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Downing of three U.S. jet fighters in Kuwait highlights risks of the conflict with Iran

The U.S. is facing increasing risks to its military forces and diplomatic presence in the Middle East as Iran is launching waves of missile and drone attacks across the region that are testing its ability to defend a swath of territory.

U.S. Central Command said that six servicemembers had been killed in the three-day-old campaign on Monday. The six died in a drone strike on a base in Kuwait, The Wall Street Journal reported. Separately, three American F-15 jets were downed by apparent friendly fire over Kuwait on Monday, in one of the most significant losses of equipment for the U.S. in the operation.

Bases that house U.S. forces have also come under attack in Iraq, Saudi Arabia and Bahrain.

The challenge for U.S. forces is handling Iranian attacks across a huge swath of the Middle East while trying to coordinate air defense with local allies. In addition to defending tens of thousands of American troops stationed in the region, the U.S. must also defend dozens of its embassies and other government installations. In the early hours of Tuesday, the U.S. Embassy in Riyadh was struck by drones, sustaining minor damage.

Iran’s stockpiles of short- and medium-range missiles, as well as swarms of explosive Shahed drones and cyber and electronic-warfare capabilities, pose a formidable threat to U.S. military bases in the region, said Ravi Chaudhary, a former assistant secretary of the Air Force in charge of installations.

“U.S. installations are going to be tested like never before in this particular conflict,” he said. “Our adversaries have demonstrated the intent and capability to go after our critical infrastructure to disrupt the ability of the United States to project air power.”

That challenge is mounting as Iran is widening its campaign of missile and drone strikes to include infrastructure that pumps much of the world’s oil and gas supply. An Iranian drone attack set fire to an important Saudi oil hub while Iranian strikes forced a halt to production of liquefied natural gas in Qatar, one of the world’s largest exporters.

Iranian threats have all but stopped shipping through the Strait of Hormuz, the world’s most important oil chokepoint which connects the Persian Gulf to the Indian Ocean.

Those facilities are defended by both U.S. and local air defenses that are now facing their most difficult test ever. U.S. commanders in the region oversee coalition air defenses that include local partners, but both have been overwhelmed at times by Iranian missiles and drones in recent days.

“They can reach our facilities and assets that are more fixed in the region. That could be embassy buildings. That could be anything that has an American flag on it,” said a former senior U.S. military official.

The depth of Iran’s stockpiles, which include inexpensive drones that it can produce at scale, point to one area where it could try to outlast the U.S., which is facing a shortage of munitions for its Patriot and Thaad missile defenses.

But the U.S. has other challenges in mounting its defense. Before the conflict, Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, warned the White House that a fight with Iran risks American casualties and could deplete munitions needed for future conflicts with adversaries like China.

“We have a very finite number of certain munitions,” said Daniel Byman, the director of the Warfare, Irregular Threats and Terrorism Program at the Center for Strategic and International Studies. “The other thing is, there’s, there’s a lot to defend.”

In addition to shooting missiles and drones out of the sky, the U.S. military has other measures it can take, including dispersing aircraft and other assets across a wide area so they are less vulnerable to individual attacks, a technique the U.S. used before the Iranian strike that aimed at a U.S. base in Qatar last year.

Even when incoming Iranian missiles are successfully intercepted, the blasted remains of those missiles can be lethal. Falling debris killed people in the United Arab Emirates and in Syria over the weekend.

The U.S. Embassy in Kuwait on Monday warned people not to come to the building, citing in part the risk of falling debris.

After the downing of the F-15s on Monday, the U.S. Central Command, which is responsible for the Middle East, said six crew members ejected safely after their jets were mistakenly shot down by Kuwaiti air defenses amid attacks by Iranian aircraft, ballistic missiles and drones. The crew were in stable condition, it said.

Verified video showed an American jet fighter spinning as it fell to the ground. The Wall Street Journal geolocated the video to an area on the edge of the capital, Kuwait City. A second video verified by Storyful showed people parachuting to the ground nearby. Onlookers wondered whether the parachuters were Iranian.

