A recent Bloomberg article with the eye-catching headline ‘Russia’s Push to Replace Dollar With China’s Yuan Collapses’ purports to demonstrate that Russia has abandoned attempts to replace the dollar with the yuan due to US sanctions.

It points out that the share of the yuan in payments for Russian exports has been cut in half this year to 22%, from a peak in mid-2024, when the US expanded secondary sanctions. The article goes on to demonstrate at length the problems Russian businesses are having with yuan payments, boasting that Chinese banks shied away from dealing with Russia after the US threatened secondary sanctions.

Has the West finally succeeded in stifling Russia’s access to foreign-currency markets? RT examines what’s really going on and exposes the gap between Western hopes and economic reality.

The yuan share plummets

Bloomberg cites the beginning of the pivot away from direct yuan settlement with the threat of US secondary sanctions in mid-2024, calling this a demonstration of America’s “ability to enforce its political will, even with the world’s second-largest economy.”

Russian businesses did find themselves in a bind with payments often blocked or returned. Cumbersome workarounds had to be found. Russian banks, which had begun lending in yuan in lieu of dollars or euro, were forced to pull back.

The result, according to Bloomberg, is that the share of the yuan in direct settlement of Russian exports has fallen sharply, reaching 22% this year.

That Russia has had significant problems with yuan payments is beyond dispute and openly admitted by Russian officials.

What the Bloomberg journalists didn’t feel any need to explain, however, was a paradox they themselves introduced right at the outset of the article: Russia’s trade with China is growing even as the yuan has plummeted as a settlement currency for Russian exports.

Not just are Russian-Chinese trade volumes growing, they are doing so at a brisk pace. Chinese customs data for the first nine months of 2026 shows a 30.6% year-on-year increase in the dollar value of bilateral trade to around $214 billion.

So clearly the drop in direct yuan payments has not caused the underlying trading relationship to collapse.

Bloomberg does mention one rather interesting statistic: The share of the ruble in settlement for Russian exports to Asia has surged to 69%, up from 47.6% the year before. A country breakdown is not provided and China cannot be fully equated with Asia, but given that China is Russia’s largest trade partner and responsible for a third of its foreign trade, it is a fair bet that Russia is being paid in rubles for a lot of its trade with China.

The Russian central bank’s second-quarter 2026 balance-of-payments assessment confirms the broader trend. It shows a consistent, across-the-board rise in ruble settlement for foreign trade: 63% of incoming export payments were in rubles, up from 53% the year before. The share of ruble payments from Asian countries reached 62%, while rubles accounted for 55% of import payments.

Bloomberg references the rising ruble share but leaves it completely hanging. So this raises a few questions that Bloomberg made no effort to answer. If bilateral trade remains strong but yuan settlement for Russian exports has decreased, how exactly is settlement taking place? Are the two countries netting obligations? Are they netting through intermediaries? Or are other assets, such as gold, being used to reconcile the accounts? We aren't told. 

Netting: An alternative

In April 2025, Reuters reported that major Russian banks had established a special system for China-related transactions known as the China Track. The system uses payment agents to handle export and import transactions, which are then centrally balanced by the participating banks, thus avoiding the need for SWIFT or accounts held with Western banks.

The principle is fairly simple. Imagine that China buys $100 million worth of Russian oil, while Russian companies purchase $80 million worth of Chinese machinery. Rather than transferring the export proceeds back to Russia and then arranging a separate payment to China, the two obligations can be offset against one another. The export proceeds are used to finance the imports, leaving only the residual balance to be settled.

This is important because netting is a more mundane, but potentially much more consequential, development than the emergence of some entirely new international currency.

It means that substantial volumes of bilateral trade can take place without the corresponding payments having to pass through conventional international banking channels. The system does still require banks and mechanisms for reconciling outstanding obligations, but it reduces the need for money to cross borders in the traditional way.

The gold connection

One statistic that is worth noting, meanwhile, is that Russian gold has been flooding Hong Kong this year. Trade data shows that Hong Kong imported around 100 tonnes of gold from Russia during the first seven months of this year. This is nearly three times the amount shipped during the same period last year.

So we have an explosion in Russian gold exports through Hong Kong while actual Russian-Chinese trade has continued to grow. Crucially, much of this gold subsequently travels to mainland China. Might there be a connection? This looks very much like a potential alternative channel for squaring residual balances outside of conventional banking channels.

However, we can’t know for sure that this is happening. It should also be mentioned that Russia has been a major seller of gold this year, which is connected with its budget deficit. Central Bank Governor Elvira Nabiullina explained in September that the reduction in Russia’s gold reserves was mainly connected with Finance Ministry operations involving the National Wealth Fund under the government’s budget rule. In effect, the state is drawing on its gold holdings as part of the mechanism for managing the budget deficit.

