Author: openjargon

• Mukul Lalchandani, a real estate agent, discusses the impact of new commission rules.
• The new rules mean that sellers no longer have to pay the buyer's agent commission.
• These changes may most affect low-income buyers, but Lalchandani says his clients won't be affected.

This as-told-to essay is based on a conversation with Mukul Lalchandani, a 44-year-old real-estate agent from New York. It's been edited for length and clarity.

My parents wanted to buy a house in the US before immigrating here from Hong Kong, but they didn't know how real estate worked in this country.

They were working with the seller's broker and didn't realize they could work with a buyer's broker who would help them find the best deal. The seller's broker deceived them. They ended up spending a lot of money and had no house to move into when they arrived in the US. I decided to become a real-estate agent so I could prevent other immigrant families from going through the same situation.

I've lived in New York for 23 years and have been a real-estate agent for over 15 years. I established my own agency, Undivided, in 2023.

Most realtors in NY are not under the National Association of Realtors like the rest of the country. We have our own association called REBNY. The NAR and real-estate agents all around the country are preparing for new rules to pass.

One of the rules is that the seller no longer has to pay a commission to the buyer's agent. REBNY already implemented these rules starting January 1; the new rules were a shock for all of us. While the rest of the country is preparing for the rule changes, we're already seeing the results.

My agency has had to implement new policies to address the changes brought on by these rules.

Here's what the new commission rules mean

There is a lot of confusion around the commission rule and what it means, especially for buyers. The rules were made as part of a settlement for a nationwide lawsuit. When someone sells a property, they must pay their broker and the buyer's broker a commission. It's not fair to the seller.

The new rules will mean that the buyer will have to either pay for their own broker or not use a broker at all.

I've implemented two major policies in my agency to help with the confusion

First, I make sure to sit down with each buyer and explain to them how the new rules affect them. At first, my clients are confused. Then, when it clicks, they're shocked. They realize they have to pay for the broker themselves. They have an extra cost for buying the property which they didn't consider before.

My agency has also begun requiring all new buyers to sign an "exclusive buyers agreement." In this agreement, we outline everything we will do to help the buyer through the buying process in their best interest. It also states how much they'll pay us for our services. This contract helps clarify the terms and payment and prevents any confusion related to the new rules.

We have to implement this contract and charge our clients a fee because we no longer get a commission from the seller.

All buyers are shocked, but this will affect low-income buyers the most

My agency is a boutique agency in NY, and my clients tend to be high-networth individuals. The buyers who come to me are shocked when they learn about the new fees but can afford them.

Real-estate investors want a broker to find the best property for them, so they'll also be willing to pay the commission fees. Buying in NY is especially complicated, so buyers really need a broker. The new commission rule will not hurt people looking to buy expensive homes or investment properties. It will hurt the lower-income buyers the most.

Buying a property without a broker is possible, but the buyer is taking a risk. Higher-income buyers such as foreigners and out-of-towners who buy real estate in NY will avoid the risk and pay the broker fees to make sure they get a good deal. However, lower-income buyers around the country may not be able to afford a broker anymore. That means they'll be more vulnerable to getting into a bad real-estate deal.

For example, if someone is buying a million-dollar home, they would need about $15,000 to pay the broker now. That can't come out of pocket for most buyers.

Many Brokers will leave the industry, and some jobs will disappear

This also means that many brokers who sell only a couple of properties a year will leave the industry. Only brokers who work in real estate as their main source of income will be able to survive the new rules. Buyers will only pay for the brokers who have the most experience and get the best deals. In the future, we could also see bonuses for the buyer's brokers in a slow market that may not be offered in a hot market.

We might even see the job of a buyer's broker disappear in a few years. There used to be tenant agents who helped people find places to rent. That job disappeared when people looking to rent began talking directly with companies that own the properties. This could happen to the buyer's agent too.

If you're confused about the new rules, it's because they're confusing. Sellers were not happy with the previous rules where they had to represent the buyer's best interest by paying a commission to the buyer's broker. They'll no longer have to do that.

The new rules will have big ramifications as buyers start experiencing the changing real estate market.

