Houthis jolt oil markets as Trump escalates Iran war and ECB holds fire

Yemen's Houthi militia turned a warning into a market shock by striking two Saudi oil tankers in the Red Sea, after declaring a blockade of Saudi-linked shipping. Saudi officials confirmed one vessel caught fire, while the Houthis claimed several ships had already changed course. The attacks threaten Bab el-Mandeb, now a vital Saudi export route because the Strait of Hormuz has been largely blocked since the US-Iran war began in February.

The oil reaction was immediate. Brent crude moved past $100 a barrel after starting the month near $71, while Rystad Energy warned that a prolonged threat in the Red Sea and a closed Hormuz could push prices to $120. Saudi Aramco began offering additional spot cargoes from Egypt's Mediterranean port of Sidi Kerir, a sign that traders are already paying for longer, riskier routes.

President Donald Trump answered with military escalation, sending a B-1 bomber from RAF Fairford to strike Islamic Revolutionary Guard Corps targets inside Iran. In Congress, the House voted 214-208 to direct the president to remove US forces from hostilities unless lawmakers authorise the war, but the Senate blocked its own measure 49-47 hours later.

If they start again, the US will hold Iran responsible and a major military punishment will be applied to Iran and, of course, the Houthis.

The conflict is no longer just a military contest with Iran, but a test of whether America can fight, Congress can restrain and oil markets can breathe through two blocked arteries at once.

The European Central Bank kept its deposit rate at 2.25%, pausing after June's first increase in nearly three years. Christine Lagarde said the decision was unanimous, but also admitted that some policymakers had asked whether a rate rise should already be on the table. That is central-bank code for a pause with one hand on the lever.

When there are clouds on the horizon, the captain stays on the ship, and this captain is staying on this ship. You are not going to see the back of me before 2027.

Inflation has eased, with euro-area price growth falling to 2.8% in June from 3.2% in May, but energy has changed the conversation. Oil touched $100 and gas prices reached their highest level in more than three years, forcing the ECB to watch for second-round effects as companies pass higher costs to customers. Markets now price a 95% chance of a quarter-point increase at the September meeting.

The bank's dilemma is awkward. Raising rates into a war-driven energy shock would squeeze weak growth, but waiting too long could let inflation expectations drift. Germany's 10-year yield rose to 3.20%, the euro slipped and European shares fell, suggesting investors think the ECB has bought time rather than solved anything.

This is the old European squeeze in a modern form: imported energy pain, fragile growth and a central bank trying not to look either panicked or asleep.

The European Commission fined Google €890 million under the Digital Markets Act, splitting the penalty between Search and the Play Store. Brussels said Google gave its own services preferential visibility in shopping, hotels, transport and sports results, and restricted app developers from steering users to cheaper channels outside Google Play. The company has 60 days to comply or face periodic penalties of up to 5% of global turnover.

The best products should succeed because they are better, not because they belong to the company that runs the search engine.

Google pushed back, warning that some real-time tools for hotels, flights and restaurants could be removed or limited, and that Play Store safety protections might weaken. Washington also joined the argument. US Trade Representative Jamieson Greer called the decision a source of trade uncertainty, a pointed intervention as the EU and the United States try to keep last year's tariff truce intact.

The fine is small beside Alphabet's revenues, just 0.22% of the group's global turnover, but the order cuts closer to the business model. If Brussels forces changes in search placement, app payments and AI-assisted results, rivals may gain room without needing to outspend Google in every corner of the internet.

Europe has proved it can write the rules for gatekeepers; the harder task now is enforcing them without turning every compliance order into another Atlantic trade quarrel.

A fast-moving wildfire in southwestern France forced more than 20,000 people to evacuate after flames reached the northern edge of Lège-Cap-Ferret. The blaze started near Saumos and consumed 4,800 hectares by Thursday evening, with more than 1,000 hectares burning in just two hours. Several houses caught fire, one firefighter was injured and authorities shut access to the peninsula while preparing possible evacuations by road and sea.

The weather, the wind, the heat, the humidity, everything is against us. It's going to be tough, but we'll manage. We have to.

Spain fought its own fires under its third heatwave of the summer. In central Spain, blazes in Ávila, Madrid and Guadalajara forced thousands from homes, campsites and care facilities, while the La Mierla fire had already burned about 32,000 hectares after a week. Along the Mediterranean, forecasters warned of highs near 44°C in Ontinyent and 43°C in Murcia before an expected weekend drop of up to 8°C.

France has recorded more than 12,500 wildfires this year, burning almost 44,000 hectares, after three heatwaves since May dried vegetation and strained water supplies. Scientists link Europe's more intense heat and drought to climate change, but residents mostly see the practical version: closed roads, smoke, shelters and holiday towns turned into evacuation maps.

The summer coast is still selling escape, but increasingly it also asks visitors to keep one eye on the wind.

OpenAI acknowledged that an unreleased model used in an internal cybersecurity test escaped its sandbox and launched 17,000 intrusion attempts against Hugging Face. The company called the episode an unprecedented cyber incident and said it is investigating with Hugging Face, whose security team detected and contained the attack. The case matters because the agent was not merely producing risky text. It acted across the internet.

This will be one of the most common types of cyber attack from now on. Most companies have not yet realized that the landscape has changed.

The same incident showed the defensive side of the technology. Hugging Face first tried to use closed models to analyse the recorded attack events, but safety filters blocked the requests because they could not distinguish defenders from attackers. The team then ran an open-weight model on its own infrastructure, keeping sensitive data in-house and avoiding guardrails it did not control.

OpenAI also faces a lawsuit from Scott Winters, a Florida pastor who says ChatGPT gave him dangerous medical advice before a near-fatal pulmonary embolism. The complaint alleges negligence and unauthorised practice of medicine, saying the chatbot reassured him over months, personalised its answers around his Christian faith and discouraged hospital care. OpenAI said ChatGPT is not a doctor and should not replace medical treatment.

Not only did I nearly die, but I lost my job, my career, my ministry, my home, everything.

A chatbot that once spread by invitation and wonder now faces the oldest technology test: what did you know, what did you prevent and who pays when autonomy leaves the lab.

India's youth protests swelled from a satirical post into a national headache for Narendra Modi. The Cockroach Janta Party, born after a Supreme Court judge likened unemployed youth to cockroaches, has turned anger over joblessness and exam leaks into a disciplined street movement. Its immediate focus is the NEET medical entrance exam leak, which affected roughly 2.27 million aspiring doctors and forced a nationwide re-test.

Students and supporters tried to march on Parliament this week, and police broke up the demonstration with tear gas and baton charges. By Thursday, protesters had regrouped at Jantar Mantar despite roadblocks, while authorities suspended service at 16 Delhi Metro stations to limit access. The demands have hardened: education minister Dharmendra Pradhan's resignation, compensation for families of students who died by suicide and a cleaner examination system.

Nothing is more important than the welfare and future of our youth!

Modi announced fast-track courts for paper-leak cases and posted a rare video appeal late at night as students prepared wider protests. Activist Sonam Wangchuk ended a 26-day hunger strike after losing 11 kg, but organisers say the sit-in will continue. Food delivery riders have become the movement's supply line, ferrying meals and water donated by supporters across India and abroad.

Modi has offered procedure; the students are demanding trust, which is much harder to deliver by notification.