US sinks Iranian warship thousands of miles from Gulf

The war between the United States and Iran intensified dramatically on Wednesday after an American submarine sank an Iranian warship near Sri Lanka, killing at least 80 sailors, and NATO air defenses intercepted an Iranian ballistic missile heading toward Turkey. The developments signaled a sharp expansion of a conflict that began five days earlier when the United States and Israel launched a military campaign against Iran, triggering hundreds of deaths and shaking global markets.

The missile incident marked the first time Turkey, which borders Iran and has NATO’s second largest military, was directly pulled into the fighting. U.S. Defense Secretary Pete Hegseth said there was no indication the episode would activate NATO’s collective defense clause.

Hegseth confirmed that the U.S. submarine strike targeted an Iranian vessel off Sri Lanka’s southern coast, far from the Gulf region, as combat continued to paralyze shipping through the Strait of Hormuz for a fifth straight day. The disruption has severely restricted Middle Eastern oil and gas exports. President Donald Trump pledged to provide insurance guarantees and naval escorts for energy shipments to curb rising costs. Oil prices remained at their highest level in over a year, while roughly 200 vessels were still anchored offshore, according to Reuters estimates.

The United States and Israel continued sustained strikes on Iranian targets. Speaking at the Pentagon, Hegseth said Washington held the upper hand.

“This was never meant to be a fair fight, and it is not a fair fight. We are punching them while they’re down,” he said, adding that U.S. forces could maintain operations for as long as necessary.

General Dan Caine, chairman of the Joint Chiefs of Staff, said Iran’s reduced missile launches suggested its military capacity had been significantly weakened.

Reflecting that assessment, the Israeli military announced it would ease certain public safety restrictions from Thursday through Saturday, allowing businesses to reopen if located near shelters, though schools would remain closed. Israeli aircraft also struck a compound in eastern Tehran that housed Iran’s main security bodies, including the Republican Guard, intelligence units, cyber warfare divisions and internal police responsible for suppressing protests.

Israel also urged residents to evacuate parts of southern Lebanon as it intensified attacks on the Iran backed group Hezbollah, which had launched drones and rockets into Israel earlier in the week.

Financial markets reacted sharply. Asian shares plunged, including a record drop in Seoul, amid doubts about how quickly the crucial shipping corridor would reopen. European markets later steadied after two days of heavy losses, and U.S. stocks finished higher on hopes the conflict might wind down. Sentiment improved after a report in The New York Times claimed Iranian intelligence had contacted the CIA early in the war to explore a possible resolution. Iran’s semi official Tasnim News Agency dismissed the report as psychological warfare.

As explosions echoed across Tehran, uncertainty surrounded funeral plans for Ali Khamenei, 86, who was killed by an Israeli airstrike on Saturday in the first assassination of a sitting national leader by air attack. Authorities postponed three days of mourning ceremonies indefinitely, and no funeral date has been set.

Two Iranian sources told Reuters that Mojtaba Khamenei was outside Tehran at the time of his father’s death. Iran’s Assembly of Experts, responsible for choosing the next supreme leader, is expected to announce a decision soon. Member Ahmad Khatami said candidates had already been identified but did not disclose names.

Other possible successors include Hassan Khomeini, a prominent reformist figure. However, Mojtaba Khamenei is widely viewed as the leading contender, having consolidated influence within the security establishment and its vast economic network. His selection would signal continued dominance by hardliners.

While some Iranians have quietly celebrated the supreme leader’s death, others say widespread protest is unlikely amid ongoing bombardment and heavy security. “We have nowhere to go to protect ourselves from strikes. How can we protest?” said Farah, a 45 year old Tehran resident who asked to use only her first name. “They are everywhere. They will kill us. I hate this regime, but first I have to think about the safety of my two children.”

U.S. Central Command reported it had struck or sunk more than 20 Iranian vessels, including the frigate IRIS Dena off Sri Lanka. A Sri Lankan official said the ship had been returning to Iran from eastern India. Authorities reported 87 bodies recovered and 32 survivors rescued, with around 60 sailors still missing from a crew of roughly 180.

Despite reservations about the war, several European nations have deployed forces to safeguard their citizens and interests. Britain and France announced they would use naval and air assets to help defend against potential Iranian retaliation, and Greece has repositioned aircraft and warships to nearby Cyprus as the conflict’s reach continues to widen.