that the public will feel some economic pain as fighting continues to threaten areas critical to global oil and natural gas production.

“As soon as this ends, these prices are going to go down, I believe lower than ever before,” Trump said, although he did not provide a clear timeline for when the conflict would end.

As the war entered its fourth day Tuesday, Israel struck Iranian missile launch facilities and weapons factories and Iran retaliated in the Persian Gulf region, including attacking U.S. diplomatic sites in Saudi Arabia, Kuwait and Dubai.

The conflict simultaneously triggered alarm in global markets, sending stocks in Europe and Asia tumbling and the S&P 500 falling nearly 1%, after falling 2.5% in early trading.

European governments have also been forced to deal with the consequences, with some countries increasing their military presence in the region, their actions closely monitored by Trump, who has publicly singled out countries he believes have been helpful in his war efforts so far.

“Spain has been terrible,” Trump told reporters in the Oval Office, while threatening to “cut off all trade with Spain” after saying the country had denied U.S. forces access to its military bases.

Trump said he was “not happy with the UK either” and complained about not being allowed to use a military base at Diego Garcia in the Chagos Islands. Without access to that military base, Trump said U.S. planes were forced to fly “a lot of overtime.”

“We were very surprised. It’s not Winston Churchill we’re dealing with,” Trump said. Churchill served as British Prime Minister during World War II.

As Trump threatened his European allies, he sat next to German Chancellor Friedrich Merz, highlighting the tense landscape world leaders face as U.S. and Israeli forces work to destroy Iran’s missile capabilities and nuclear program and consider a potential change of government.

During their meeting, Trump said Germany had allowed the United States to use its air bases. Beyond that aid, Trump said, “we’re not asking them to put troops on the ground or anything.”

Asked by reporters how Germany planned to help in the conflict, Merz said he wanted to focus on discussions with Trump about what would happen “in the aftermath” of the war’s end.

“We are on the same page in terms of bringing down this terrible Iranian regime and we will talk the next day about what happens then if they are eliminated,” Merz said.

Trump discusses options for regime change

Trump still had little to say about what came next and was unclear who would lead Iran’s government, saying U.S. and Israeli military operations had killed the people he believed could have filled the leadership vacuum.

“Most of the people we thought about are dead,” Trump said. “Now we have another group, but they might also be dead based on the reports, so I guess you have a third wave coming and soon we won’t know anyone.”

His remarks were a surprising acknowledgment, in part because minutes earlier he had said the worst-case scenario in his mind was that the military operation would take place and “then someone who would be as bad as the last one would take over.”

“It could happen,” Trump said.

Asked if Crown Prince Reza Pahlavi, son of the former shah, was someone he would like to lead the country, Trump said he was a “very nice person” but did not say for sure whether he was his choice.

The president and his top aides have offered various explanations when asked about regime change, drawing criticism from Democrats and some conservatives who demand to know why Americans are being drawn into a war with no clear end in sight.

On Saturday, when U.S. and Israeli forces first struck Iran, Trump said toppling Iran’s theocratic regime was part of his justification. But on Monday, he stressed that Iranian missiles posed a threat to the United States and, therefore, the attack was carried out to eradicate its ballistic capability and nuclear program.

After briefing lawmakers Monday afternoon, Secretary of State Marco Rubio told reporters that the United States launched a “pre-emptive” attack on Iran because officials knew Israel was going to strike the country — a move he said would have put U.S. forces at risk and led to even more U.S. casualties. On Tuesday, six American soldiers were killed in action.

House Speaker Mike Johnson (R-La.), after being briefed by Trump administration officials Monday afternoon, said, “Israel was determined to act in its own defense, with or without American support.”

“If Israel had fired at Iran and taken action against Iran to remove the missiles, then they would have immediately retaliated against American personnel and assets,” Johnson told reporters.

Trump disputed the idea that Israel’s plans to attack Iran prompted it to launch the strikes, saying it was the other way around.

“If anything, I might have forced Israel’s hand,” Trump said Tuesday. “But Israel was ready, and we were ready, and we had a very, very powerful impact because virtually everything they had was destroyed.”

But we do not know exactly where the American army is in accomplishing its mission.

In a letter Monday, Trump told Congress that while “the United States desires a speedy and lasting peace, it is not possible at this time to know the scale and duration of military operations that might be necessary.”

Senate Minority Leader Chuck Schumer (D-N.Y.) warned in a speech on the Senate floor that the administration’s murky strategy was not good for the country.

“History teaches us a simple lesson: Wars without a clear objective don’t stay small. They get bigger, bloodier, longer, more costly,” Schumer said. “It’s not a defensive war. It’s not a necessary war. It’s a war of choice.”

The latest attacks in the region

On Tuesday, the war widened further when Israeli troops launched a blitzkrieg attack in Lebanon in a bid to dislodge the Iran-backed Shiite militant group Hezbollah.

The ground invasion comes a day after Hezbollah launched rockets and drones at an Israeli military position across the border; an attack, the group said, that was revenge for the assassination of Iran’s supreme leader, Ayatollah Ali Khamenei, and a response to Israel’s near-daily violations of a U.S.-brokered ceasefire in November 2024.

The attack sparked a massive Israeli attack on dozens of villages and towns in southern Lebanon, as well as the southern suburbs of the Lebanese capital, Beirut. The strikes killed 40 people, injured 246 others and forced tens of thousands to leave their homes and rush to seek refuge in Beirut and elsewhere, according to Lebanese authorities.

The Lebanese army announced on Tuesday that it was withdrawing from its positions in southern Lebanon in anticipation of a ground incursion by Israeli troops. The Israeli army’s Arabic-language spokesperson then issued a warning to residents of some 80 towns and villages in the region to “immediately evacuate their homes” and head north.

Hezbollah, meanwhile, maintained a defiant stance and continued to launch rockets and drones towards Israel.

“The era of patience is over and we have no choice but to return to resistance,” said Mahmoud Qatari, who chairs Hezbollah’s Political Council. “If Israel wants open war, so be it. »

The invasion comes more than a year after Israel occupied parts of southern Lebanon in 2024. After the ceasefire took effect, Israel withdrew from most parts of the country, except for five positions near the border. Yet in the 15 months since the ceasefire was signed, it has proven more theoretical for Lebanon, with Israeli warplanes and troops committing more than 10,000 truce violations, according to the UN.

Israel says its actions are aimed at preventing Hezbollah from reconstituting near the border, but the result has prevented residents of southern Lebanon’s border towns and villages from returning home.

Israeli military spokesman Brigadier General Effie Defrin said in a statement that the troops were “creating a buffer” inside Lebanon between residents of northern Israel “and any threats.”

As the conflict escalates, some 1,600 Americans stranded in the region have requested help and the Trump administration is trying to help evacuate them, Rubio said. But those efforts have run into difficulties as Iranian missiles have struck many airports in the Middle East.

“We know we’re going to be able to help them,” Rubio said. “It’s going to take a little while because we don’t control the airspace closures.”

Ceballos reported from Washington, Bulos from Khartoum, Sudan.