The incident came a day after the U.S. announced the first American deaths in the war. President Trump warned Sunday that casualties are inevitable as the U.S. military continues to strike Iran.

“And sadly, there will likely be more before it ends. That’s the way it is,” he said in a video posted on social media.

President Trump is open to supporting groups in Iran willing to take up arms to dislodge the regime, U.S. officials said, an idea that could turn Iranian factions into ground forces at least rhetorically backed by Washington.

Trump spoke Sunday with Kurdish leaders in Iran, officials said, and is continuing to engage other local leaders who might leverage Tehran’s weakness to make gains. The Kurds have a sizable force along the Iraq-Iran border, and Israel has bombed positions in western Iran, leading to speculation that it is paving a path for a Kurdish advance.

“President Trump has spoken with many regional partners,” White House press secretary Karoline Leavitt said in a statement, without explicitly confirming Trump’s aims. Axios first reported Trump’s call with the Kurds.

Officials said Trump hasn’t made a final decision on the matter, including whether he would provide arms, training or intelligence support to antiregime groups.

In announcing the start of U.S. and Israeli strikes on Iran, Trump urged the Iranian people to rise up and “take over your government,” adding “America is backing you with overwhelming strength and devastating force.” But by offering at least conditional support to armed resistance groups, each with varying goals, Trump is going further than just calling for a popular uprising.

On Tuesday, Trump twice shared on social media a Washington Post opinion piece about a “Trump doctrine.”

“There is no need for a U.S. invasion force,” wrote columnist Marc Thiessen. “The Iranian people are the boots on the ground.”

Changed regimes in Iran and Venezuela would neutralize two of the world’s most disruptive oil powers

There are countless ways the U.S. and Israeli attack on Iran could go wrong. Indeed, commentators seem to have dwelt on little else.

Instead, let’s game out everything going right, if only because that would be a game changer for world energy security and geopolitics.

If Iran, along with Venezuela, is soon ruled by a regime friendly or at least not hostile toward the U.S., that would neutralize two oil exporters who have regularly been the cause of supply disruptions in recent generations. Russia would remain the only adversarial oil power with significant sway, and its clout would be diminished.

This is a scenario, not a forecast. A range of outcomes is possible in coming days or weeks, and events in Iran remain fluid.

That said, they have so far gone well for the U.S. and Israel. They killed Iranian Supreme Leader Ayatollah Ali Khamenei on the first day, significantly degraded Iran’s military capabilities, and suffered limited retaliatory damage.

Iranian attacks have left gas facilities in Qatar and an oil refinery in Saudi Arabia damaged. Tanker traffic in the Strait of Hormuz has halted. But the strait technically remains open, and Iran’s ability to close it will likely diminish as the U.S. destroys its navy and missile batteries.

Market reaction Monday suggests disruption has been less than feared. Brent crude oil rose 7% to $77.74 a barrel Monday, below the $80 or higher many analysts had expected. U.S. stocks were little changed.

While President Trump initially called for regime change, he might stop short of that. After removing Venezuelan President Nicolás Maduro, Trump left Maduro’s vice president, Delcy Rodríguez, in charge, in exchange for control of its oil exports and industry.

An interim council now rules Iran while the country seeks a successor to Khamenei. Trump may conceivably let the regime stay in place if it meets his original conditions: an end to nuclear enrichment and ballistic missile development, and a halt to support for proxies such as the Houthis in Yemen and Hezbollah in Lebanon. The regime may conceivably see that as a less-bad option than a continuing air war and threat of domestic revolt. Agreement could pave the way for an end to sanctions.

As with Venezuela, an end to sanctions would only gradually boost Iranian production, owing to decades of underinvestment. Its output would rise from its current 3.2 million barrels a day to 3.6 million by the end of next year, just below current capacity of 3.8 million, according to Rystad Energy.

