How The Israel-Iran War Is Reordering the Middle East
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how the war between Iran and Israel is realigning the Middle East. One of the driving motivations for Saudi Arabia to normalize with Israel was to deepen cooperation in countering Iran. That threat is much less intense for Saudi Arabia than it once was, and so that incentive is not as strong as it once was.

Plus, oil companies are enlisting President Trump to push back against Europe's environment rules. And Anna Wintour is ending her 37-year tenure as editor-in-chief of American Vogue. It's Thursday, June 26th. I'm Alex Osela for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

Oil executives have enlisted President Trump in fights against climate rules across the U.S. Now they have won his support in their effort to quash Europe's flagship environment rules. Colin Eaton writes about oil companies for the journal and joins me now. Colin, what have the oil companies been pushing for? They're asking the president and his trade and economics team to use the trade negotiations to push for a full rollback of

of a law that's called the Corporate Sustainability Due Diligence Directive. It requires any company with over 450 million euro in revenue in Europe to report their carbon emissions, not only for their own operations, but also that of their suppliers. And if you're thinking about a global oil company like Exxon or Chevron or Shell,

They have thousands of suppliers around the world. And the oil companies argue that this law is overreach because it requires no matter what,

where those suppliers are, whether they're in Texas or Australia, that they're required to be subject to this EU regulation. And penalties for noncompliance can rise to as much as 5% of net annual turnover at the parent company levels.

What does this tell us about the influence of oil companies in President Trump's second term? Oil executives have been pretty influential so far in the second Trump administration, more so than in his first. I think part of that is because of a reaction to the Biden administration that was prioritizing oil.

electric vehicles over fossil fuels. And they've been more natural allies to the Trump administration than, say, big tech or banking and other industries. They have a lot of people in the administration. Chris Wright, the secretary of energy, he's a former CEO of a hydraulic fracturing company called Liberty Energy. And former North Dakota Governor Doug Burgum, now secretary of interior energy,

are in charge of President Trump's energy dominance agenda. The idea being that the U.S. is going to push exports of natural gas and crude to more countries and bigger volumes. That was WSJ reporter Colin Eaton. Thanks, Colin. Thank you.

Anna Wintour will be stepping down as editor-in-chief of the American edition of Vogue magazine after 37 years on the job. Wintour ran day-to-day operations of the magazine and grew it into a cultural tastemaker in fashion, with an impact far beyond its circulation numbers. She will retain position as Condé Nast's global chief content officer and global editorial director of Vogue.

Her face was a staple in the front row of fashion shows around the world, and she helped inspire Meryl Streep's character in the film The Devil Wears Prada. Major U.S. indexes were up today, driven by gains in shares of technology and financial companies. The S&P 500 and Nasdaq were both on track for new high watermarks before retreating slightly in afternoon trading. The S&P 500 rose 0.8 percent, the Dow ticked up 0.9 percent, and the Nasdaq closed about 1 percent higher.

Last week, the Senate passed the Genius Act, which aims to bring more oversight to stablecoins, digital tokens with a fixed price. You'd think that would be good news for Tether, the number one player in stablecoins. But in fact, the bill brings a tough message for Tether and rules that might even get it in trouble. Journal reporter Alexander Osipovich is here with more. Alex, why is this bad news for Tether? The legislation includes a number of requirements for stablecoin issuers that at this time right now, Tether does not appear to meet.

A big one is that stable coins, which are tokens that maintain a value of $1, need to be backed by very safe conservative assets, basically cash, short-term treasuries, and similar things that will hold their value even in the case of massive market volatility. Tether has a lot of treasury bills, but it also has part of its reserves in things like Bitcoin and precious metals and other investments that it doesn't even identify.

In addition to that, Tether has for years resisted doing a full audit. It puts out these things called attestations showing a snapshot of what's on its balance sheet at different times, but it doesn't put out the full financials that a public company in the U.S. needs to do. Under the Genius Act, large stablecoin issuers would need to put out audited annual financial statements. So what can the company do about this?

Tether has floated the idea of putting out a locally issued U.S. version of Tether that would be compliant with the Genius Act. It could also just pull out of the United States altogether. Recently, it essentially gave up on the European Union after the EU put out some rules on stable coins that it did not like.