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• John Vincent, an automotive editor, bought a 2023 Jeep Grand Cherokee 4xe plug-in hybrid in 2022.
• He loves the SUV's versatility as both an electric car for short trips and a gas car for long drives.
• Despite some sound complaints, he's happy with his hybrid and wouldn't buy an EV just yet.

This as-told-to essay is based on a conversation with John Vincent, a 58-year-old automotive editor in Portland, Oregon. It has been edited for length and clarity.

My wife and I bought a 2023 Jeep Grand Cherokee 4xe plug-in hybrid in December 2022 for $75,000. As an automotive journalist and the senior editor of vehicle testing at US News and World Report, I test-drive dozens of vehicles every year. I still love the choice we made to purchase this full-size hybrid SUV.

When I was first shopping around, I was looking at the Kia Sorento hybrid, the Hyundai Santa Fe, the Mercedes GLC, and quite a few others.

This Jeep made the most sense for us because it's basically an electric car for short trips and a gas car for long trips. It's really inexpensive to operate, drives fantastic, and is very capable. It just does everything we were looking for.

The plug-in hybrid Jeep Grand Cherokee 4xe

While shopping, I considered the tax credits that were available at the time. There was a full $7,500 credit, and it made a lot of sense because of how we use the vehicle. The credit is not available anymore, but you can get some state, local, and utility credits for operating it.

My wife drives the car about half the time and can drive it to work and back daily on electricity alone. I think I only put four gas tanks in it last year — and the only reason I had to put gas in it was to protect the engine and the fuel delivery system.

We also have a Honda Odyssey, which is better for our dog. The Jeep is pretty high, and the dog weighs 50 pounds, so lifting the dog up and down in the SUV is difficult. With the minivan, the dog can just hop up inside.

I drive a high-trim model, the Summit, so it is basically a luxury SUV. The luxury model package, which costs around $13,000 more than the base model, has massaging seats and a great navigation system, as well as night vision for when we're on rural country roads, so it's pretty well-loaded. The only thing I wish it had that it doesn't is a lower price tag.

This Jeep can off-road, but I haven't done it yet. The number of miles we put on it is limited because I test other cars, but most of the miles I put on this Jeep are electric.

Driving electric with the hybrid

When we drive outside commuting and exceed its electric-only range, it operates like a normal hybrid and still gets great mileage, but we don't have to be reliant on an EV charger all the time, like with a pure EV.

The Grand Cherokee is a great vehicle, but with gas-only power the mileage is terrible, so the 4xe gets good mileage for a midsize SUV because it's a hybrid.

In a perfect world, you never notice the transitions between running on gas, running as a hybrid, or running as electric. In reality, you do feel those transitions in the Jeep more than you do in some other vehicles, but it's not obtrusive, and I learned to deal with it.

The biggest thing I've noticed is when it switches over to electric, it gets silent. All you hear is tire noise, which is just kind of weird to be gliding along silently.

Jeep and the EV market

People buy Jeeps not just because they want to go off-road, but because they want to know they can go off-road. People who buy EVs want to know they can go 300 miles between charges — not because they typically do, but because they want to have the option.

The public charging infrastructure is not quite ready to support that option for everyone. It's good enough in some parts of the country like California, Washington, and Oregon, where I live, but I would say in 40 of the 50 states, EV infrastructure is not good enough for me to buy one — yet.

We don't rely on it, though, because when the electric charge runs out, the Jeep switches over and acts like a normal hybrid. We never have and never would charge it at a public station.

I'm happy with my hybrid for now.

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• Ukraine is on the ropes amid a $60 billion US aid block. 
• Its leaders are issuing increasingly stark warnings that it faces defeat. 
• Defeat could take many forms, including the loss of key territories. 

With a $60 billion US aid bill blocked, Ukraine's battle against the Russian invasion is becoming increasingly desperate.

Its military is running critically short of artillery and ammunition, and it is being outgunned 10 to one is some places as it struggles to hold off intensifying Russian attacks.

There is a glimmer of hope for Ukraine, with a congressional vote that could release the aid package expected this weekend.

But if it fails, and Ukraine's European allies don't step up, Ukraine's defeat looks increasingly likely and could take a number of forms, say analysts.