In the long term, new supply could be significant. Iran’s proven reserves were the fourth-highest in the world in 2020, behind Venezuela, Saudi Arabia and Canada, according to the Energy Institute. Before the 1979 revolution, it produced 5 million to 6 million barrels a day. Its combined output with Venezuela equaled Saudi output.

As important as any new supply from Iran is the diminished threat of its abrupt withdrawal. Iran has been a near continuous source of disruption to oil markets, a history that runs from its 1979 revolution through its war with Iraq in the 1980s and to years of sanctions imposed because of its suspected pursuit of a nuclear weapon.

Venezuela has been another regular source of disrupted supply, from an oil strike in 2002 to the imposition of sanctions during Trump’s first term.

Without such threats to supply, the entire world will benefit from less volatility and a lower “geopolitical premium” embedded in oil’s price.

The economic benefit to the U.S. is likely to be slight. It is already a net petroleum exporter. Critical minerals and semiconductors are a greater source of American economic vulnerability than oil.

But if Trump succeeds in turning Venezuela and Iran from implacably hostile to at least neutral or even friendly regimes, the geopolitical benefit is enormous.

With Arab-Israeli relations slowly warming, albeit strained by Israel’s war in Gaza, a normalization of relations between Iran and the U.S. might mean the end of Middle East conflict as a constant threat to the global economy. Military assets devoted to the region could turn to the Indo-Pacific.

Venezuela, like Iran, had long destabilized its neighbors, supported hostile regimes, and was an important source of oil to China.

Both had been reliable allies to Russia in its continuing efforts to dilute American influence around the world. Russia now faces losing both, plus the prospect of their oil cutting into its sales. On the other hand, it might benefit from China’s loss of access to cheap, sanctioned oil, said Jorge León, head of geopolitical analysis at Rystad.

Obviously, this scenario glosses over extraordinary downside risks beyond the most obvious, such as the regime being replaced by something worse, or none at all (i.e., civil war).

Even if the regime sues for peace, the U.S. may need an ongoing military commitment to ensure it complies with the terms. Similarly, keeping Venezuela’s new leader cooperative ​​requires “an armada parked off her coast,” notes Kevin Book, head of research at ClearView Energy Partners.

One painful lesson from the past: The U.S. drove Iraq from Kuwait in 1991, then stopped short of regime change. Instead, it maintained sanctions and no-fly zones before concluding that only regime change would end Iraq’s threat to the region, and invaded. It is precisely the scenario Trump has sworn to avoid.

MAHA Is Bringing Chaos to Biotech Investment Beyond Just Vaccines

Investors are increasingly wary of the rare-disease space, spooked by a regulatory shift

Finding out you’re sick is hard enough. Finding out you have a disease shared by less than 1% of the population with no established treatment is something else entirely.

Rare disease breaks the traditional math of drug development. Companies can’t run a 10,000-patient trial when only a few thousand patients exist worldwide. One way to get those treatments to patients sooner are accelerated approvals: a Food and Drug Administration review process that clears drugs based on early biological signals, instead of waiting years for definitive proof that they improve real-world outcomes.

That framework seemed poised to expand under President Trump. FDA Commissioner Marty Makary has been beating the drum for greater regulatory flexibility. He made the case again just a week ago in The Wall Street Journal, citing the example of the first-ever personalized gene-editing therapy that helped save Baby KJ, an infant born with a rare metabolic disease.

Yet whatever the top brass says, recent FDA actions tell a more complicated story. The accelerated approval pathway isn’t closed, but it has become narrower and far harder to predict.

The FDA has recently issued a string of high-profile rejections, including Regenxbio’s RGNX 2.21%increase; green up pointing triangle gene therapy for Hunter Syndrome and Disc Medicine’s treatment for a blood disorder that makes patients sensitive to sunlight. In some cases, the agency appeared to reverse its own guidelines provided to these companies. The collective pattern is unmistakable to investors: In 2025, the FDA greenlighted only nine accelerated approvals, down from 20 in 2024 during the final year of the Biden administration, according to RBC Capital Markets.