And that is actually a viable option for Tether because right now, Tether's big business is actually in emerging markets. This legislation is obviously bad news for Tether, but are there other companies that do benefit from it? The biggest example is Circle, which issues the USDC stablecoin. That's the second largest stablecoin after Tether. Circle has always kind of held itself out as a more regulator-friendly version of Tether. They recently went public on the New York Stock Exchange, and they are expected to do well in a Genius Act environment.

Additionally, there are a number of other players such as big banks and even retailers such as Amazon and Walmart that have explored doing something with stable coins, according to reporting by my colleagues at The Wall Street Journal. And these types of players are definitely attracted by the fact that we will likely soon have a regulated environment for stable coins. That was WSJ reporter Alexander Osipovich. Thanks, Alex. Thanks for having me.

Coming up, how the war between Iran and Israel is reordering the Middle East. That's after the break.

The chairman of the Joint Chiefs of Staff, General Dan Kaine, said the U.S. began highly classified planning to destroy Iran's Fordow nuclear complex in 2009. That's virtually as soon as the Iranians began to build it. Meanwhile, Defense Secretary Pete Hegseth restated the Trump administration's assessment that U.S. strikes on Iran destroyed the country's nuclear program and chastised the press for reporting on an initial intelligence report that said the attacks had merely delayed Iran's nuclear efforts by a few months.

Separately, in his first public comment since the ceasefire, Iranian Supreme Leader Ayatollah Ali Khamenei claimed victory in the conflict, saying his nation had delivered a hard slap to America's face and the U.S. was overstating the success of its attacks.

The Middle East is undergoing a dramatic realignment, just not the one the U.S. and regional leaders had envisioned as little as two years ago. I'm joined now by WSJ foreign correspondent Stephen Kalin. So Stephen, before Hamas's attacks on Israel in 2023, Saudi Arabia was close to diplomatic recognition of Israel. How has the war between Israel and Iran changed that calculus for Saudi Arabia?

The calculus shifted a bit with Israel's war in Gaza. The high level of casualties has created domestic issues for Saudi Arabia, which has said that the war needs to stop before it could even consider normalization.

The most recent war between Israel and Iran has added a new complication to that. One of the driving motivations for Saudi Arabia to normalize with Israel was to deepen cooperation in countering Iran. At this point, over the past year, after Israel's war against Hezbollah in Lebanon and now against Iran directly, that threat is much less intense for Saudi Arabia than it once was. And so that incentive is not as strong as it once was.

What does the new alignment of the region look like at this point in the conflict? Before October 7th, there was a lot of talk about a realignment in the region, which would have integrated Israel and a number of Arab countries. The wars really broke a lot of that, at least paused a lot of that conversation, because Iran is greatly weakened and Israel's strength has grown quite a bit. It showed the extent of its capabilities. And so Israel's

In some ways, it's inadvertently intimidated some of the Arab countries that it was trying to court. What could the economic impact be of these shifts? That's one of the most important factors in the minds of leaders in the Gulf right now. Saudi Arabia and the UAE in particular have been very clear in recent years that their main priority is democracy.

They're domestic economies and they don't want to be drawn back into another conflict. The Middle East has obviously been through decades of conflicts. The Gulf has avoided most of those, but it doesn't want to get dragged into them. And it wants to, it's been focusing on ending conflicts around the region so that countries in the Gulf can focus on their own development. That was WSJ foreign correspondent Stephen Kalin. Thanks, Stephen. Thanks for having me.

Several of Republicans' largest proposed spending cuts can't be done as written in the fast-tracked budget process they are using to advance their mega-bill.

The ruling by the Senate parliamentarian, a nonpartisan advisor who rules on parliamentary rules and procedures, dealt a significant blow to the GOP's hopes of passing their plans quickly. The ruling impacts cuts to state provider taxes and Medicaid funding for undocumented immigrants and could amount to hundreds of billions of dollars. It makes it harder for Republicans to get their legislation on Trump's desk by July 4th.

And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Bansi with supervising producer Michael Kosmides. Additional support by Coleman Standifer. I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.