Total defeat

Experts at US think tank The Institute for the Study of War, believe that Russia's President Vladimir Putin is pursuing "maximalist" objectives in Ukraine that amount to a "full Ukrainian and Western capitulation."

This might entail eventually seeking to seize control of the whole of the country.

Putin has repeatedly denied Ukraine's existence in speeches. Last year, he cited a 17th-century map of Europe to back his discredited thesis that Ukraine isn't a real country, despite the document clearly marking part of the territory as being "Ukraine."

In a blog post for the Royal United Services Institute, Oleksandr Danylyuk, a former chief advisor to Ukraine's Minister of Defense, noted that total destruction of Ukraine is Russia's main goal.

"Putin does not hide his genocidal intentions to destroy Ukraine as an independent state and Ukrainians as a separate people," he said.

"It is obvious that if Ukraine loses support from the West, Putin may well achieve his goal of destroying Ukrainians as a people and erasing the largest country from the map of Europe," he continued.

"Despite the obvious tragedy of this situation for Ukraine, the consequences of its defeat for the West and especially for the US as the leader of the free world would be no less catastrophic."

The loss of territories

Others believe that Russia's ambitions are more limited, and it has its sights set on launching a massive attack this summer to break through Ukraine's defensive lines and seize a key city or region.

A problem for Ukraine, Bryden Spurling, an analyst at the RAND Corporation, told Business Insider, is that it's unclear where the attack could come from.

"The difficulty with Ukraine being short of supplies and personnel is that it gives Russia more of an opportunity to pick the time and place of its offensive along a long battlefront," he said.

While it was apparent that Ukraine would focus its counteroffensive last year in the south, allowing Russia to build extensive fortifications to defend its positions, Russia's attack could come at any point along the 620-mile-long front line.

Russia could seek to seize control of Kharkiv, Ukraine's second biggest city, which is only around 18 miles from the Russian border, the city of Zaporizhzhia in south Ukraine, or secure control of the Donetsk region in east Ukraine, which has been the site of some of the war's bloodiest battles.

George Beebe, a former director of Russian analysis at the CIA, recently told BI that Russia was seeking to add to and consolidate its territorial gains.

"Russian 'victory' over Ukraine would probably consist of seizing territory east of the Dnieper River that Moscow regards as culturally and historically Russian, creating a strip of 'no man's land' separating Russian-controlled territory from the rest of Ukraine, and building extensively defensive fortifications to ensure that the division of Ukraine will be difficult to reverse through new Ukrainian assaults," he said.

But the question of when and on what terms negotiations to end the war might take place remains unclear.

Spurling, the RAND analyst, said that a Russian victory would most likely take the form of Ukraine ceding large amounts of conquered territory to Russia. But there is no sign that Ukraine would agree to such a deal.

"Despite the challenges they are currently facing, Ukraine shows little appetite for such a settlement – and many of Ukraine's supporters acknowledge that Russia can't be trusted to keep its side of any settlement anyway," he said.

A campaign against NATO

Some analysts, such as those at the ISW, have warned that Russia would likely use a settlement with a weakened and defeated Ukraine to rebuild and launch a renewed attack on Ukraine and then its allies in the West.

Other analysts are skeptical and believe that Russia's military has suffered such damage in the conflict that it would be in no position to launch a massive new campaign after the war against a strengthened NATO alliance.

But for Beebe, even if US aid is released, there won't be enough of it to turn the tide in the war and enable Ukraine to drive Russian forces out.

This implies that Ukraine, in any scenario, will have to cede territory, either formally or informally.

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• Jefferies hosted a conference to bring together late-stage tech founders, investors and bankers.
• At the conference, there was talk of IPOs and M&A being back.
• Jefferies has significantly bulked up its tech investing division in recent years.

As bankers and venture capitalists nibbled on caviar sushi and sipped champagne and sake this week at Nobu Malibu, there was a gleeful mood at the beachside closing dinner of the Jefferies Private Internet Conference.

IPOs and M&As are finally back, and on top of that, there is an exciting new catalyst for rising tech valuations — generative AI.

"We surveyed a lot of the 140 entrepreneurs that are coming here and found 'IPO' is not a dirty word anymore," said Cameron Jefferies, Co-Head of Technology, Media and Telecom Investment Banking at Jefferies. "People are thinking maybe they will go public."