The biotech industry has broadly been on the upswing, with the SPDR S&P Biotech ETF up 43% in the past 12 months, but many rare disease names are facing a measurably higher bar from investors. There’s uniQure, for instance. The gene-therapy developer recently had its Huntington’s therapy—a one-time injection delivered directly into the brain—denied accelerated approval in what the company called a dramatic reversal of guidance from the FDA. On Monday, uniQure said the FDA told it that early studies weren’t sufficient and that approval would require a large late-stage trial in which some patients undergo a sham procedure so outcomes can be directly compared. Its stock plunged 33% on Monday.

Much of the tension centers on Vinay Prasad, the head of the FDA’s Center for Biologics Evaluation and Research (CBER). A longtime academic critic of the agency, Prasad built his reputation through books and articles that challenged the pharmaceutical industry—some of which have specifically argued the accelerated approval process has grown too lenient. With Prasad now installed in a key leadership role, the agency has undergone a visible retreat from the “regulatory flexibility” that prior leadership once promised.

For investors, the signal is becoming increasingly clear: Steer clear of the gray areas. “If you’re investing in small data sets and relying on surrogate endpoints, the risk has simply become too high,” says Simos Simeonidis, managing partner and co-founder of Kos Biotechnology Partners, an investment fund.

Some criticisms of the accelerated approval pathway aren’t unfounded. Forged during the HIV crisis, it was built for speed, but some companies exploit it by failing to complete required follow-up studies. Drugs that don’t work often stay on the market, and some should never have been approved at all.

“The answer isn’t to shut the door,” says Anna Kaltenboeck, president of Verdant Research, who helped draft drug-pricing laws under the Biden administration. “It’s to hold companies accountable.” Retroactively changing the rules midtrial or later, she argues, creates instability not just for pharma, but for the patients waiting on these treatments.

Uncertainty can give rise to opportunity for brave investors. For instance, a recent FDA refusal to review Moderna’s application to sell a new seasonal flu vaccine initially sent the stock down. But after a White House intervention last month led the FDA to reverse course, Moderna’s MRNA -1.35%decrease; red down pointing triangle stock went on a tear. It is now up more than 70% this year. The lesson wasn’t just about vaccines—it was about how policy risk, once priced in, can unwind abruptly.

Rare disease attracts far less political attention, but the same dynamic applies. As Jared Holz of Mizuho notes, the current environment can produce some discounts driven by regulatory uncertainty rather than deteriorating science. He cites the case of Replimune REPL -6.41%decrease; red down pointing triangle, whose stock plunged on regulatory pushback but later recovered after the company addressed the FDA’s concerns. Or take the case of Capricor Therapeutics CAPR -3.83%decrease; red down pointing triangle, which is developing a cell therapy for Duchenne muscular dystrophy. The stock plunged after the FDA initially rejected it in mid-2025. But later in the year the stock soared after the company released positive data from a more advanced clinical trial.

Some investors are also watching whether Prasad remains in his current role. He already left and returned last year, and the Journal has reported on internal complaints involving him.

Polymarket users won big with unusual bets on US attack on Iran

FT analysis identifies 12 accounts on platform that made large well-timed wagers just ahead of start of conflict

The US attack on Iran was preceded by a number of unusually large and well-timed bets that made a combined profit of $330,000 and were placed by 12 suspicious accounts in the days before Saturday morning’s air strikes.

The FT has identified wallets on online prediction market Polymarket that collectively placed $66,993 in wagers that an attack would come by Saturday. About half of the bets made by these accounts came in the six hours before the strike.

“If a new wallet makes a very large bet on a single issue, you have to wonder why they’re doing that,” said Matt Saincome, chief executive of financial data provider Unusual Whales. “We do see people do that who are wrong . . . but it makes you think, perhaps that’s an insider.”

