DUBAI/JERUSALEM/ANKARA, (Reuters) – The U.S.–Iran war widened sharply today after a U.S. submarine sank an Iranian warship off Sri Lanka, killing at least 80 people, and NATO air defences destroyed an Iranian ballistic missile fired towards Turkey.
The escalation came as the powerful son of Iran’s slain supreme leader emerged as a frontrunner to succeed him, suggesting Tehran was not about to buckle to pressure, five days after the United States and Israel launched a military campaign that has killed hundreds and convulsed global markets.
The missile incident is the first time that Turkey – which borders Iran and has NATO’s second-largest military – has been drawn into the conflict, but U.S. Defense Secretary Pete Hegseth said there was no sense that it would trigger the Atlantic alliance’s collective-defence clause.
In a sign of the conflict’s expanding reach, Hegseth said the U.S. submarine strike hit an Iranian vessel off Sri Lanka’s southern coast, thousands of miles (kilometres) from the Gulf, as fighting paralysed shipping through the Strait of Hormuz for a fifth day, choking off vital Middle East oil and gas flows.
U.S. President Donald Trump has pledged to provide insurance and naval escorts for ships exporting energy from the region to contain soaring prices, but at least 200 vessels remain anchored off the coast, according to Reuters estimates.
The United States and Israel pressed on with their round-the-clock assaults on Iran, with Hegseth saying the U.S. was winning the conflict.
“This was never meant to be a fair fight, and it is not a fair fight. We are punching them while they’re down,” Hegseth, sounding supremely confident, told a briefing at the Pentagon. “We can sustain this fight easily for as long as we need to.”
By contrast, Iran is firing fewer missiles, signalling its military capabilities are greatly diminished, said Dan Caine, the chairman of the U.S. Joint Chiefs of Staff.
The Israeli military said its aircraft had struck a compound in eastern Tehran housing all Iran’s security bodies, including the Republican Guard, intelligence, cyber warfare and internal police in charge of cracking down on protests.
Israel also told residents to leave a swathe of southern Lebanon on Wednesday as it presses its assault on the Iran-backed group Hezbollah, which has again dragged Lebanon into conflict by firing drones and rockets into Israel on Monday.
A fall in global markets turned into a rout in Asia, including a record-breaking crash in Seoul, as some investors were unconvinced by Trump’s assurances he would quickly reopen the world’s most important shipping corridor.
European markets later stabilised and turned higher after two days of sharp losses, on hopes that the war might end soon. Some traders said the improved sentiment followed a New York Times report that Iranian intelligence had reached out to the CIA early in the war about a path towards ending it.
A source from the Iranian intelligence ministry rejected the article as “absolute lies and psychological warfare in the midst of war”, Iran’s semi-official news agency Tasnim reported.