After a Covid pause, Jefferies resumed this conference in 2022 to bring together late-stage tech founders, investors, and bankers. But there was not much to talk about in the way of actual deals. Now the logjam is finally breaking.

"We're as busy today as we were in 2021," said Jason Greenberg, Co-Head of Global Technology, Media, and Telecom Investment Banking at Jefferies.

"We ultimately succeed and get paid on the success of deals happening and closing. I don't think as many deals we're on today will turn into announced deals in 2024 or early 2025 compared to 2021. But even if they don't close at the same rate, you're going to see a market that was down 60% peak to trough recover a lot."

AI is driving many of those deals, according to Greenberg; The theme of this year's conference was "In the Age of AI."

"Beyond typical deal considerations, AI has emerged as the single biggest new influence today in tech M&A," according to Greenberg.

Reports that Salesforce is in talks to buy the $10 billion data management software firm Informatica is another sign dealmaking is back (though some people at the conference were skeptical the deal would ultimately go through).

This week, there was also promising news that Goldman Sachs reported its investment banking division saw fees rise 32% in the first quarter thanks to strong underwriting and advisory work growth.

"It's clear that we're in the early stages of a reopening of the capital markets," said David Solomon, the bank's chairman and CEO, told investors.

Reddit went public in March, though the stock is down from its opening price. Other companies in the IPO pipeline include Databricks. Epic Games, and Getir.

Aside from the lavish Nobu dinner, attendees at Jefferies also heard from Andreessen Horowitz cofounder Marc Andreessen and Anthropic's head of business development, Neerav Kingsland.

Jefferies has significantly bulked up its tech investing division to better compete against more established players like Goldman and JP Morgan Chase.

"In the last 18 months, we've increased the number of MDs [managing directors] in our investment bank by 70%, which is kind of crazy given what's happened to our industry in terms of the decline over the past couple of years," Lester said.

Now that deals are finally happening again, Lester is hoping the investment pays off.

"People don't typically choose a banker in a 30-day period," Lester said. "They choose it based on relationships built over a couple of years."

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• Doha Hamad International Airport in Qatar tops Stytrax's world's best airports list for 2024.
• Only European and Asian airports made the top 10, with none in the US even breaking the top 20.
• Skytrax named Newark Liberty International Airport's Terminal A the best new terminal of 2024.

In its 25th year of judging airports based on passenger surveys, the aviation ranking website Stytrax revealed on Thursday the world's best airports for 2024.

The results are based on customer surveys collected between August 2023 and March 2024 that ask about the airport experience from curb to gate.

Of 570 airports worldwide, Doha Hamad International Airport in Qatar beat out Singapore Changi Airport in what has been a back-and-forth battle for years. Doha won in both 2021 and 2022 but took second to Changi last year.

Among the top 10 were only European and Asian airports — none in the US made the cut. In fact, the only North American airport to break the top 20 was Vancouver International Airport in Canada at number 17.

Seattle-Tacoma International Airport was the highest-ranking US airport on Skytrax's 2024 list but came in at only number 24, according to Skytrax. It made the top 20 last year at number 18.

New York City metro airports, including LaGuardia Airport and John F. Kennedy International Airport, made the top 100 at numbers 33 and 93, respectively. Both have seen multibillion-dollar improvement projects in recent years.

Newark Liberty International Airport in New Jersey, meanwhile, notched an award for the best new terminal of 2024. The Houston airport system also won an award for having the world's best airport art.

Here's a closer look at Skytrax's top 10 airports in the world for 2024.

