On the fourth day of the war with Iran, a drone struck the US consulate in Dubai, Israel sent troops into Lebanon, and the State Department scrambled to help Americans flee the Middle East. The widening conflict sent oil prices soaring: Brent crude topped $85 a barrel for the first time since 2024, and diesel futures had their biggest one-day jump since the first Gulf War.

A day after Iran cut off the Strait of Hormuz, which is responsible for transporting one-fifth of the world’s petroleum, Iraq began shutting down its domestic oil production. Iraq is OPEC’s second-largest oil producer, and is poised to cease the shipment of ~3 million barrels per day while the waterway is closed.

US officials said the attacks on Iran will persist for weeks; President Trump expects energy costs to increase until the fighting ends.

US cities might get more walkable...

...but only because driving may become prohibitive, if it isn’t already for some Americans:

• The average cost of a gallon of gas in the US was $3.11 yesterday, up by 11 cents from Monday and 23 cents from a month ago, per AAA.
• That may only be the start. Analysts believe oil prices could reach $100 per barrel.
• Should that happen, a gallon of gas could climb as high as $4 per gallon, which is bad for your wallet, but a good excuse to skip that 12-hour family road trip this summer.

Relief at the pump: Secretary of State Marco Rubio said the US is looking at ways to mitigate energy costs. However, the Strategic Petroleum Reserve and its 415 million barrels won’t be tapped right away, Bloomberg reported.

Yesterday afternoon, President Trump announced he would offer naval escorts and political risk insurance to companies transporting oil through the Strait of Hormuz, which seemed to calm the markets somewhat after the early-day selloff. Read here for the latest Iran updates.—DL

James Talarico wins Texas Senate Democratic primary. Talarico, a 36-year-old Presbyterian seminarian and state representative, defeated Rep. Jasmine Crockett to become the Democratic nominee for US Senate in November’s midterm elections. On the Republican side, incumbent Sen. John Cornyn and Attorney General Ken Paxton are headed for a runoff in May, since neither eclipsed 50% in yesterday’s vote. The winner will square off against Talarico in what’s likely to be one of the most closely watched races of the midterms, as the Democratic Party seeks to break the Republican trifecta. Meanwhile, in North Carolina, Democratic former Gov. Roy Cooper and Republican Michael Whatley won their respective Senate primaries.

DOJ abruptly resurrects fight against law firms. A day after the Justice Department abandoned its defense of President Trump’s executive orders targeting law firms that opposed him, it said…nevermind! The DOJ told an appeals court yesterday that, on second thought, it wants to continue its defense of Trump’s orders, which he issued last year in an attempt to strip government contracts and security clearances from four firms: Jenner & Block, WilmerHale, Perkins Coie, and Susman Godfrey. While nine other firms struck deals with the White House to avoid being included in Trump’s orders, these four mounted legal challenges to them. Several lower court judges have already ruled that Trump’s executive orders are unconstitutional.

OpenAI amended its deal with the Defense Department following backlash. In an internal memo he posted on X, Sam Altman, OpenAI’s CEO, said the company rushed its agreement with the department last week and would update it to clarify that the DOD won’t use its technology to intentionally spy on Americans. “It just looked opportunistic and sloppy,” Altman wrote. The ChatGPT maker’s deal came hours after President Trump placed a moratorium on the use of rival Anthropic’s AI tools. Anthropic’s arrangement with the Defense Department fell apart after it refused to cross certain “red lines” related to the military’s use of its technology. Altman said OpenAI has the same red lines as Anthropic.—AE

The big-box retailer that sells you milk and underwear is in search of a bullseye. Target plans to refocus on the needs of “busy families,” new CEO Michael Fiddelke told investors yesterday as the retail chain tries to win back customers.

The issue: Target has been struggling to turn itself around ever since a pandemic-era revenue boom subsided into stagnancy. Some customers told CNBC that they feel store inventory is lacking and that they aren’t fans of Target’s DEI rollbacks.

The potential fix: More baby care and groceries, and less of being “an everything store,” Fiddelke said. The company said it’ll invest an additional $1 billion in its supply chain, technology, and stores, including staffing (meanwhile, Target cut 1,800 corporate jobs in October).

For now

Fiddelke laid out this turnaround vision after the company shared a somewhat bad (but also somewhat good) earnings report for its most recent quarter, ending Jan. 31:

• The bad: Target posted its fourth straight quarter of declining store and online traffic, and revenue came in even lower than Wall Street’s already low expectations.
• The good: The retailer’s earnings actually beat estimates. Another bright spot: Target’s same-day deliveries—which compete with Walmart’s and Amazon’s offerings—grew more than 30%.

Looking ahead…Target expects to get out of its slump soon and projects 2% growth in net sales for this fiscal year.—ML

As yesterday marked 100 days until the World Cup kickoff, some fans wagered on tournament favorites Spain and England clinching the trophy, while others worried about whether North America is even ready to host.

Safety concerns are top of mind for the dozens of crowded events set to take place across the US, Canada, and Mexico:

• The US and Israel’s military campaign in Iran has compounded existing security anxieties related to the cartel violence in Mexico last week.
• Mexico’s government and FIFA assured the games there will be safe.

In addition, there are now doubts about whether Iran’s national team will participate in stateside matches.

Cash-strapped cities

US host city officials warned lawmakers last week that World Cup safety is in jeopardy due to funding chaos and a lack of security coordination between local and federal agencies. Uncle Sam earmarked $875 million to enhance game security, but that cash is being held up by a standoff over Homeland Security funding in Congress.

Mundial has run into municipal hitches…with the Boston-area town of Foxborough threatening to block the matches set to take place there until someone fronts $7.8 million in security costs.—SK

Ah, Wyoming—the Cowboy State, best known for its two breathtaking national parks, world-class hiking and fishing, and rich tech bros in Patagonia vests and Allbirds. Yesterday, the New York Times published a deep dive into how extreme wealth has transformed the state, particularly the area around Jackson. Per the NYT:

• The region’s per-capita income from investments (e.g., stocks) nearly doubled between 2017 and 2022 and is now 29 times the national average.
• Teton County’s total estimated wealth is more than $14 billion, making it by far the richest county in the US per capita.
• The county also has the highest income inequality in the country, with its top 1% making an average of $35 million a year—221 times what the bottom 99% earns.

But because that income is hardly taxed (state lawmakers also substantially cut property taxes last year), Teton County’s basic services are just scraping by. According to the NYT, the county’s hospitals have cut clinics, its schools are overcrowded, and there’s a housing shortage for everyone who can’t afford multimillion-dollar palaces.—AE