The FT identified the accounts in two steps. First, by identifying bets that were unusually large given the odds on offer, based on analysis of bets made in other political betting markets in recent months. One of the Iran markets contained more than 20 times as many outlier bets as an average market of its size.

Second, these outlier bets were then sifted to identify wallets that only placed bets on Iran-related markets, sold none of their positions early and had a perfect record.

After sifting for these factors, the FT identified 13 wallets, of which 12 opened their accounts just days before the attack. The bulk of their bets were placed in the 24 hours leading up to the attack, meaning they were betting on an assault coming within a day.

The profits highlight how anonymous betting sites such as Polymarket, which do not require customers in most jurisdictions to give their names and which work using crypto, may pose a bigger problem than previously recognised to the security of sensitive information if insiders start to trade on them. Military operations are a particular issue, given that they often rely on surprise.

Online discussions among users of prediction platforms frequently focus on how insiders can make money — and whether other bettors can mimic them.

The FT also uncovered another indicator of unusual betting patterns. Other, older Polymarket markets on whether the US would strike Iran by earlier dates in February saw the implied odds — which are determined by prices traders pay — of success become more distant as the deadline approached and the time left for the US to attack shrank.

However, in the run-up to the attack on February 28, the implied probability rose about 20 hours prior to the assault.

Polymarket, the Pentagon and the White House did not respond to requests for comment.

In the US, prediction markets are regulated as financial derivatives by the Commodity Futures Trading Commission. Because many market participants use futures to hedge against risks to their own business — such as a farmer worried about crop yields — the regulator permits “informed” trading.

However, it is illegal to “trade on information that has been misappropriated from someone else to whom it legitimately belongs”, said Peter Malyshev, a partner at law firm Sidley. A government employee who used information obtained in the function of their role would similarly be trading on so-called material non-public information, said Malyshev.

Unlike in mainstream financial markets, all trades and payouts on Polymarket are processed using blockchain technology, meaning transactions are public and can be traced to single, anonymous wallets that are visible to regulators and rival traders. That transparency has helped fuel an online culture of bettors hunting for potential insiders and copying their trades.

Democrats have criticised suspected insider trading on Polymarket. Senator Chris Murphy said on Sunday that it was “insane” that trading on military actions was legal and said he was “introducing legislation ASAP to ban this”.

The CFTC, which has maintained a light-touch approach to the fast-growing prediction market economy, issued an advisory on Wednesday asserting that it has “full authority to police illegal trading practices” on prediction markets, including the “misappropriation of confidential information”, fraud and manipulation. The CFTC declined to comment further.

In the first case of its kind, Israel last month brought prosecutions against two reservists suspected of using classified information to bet on the country’s military operations.

The FT identified eight accounts that made profits totalling $405,000 from unusually large bets at long odds on imminent action by the Israel Defense Forces.

The FT has also found a similar pattern of bets in a market related to the US government’s capture of Nicolás Maduro in January.

The implied probability of Maduro’s removal from office remained low throughout December and was at about 9 per cent when the US operation that seized him began in the early hours of January 3.

Six accounts were set up between December 30 and January 2 that had no subsequent activity, only bet on Venezuela-related topics and maintained a perfect betting record. They collectively staked $9,807 at prices that would later pay out $133,878.

In addition, a seventh account, which was set up just a few days earlier, placed $32,000 of bets on Maduro-related markets, making $404,222.

Not all suspicious wagers come from informed insiders, however. Multiple traders posting on X at the start of this month believed they had spotted an insider betting on the US striking Iran before February 9, after a wallet, which had only placed one previous punt, placed a large bet on odds of just 2.5 per cent.

No strike took place, and the account ultimately lost almost $100,000.

Kyiv says evidence shows Druzhba pipeline is too damaged to restart supplies after attack by Moscow in January

Ukraine is under pressure to let the EU inspect a damaged pipeline carrying Russian oil to Hungary and Slovakia, as the two pro-Kremlin countries accuse Kyiv of overstating the impact of an attack by Moscow — despite what Ukrainian officials say is evidence of extensive destruction.