10. Istanbul Airport

Country: Turkey

2023 Ranking: 6

Skytrax Awards: Best Airport in Southern Europe, Best Airport Dining Experience

9. Zurich Airport

Country: Switzerland

2023 Ranking: 8

Skytrax Awards: Best Airport: 20-30 million passengers, The Cleanest Airport in Europe

8. Munich International Airport

Country: Germany

2023 Ranking: 7

Skytrax Awards: Best Airport Staff in Europe, Best Airport in Central Europe, Best Airport Hotel in Europe (Hilton Munich Airport)

7. Dubai International Airport

Country: UAE

2023 Ranking: 17

Skytrax Awards: None

6. Paris Charles de Gaulle Airport

Country: France

2023 Ranking: 5

Skytrax Awards: Best Airport in Europe, Best Airport in Western Europe, Best Airport: 60-70 million passengers, Best Low-Cost Airline Terminal (CDG Terminal 3)

5. Tokyo Narita International Airport

Country: Japan

2023 Ranking: 9

Skytrax Awards: World's Best Airport Staff, Best Airport Staff in Asia, Best Airport: 30-40 million passengers

4. Tokyo Haneda Airport

Country: Japan

2023 Ranking: 3

Skytrax Awards: World's Cleanest Airport, World's Best Domestic Airport, Best PRM and Accessible Facilities, Best Airport: 70+ million passengers, The Cleanest Airport in Asia

3. Seoul Incheon International Airport

Country: South Korea

2023 Ranking: 4

Skytrax Awards: World's Most Family-Friendly Airport

2. Singapore Changi Airport

Country: Singapore

2023 Ranking: 1

Skytrax Awards: Best Airport in Asia, Best Airport Immigration Service, Best Airport: 50-60 million passengers, Best Airport Hotel in the World and Asia (Crowne Plaza Changi Airport)

1. Doha Hamad International Airport

Country: Qatar

2023 Ranking: 2

Skytrax Awards: World's Best Airport, Best Airport in the Middle East, World's Best Airport Shopping, Best Airport: 40-50 million passengers, The Cleanest Airport in the Middle East

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• Mark Zuckerberg must really love his chain necklaces. 
• The Meta chief wore a rapper-style outfit to a Saturday UFC event.
• He then wore a similar outfit on Thursday when announcing Meta's new AI products.

Mark Zuckerberg isn't done channeling his inner Eminem just yet.

Zuckerberg wore a navy blue t-shirt and chain necklace while announcing his company's latest AI products on Thursday.

"Big AI news today," Zuckerberg said in a video he posted on Instagram.

But while Zuckerberg may have been hoping to hype up Meta's new offerings, people on social media found themselves drawn to something else — what appeared to be the billionaire's newfound love for rapper swag and "mob chic."

"Zuck looks like the type of guy that would steal your girl, deeply regret it, then try to help you win her back," one person wrote on X, formerly Twitter, on Thursday.

Some, on the other hand, felt that Zuckerberg could take his new look to the next level if he grew out his facial hair. This was after a doctored image of him went viral on social media.

"Zuck with a beard would become World Emperor in months, if not weeks," another person wrote on X.

Zuckerberg debuted his new look on Saturday when he attended the UFC 300 event with his wife, Priscilla Chan. At the UFC event, Chan leaned into the "mob wife" aesthetic, pairing her all-black outfit with a gold necklace.

To be sure, Zuckerberg isn't the only billionaire who has been reinventing their style.

Amazon founder Jeff Bezos got a major glow-up after stepping down as CEO of the e-commerce giant.

Apart from getting super fit, Bezos also makes plenty of bold fashion choices with his fiancé, Lauren Sánchez. The couple turned heads when they sported the "mob chic" look at the Dolce & Gabbana Party at the Milan Fashion Week in January.

The stark shift in clothing choices by tech titans Bezos and Zuckerberg reflects a growing preference for the trappings of loud luxury.

In the past year, Zuckerberg has ditched his stale uniform of gray t-shirts and hoodies for more adventurous choices like a shearling brown jacket. And it looks like he's eager to trade fashion tips with his billionaire brethren.

"Jersey swap," he wrote in an Instagram post last month, along with a photo of him trading jackets with Nvidia CEO Jensen Huang.

Representatives for Zuckerberg at Meta did not immediately respond to a request for comment from Business Insider sent outside regular business hours.

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• Bad news for Apple: iPhones have yet another new competitor in China.
• Huawei just released a new line of smartphones called the Pura 70.
• The devices give Chinese consumers another reason to abandon their iPhones.

Tim Cook would like you to think everything is going swimmingly for Apple in China.

A highlight reel of the Apple CEO's recent trip to the country, posted to his Weibo account, showed him being papped by fans at the opening of a new store in Shanghai's Jing'an district, taking selfies on an iPhone with celebrity models, and casually strolling the historic Bund.

