Good morning. The conflict with Iran is triggering a surge in demand for war insurance in the Middle East, while sparking fights over rising premiums and what’s covered by existing policies.

• Businesses forced to pay up: Standard commercial policies, such as property, cyber and business-interruption insurance, typically don’t include war-related damage. That means companies now have to pay increasingly steep rates to get protection against threats such as missile strikes.
   
• Why they need it: As the war enters its second month, there is a lot at stake for insurers and regular businesses across the Middle East: Losses for buildings, infrastructure and ships could run into the billions of dollars if the conflict drags on.
   
• Rush to insure: Companies are rushing to take out new war coverage. “Most insurers have seen well over 300 new submissions in the last few weeks,” said Fergus Critchley, global head of terrorism and political violence at broker WTW.
   
• Prices soar: War-risk cover for real estate in the Persian Gulf now typically costs 6% to 8% of a property’s value, compared with well under 1% in peacetime, according to Sachin Sahni, an insurance analyst at S&P Global Ratings.
   
• Background: The scramble comes after many businesses in the Gulf dropped war-risk cover in recent years to reduce their premiums, brokers said, trusting the region’s reputation as a haven from political turmoil.

The first criminal trial in alleged Russian scheme that snared global banks.

A French court conducted the first international criminal trial for Dmitry Klyuev, accused of a 2007 Russian corruption scheme, Bill Alpert writes for Barron’s. 

Klyuev, a Russian citizen, allegedly masterminded a $230 million theft from Russia’s treasury, leading to Sergei Magnitsky’s death and inspiring global sanctions laws. Danske Bank paid a $2 billion fine and its stock sank 49% for its role.

Exxon scientists had doubts about algae biofuels. The oil giant touted them anyway.

Exxon Mobil’s scientists delivered a grim message to one of the oil company’s top strategic-planning executives in February 2020: Its much-heralded algae biofuels program was falling well short of its stated goals, documents reviewed by The Wall Street Journal show.

A week later, Exxon told investors algae could become a more prolific source of biofuel in the near term than agricultural products such as sugarcane and palm. That alarmed the scientists who didn’t agree with the way the data were presented to investors, according to people familiar with the matter.

The Journal reviewed an internal presentation made in early 2020 by Exxon’s scientists and examined other documents related to Exxon’s efforts on algae. Some of the documents show executives knew the $500 million algae research project wasn’t meeting its goals outside the lab, even as they continued to promote it to investors as a potential boon.

• Risk Journal reports: A bipartisan group of U.S. senators and House members called on Secretary of State Marco Rubio and Treasury Secretary Scott Bessent to reimpose sanctions on Republika Srpska President Milorad Dodik, warning Washington’s decision to delist him in October emboldened his secessionist behavior and undermined U.S. credibility in the Western Balkans.
   
• A Trump administration proposal to get private equity into Americans’ retirement plans is stronger and further-reaching than all but a few optimists on Wall Street had hoped, attorneys and policy experts say. But some still question whether it will be enough to persuade savers and retirement-plan sponsors to take the plunge into alternative assets.
   
• The European Union is investigating a French plan to subsidize the construction and operation of six new nuclear reactors by Electricite de France.
   
• An Italian arms dealer pleaded guilty Monday to conspiring to illegally export more than $540,000 worth of American-made ammunition to Russia via Kyrgyzstan, the Justice Department announced.
   
• The Trump administration can’t end federal funding for public media via an executive order, a federal judge ruled Tuesday, siding with National Public Radio and Public Broadcasting Service in their challenges.
   
• Federal investigators linked Ford’s BlueCruise hands-free driving system to two fatal 2024 crashes that killed three people.

Trump tells aides he’s willing to end war without reopening Hormuz.

President Trump told aides he’s willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed, administration officials said, likely extending Tehran’s firm grip on the waterway and leaving a complex operation to reopen it for a later date.

In recent days, Trump and his aides assessed that a mission to pry open the chokepoint would push the conflict beyond his timeline of four to six weeks. He decided that the U.S. should achieve its main goals of hobbling Iran’s navy and its missile stocks and wind down current hostilities while pressuring Tehran diplomatically to resume the free flow of trade. If that fails, Washington would press allies in Europe and the Gulf to take the lead on reopening the strait, the officials said.

• U.A.E. Wants to Force Hormuz Open and Is Willing to Join the Fight
• Third U.S. Aircraft Carrier Deploys to Middle East
• Iran War Chokes Off Helium Supply Critical for AI
• Malaysia Says Iran Allowing Its Vessels to Pass Through Strait of Hormuz Toll-Free
• Eurozone Inflation Jumps as Iran War Raises Energy Prices
• Consumers’ Mood Steady Amid Iran War, Conference Board Survey Suggests

Financial players continue to face risk amid debanking push, former official says.

Banks and financial companies could face legal action over their decisions to drop customers as the Trump administration continues to focus on debanking, a former federal enforcement official said.

Financial industry players, including those not regulated as chartered banks, could be hit with fines or other legal action over debanking, former Office of the Comptroller of the Currency enforcement head Will Jauquet said Tuesday.

“There certainly could be actions here if they find sufficient evidence,” Jauquet, now a partner at the law firm Morgan Lewis, said at a Dow Jones Risk Journal webinar, referring to federal regulators.

• Thousands have sued, hoping to get their money back quickly after U.S. tariffs were invalidated. But the process is going to be slow and messy.
   
• AT&T agreed to a deal worth up to $2 billion to improve the federal emergency cellular network it runs for the Commerce Department, promising system upgrades and lower rates in exchange for faster government approvals.
   
• A string of Japanese islands stretches across the East China Sea and stops less than 70 miles from Taiwan. Beijing’s ambitions to absorb Taiwan have become a core security challenge for Japan. Japan is now doubling down on a shift to its strategic southwest.
   
• A Russian tanker carrying 730,000 barrels of oil docked early Tuesday in the northern Cuban port of Matanzas, bringing some brief relief to the fuel-starved island as its economy comes to a grinding halt.
   
• Oracle began to significantly reduce its workforce Tuesday while it continues to build out costly data centers for artificial-intelligence development.
   
• Just how much are 12 metric tons of stolen KitKat bars worth? A lot of promotional gold, it turns out.

• OpenAI completed the largest funding round in Silicon Valley history, raising $122 billion ahead of a blockbuster IPO expected by the end of the year.
   
• The Supreme Court on Tuesday sided with a Christian counselor who challenged a Colorado ban on mental-health counseling that seeks to change young people’s sexual orientation or gender identity.
   
• A U.S. firm has finally acquired one of the world’s largest cobalt producers not already in China’s hands, marking a significant win for the Trump administration.
   
• A federal judge in Washington, D.C., blocked construction of President Trump’s White House ballroom.
   
• Jamie Dimon thinks the American dream is on life support—and he is planning for JPMorgan Chase to step in.