Ukraine says it needs time to repair the Druzhba pipeline and has provided evidence of harm from a Russian air strike in January, but Hungary and Slovakia claim that Kyiv intentionally shut it off.

Hungary has delayed the approval of an EU loan for Ukraine until it is reopened, and proposed to send a fact-finding mission to Ukraine, together with Slovakia.

Now some pro-Ukraine EU governments and the European Commission are also asking Kyiv to allow a visit to prove that it is trying to restore oil flows, according to five EU diplomats and officials.

Two of them said that European Commission president Ursula von der Leyen and António Costa, president of the European Council, had specifically asked Ukraine’s leadership during their visit to Kyiv on the fourth anniversary of Russia’s full-scale invasion for access to the Druzhba pipeline in order to assess the damage independently, but were denied. The commission did not immediately respond to a request for comment.

The dispute has become more urgent as energy prices soared after US and Israeli military action against Iran disrupted global oil and gas supplies. And it has intensified as Kyiv continues to refuse access to European inspectors.

One senior EU diplomat said Kyiv had scored an “own goal” by giving Hungary an excuse to block the loan.

“We cannot say if there is damage or not. There are very easy ways to document it and show they are working hard to repair it. They haven’t done it,” they said.

A senior Ukrainian official close to President Volodymyr Zelenskyy pushed back against suggestions that Kyiv was dragging its feet, saying technicians from Ukraine’s state energy company Naftogaz had given European counterparts evidence that Druzhba had been badly damaged.

Sergii Koretskyi, chief executive of Naftogaz, told the FT the Russian strike caused a storage tank holding 75,000 cubic metres of oil to ignite a fire “that took 10 days to extinguish”.

“Numerous pieces of equipment, power cables, transformers and a leak detection system responsible for pipeline sealing were damaged,” he said. “The air attack caused a fire in the biggest oil reservoir in Europe, with a diameter the size of a football field.”

Given the magnitude of the damage, he said, “a full assessment takes time and is expected soon”.

Ukraine’s state-owned UkrTransNafta said at the time of the attack that “emergency restoration work” was being carried out, but that Russia’s relentless attacks made safe operations difficult.

The Ukrainian official said restarting flows would require dispatching repair crews into potentially dangerous areas and diverting limited resources.

“Why must we repair the pipeline — in times of war and without a ceasefire — which gives oil from Russia to Russia’s friends?” the official asked.

Hungarian PM Viktor Orbán has delayed the approval of a €90bn EU aid package for Kyiv over the dispute, as he intensifies his anti-Ukraine stance ahead of an election that polls suggest he may lose.

Ukrainian President Volodymyr Zelenskyy accused Orbán of using the issue to bolster his re-election campaign and indicated in an interview with the FT on Monday that he wasn’t inclined to ease the situation for his Hungarian counterpart.

“Now you are blocking €90bn . . . money we need for weapons, for survival,” Ukraine’s leader said.

As tensions deepened, EU ambassador to Ukraine Katarína Mathernová requested through Zelenskyy’s office to inspect the damaged pipeline or send other EU diplomats, according to two people briefed on the matter. The request was rejected on security grounds, the people said.

Orbán claimed on Monday that he had satellite evidence showing Druzhba was not damaged enough to render it inoperable and said that he would maintain ‘‘countermeasures’’ until Ukraine restarts oil shipments.

Satellite images viewed by the FT clearly showed damage to the pipeline site from the Russian air strike. But the extent of the destruction could not be assessed by the images alone.

Slovakia Prime Minister Robert Fico said his and Orbán’s offer of a “fact-finding mission” to establish the extent of the damage was turned down.

The Ukrainian official insisted that Zelenskyy had invited Fico to discuss the issue directly in Kyiv, but the invitation was declined.