"Every time I am in China, I can feel the unique charm here again. Thank you very much for the warm reception!" Cook wrote in the social media post.

Here's the thing. The Apple chief actually had a major dilemma facing him in China at the time he posted the video last month: iPhone sales were down by an alarming 24% in the first six weeks of the year, per data from Counterpoint Research.

And despite the charm offensive from Cook, there's a risk that downward spiral is about to get a whole lot worse.

On Thursday, Huawei released a new series of smartphones called the Pura 70. They come fitted with an advanced new camera system that looks similar to the trio of lenses on the back of the iPhone Pro models, and starts at $760.

Critically, the new phones give Huawei a fresh opportunity to take a bigger bite out of Apple's share of the China smartphone market. It's already won over some consumers since launching the Mate 60 Pro series last year.

The Mate 60 raised some fears in the US last year after the discovery that they were being powered by advanced chips that Washington had sought to prevent China obtaining by imposing tight export controls.

Those chips, made domestically, helped Huawei make huge gains in China by enabling features that rival those seen in iPhones. They're now believed to be in the new Pura 70 devices too, per Reuters, which spoke to a customer who tested their network speed.

Counterpoint estimated a 64% surge in smartphone sales for Huawei in the first six weeks of the year. The Pura 70 could continue that momentum. Ivan Lam, senior analyst at Counterpoint, told Reuters he thinks Huawei could almost double phone shipments this year to 60 million units.

This is not the sort of thing Apple wants to hear, of course.

China has been its most important international market for several years, but that's under threat from the rise of domestic rivals that can entice Chinese consumers with devices that look and feel nearly identical to iPhones.

Apple has already shown weakness in the face of domestic competition in China. Net sales in the Greater China region were $20.8 billion in the final three months of last year, down from $23.9 billion in the same period of 2022.

Wedbush analysts wrote last week that Apple is "navigating one of the more difficult China demand environments we have seen the last five years." They expect another decline in iPhone sales in the region in Apple's quarterly earnings on May 2.

Cook might be putting on a brave face, but iPhone sales in China may keep sliding if Huawei has its way.

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• Apple has removed WhatsApp and Threads from its Chinese app store following a government order.
• WhatsApp has been blocked in China since 2017 and its parent company Meta since 2009.
• Other Western platforms like Gmail, YouTube, Snap, and Spotify have also been censored in China.

Apple removed WhatsApp and Threads from its app store in China after being told to do so by the Chinese government, according to the Wall Street Journal.

China's top internet regulator asked Apple to remove the two apps because of national security concerns.

"We are obligated to follow the laws in the countries where we operate, even when we disagree," an Apple spokesperson told The Journal.

The Chinese government has blocked WhatsApp since 2017, while its parent company, Meta, has been blocked since 2009. Other Western media platforms, including Gmail, YouTube, Snapchat, and Spotify, have also been censored in China.

Some users find ways to access these platforms through virtual private networks, but removal from the app store may prevent this.

Apple did not immediately respond to Business Insider's request for comment sent outside normal business hours.

A Meta spokesperson referred BI to Apple for comment.

WhatsApp has over 2 billion users globally, while Instagram Threads, which launched in July, has over 130 million global users, CEO Mark Zuckerberg said in February.

China is an important manufacturing and consumer market for Apple. CEO Tim Cook visited the country last month to open a new store in Shanghai and rub elbows with top policymakers. That visit came after iPhone sales dropped earlier this year. And in January, Chinese chipmakers drew up plans to create chip production lines to supply processors to local smartphone makers. The move stands to hurt Apple, which has so far benefited from tight export restrictions.

China's direction to Apple comes as US policymakers debate a ban on TikTok, the popular Chinese app. Some lawmakers are concerned about data harvesting and political influence. The bill would prevent Apple and Google from distributing TikTok's app in their app stores and ban US websites from hosting TikTok.

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• Oil prices jump and stocks sink on reports of escalating Middle East tensions.
• Israel struck Iran early Friday morning, multiple agencies reported, citing US officials.
• Potential wider conflict in oil-rich Middle East could disrupt energy supplies.

Oil prices jumped while stocks sold off after reports of an escalation in Middle East tensions.

Israel struck a site in Iran early Friday morning, multiple outlets reported, citing US officials.

International benchmark Brent crude oil futures rose as much as 4.2% before trading 2.8% higher at $89.54 a barrel at 11:15 p.m. EDT. US West Texas Intermediate futures were 3.2% higher at $85.40 a barrel.

The strike on Friday came days after Iran attacked Israel on Saturday with a barrage of more than 300 missiles and drones. On April 1, Iran's embassy in Damascus, Syria, was hit with a strike. Israel didn't claim responsibility for the strike, but Iran held it accountable and vowed retaliation.

Earlier this week, Israel pledged retaliation over Iran's missile and drone attack. Oil markets shrugged off Iran's attack on Israel as the market assessed the conflict would remain contained. Friday's reports changed this.

Markets have been on edge over fears of a widening of the conflict in the Middle East — a major oil-producing region. A broader conflict could disrupt energy supplies, which could impact the global economy.

If the reports turn out to be true, "fears over further escalation will only grow, as well as concerns that we are potentially moving closer towards a situation where oil supply risks lead to actual supply disruptions," ING commodity strategists wrote on Friday.

"It's a shoot first and ask questions later dynamic for investors. This is Israel's 'tat' to Iran's 'tit,' and the fear is that this tit-for-tat situation could spiral further out of control," Kyle Rodda, a senior market analyst at Capital.com, an online trading platform, told Business Insider.

"Iran seems to be downplaying the attack for now, which says to me that it does not wish to inflame the situation further and create conditions in which it will be forced to retaliate with equal or greater force," Rodda said.

"However, the event is fresh and fluid, so uncertainty prevails," he added.

Stock markets are also selling off on the news while the price of gold, a safe haven, rose to near a record high.

US stock futures fell, with S&P500 down 1.3%.

Japan's Nikkei 225 index was 3.5% lower at 11:16 a.m. local time.

The spot gold price was 1.2% higher at $2,406.92 an ounce.

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• Russia has been fortifying its Black Sea Fleet naval base, says the UK's defense ministry.
• The ministry added that the Black Sea Fleet has become less active after its commander was replaced.
• Russia's navy has suffered significant losses since the Ukraine war began in 2022.

Russia has been beefing up the defenses for its Black Sea Fleet naval base in Novorossiysk, the UK's defense ministry said in an intelligence dispatch on Thursday.

The "maintenance, logistics and weapons-handling infrastructure at Novorossiysk has highly likely been improved," the ministry wrote in an X post, citing a satellite photo it had obtained.

The UK's defense ministry noted in its update that the Black Sea Fleet "has largely withdrawn its ships and submarines from Sevastopol further eastwards to Novorossiysk."

Basing the fleet at Novorossiysk, the ministry said, was the fleet's "best method of avoiding Ukrainian sea-borne attack."

Russia's naval forces have suffered significant losses since the Ukraine war began in February 2022. In February, the head of the UK's armed forces, Admiral Sir Tony Radakin estimated that 25% of Russia's vessels in the Black Sea had been sunk or damaged.

Ukraine's success in naval warfare also resulted in the replacement of the Black Sea Fleet's former commander, Admiral Viktor Sokolov, with Vice Admiral Sergei Pinchuk.

"The fleet has been the least active since the war began," the UK's defense ministry said on Thursday, noting that the shift had taken place following Sokolov's removal in March.

The focus on the Black Sea, by both the Russians and Ukrainians, underscores the importance of the maritime trading route. For Ukraine, access to the Black Sea has been critical for exporting the country's grain and foodstuffs.

This isn't the first time the Russians have tried to shore up their naval defenses to stave off future Ukrainian attacks.

Last month, the UK's defense ministry said it had "identified four barges positioned at the entrance to the Black Sea Fleet facility of Novorossiysk Sea Port."

"Pinchuk, has likely sought to improve the survival chances of Russian vessels by adopting further preventative and defensive measures, including narrowing the entrance gap to port facilities," the UK defense ministry wrote on March 31.

Representatives for the Russian defense ministry did not immediately respond to a request for comment from Business Insider sent outside regular business hours.

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