Gold is a very suitable asset for settling residual balances, and it can be done at the state or central-bank level. It could be used to settle what remains after China Track netting. If Russia and China are going down this route, gold would then function as the ultimate settlement asset, while rubles and yuan would simply be transactional currencies.

Final thoughts

Western media coverage tends to ask whether Russia is succeeding or failing at replacing the dollar with another currency, which presupposes that the essential architecture remains unchanged. Bloomberg operates out of exactly that framework, presenting the declining yuan share in Russian exports as evidence of a failed attempt to internationalize the yuan.

This is a dubious assumption. A more fundamental question is whether the architecture itself is changing. Perhaps currency statistics are no longer giving us a complete picture of how international value is being transferred. Perhaps we’re bumping into the limitations of thinking about monetary realignment primarily in terms of competing national currencies.

What we are seeing is that a growing volume of international trade is taking place that doesn’t require the same financial architecture that historically made the dollar indispensable.

Russia and China remain at the forefront of that process, whatever the fluctuating breakdown of currency settlement might be. 

The EU risks driving investors and their money out of Europe over plans to use frozen Russian assets to fund Ukraine, Euroclear CEO Valerie Urbain has warned.

The bloc has frozen around €210 billion ($232 billion) in Russian central bank assets since 2022, most of it held at Belgian-based Euroclear. While the EU has already diverted profits from the funds to Ukraine, it has stopped short of seizing the assets outright over legal concerns. Moscow has condemned both measures as theft.

In an interview with Belgian newspaper Le Soir published on Friday, Urbain said previous debates over the assets had already unsettled international investors.

“I have noticed that many investors followed last year’s debates and are now wondering whether Europe is still capable of respecting the rule of law,” she said.

Urbain warned of a “reputational risk” that could lead to “some deposits leaving Europe,” stressing that investor confidence depends on legal certainty and the protection of assets.

“You cannot simply ‘transfer’ the assets and forget about the liabilities. That would create an enormous imbalance and lead to Euroclear’s bankruptcy,” she said.

Urbain explained that Russian securities had matured into cash under sanctions, leaving Euroclear liable to repay Moscow around €185 billion – more than 80% of its balance sheet. Transferring both assets and liabilities would still carry legal risks, she added.

Belgium has repeatedly resisted confiscation proposals. Last month, Prime Minister Bart De Wever said he did not expect the European Commission to revive the plan, although individual member states could still push for it. EU leaders instead agreed last December to borrow €90 billion jointly to support Ukraine.

In May, a Moscow court awarded the Russian central bank around €200 billion in damages in a lawsuit against Euroclear. Earlier this month, Belgian newspaper L’Echo reported that the bank had sought a court order to seize documents from Euroclear’s Brussels headquarters over alleged coordination with EU institutions on sanctions.

The European Central Bank and International Monetary Fund have previously raised concerns that seizing Russian assets could undermine financial stability and confidence in the euro.

Russia’s Foreign Intelligence Service (SVR) issued a similar warning in September, saying confiscation would damage Europe’s standing among major investors, including China, India, Saudi Arabia, the UAE, and Singapore.

Russian Foreign Minister Sergey Lavrov has accused Western nations of “outright robbery,” declaring that trust in them has been “completely lost.”

German auto giant Mercedes-Benz has frozen investment in its domestic factories and is considering plant closures, according to an internal memo cited by multiple media outlets. The decision comes as high production costs and fierce competition from China squeeze Germany’s struggling car industry.

In the memo published on the company’s intranet on Thursday, production chief Michael Schiebe reportedly said current cost structures make further investments in Germany impossible.

Manufacturing labor in the country can cost up to five times as much as at Mercedes’ Eastern European facilities, according to industry data.

Months of negotiations with employee representatives over proposed labor-cost cuts have failed to produce an agreement.

Britta Seeger, the board member in charge of human resources, warned that the company is now “forced to examine, in concrete and detailed terms, which sites in Germany we can still afford to maintain.” According to the memo, she said management wants to avoid plant closures at all costs but must consider the option more seriously.

The investment freeze could affect factory upgrades, expansion, and preparations for future car models. It does not mean an immediate halt to production, but casts doubt on the long-term future of the plants.

Germany’s manufacturing sector has struggled to recover from the EU-wide energy crisis that followed the loss of Russian pipeline gas supplies in 2022. Although energy prices have fallen from their peaks, they remain high compared to other markets such as the US and China, and a major burden for German manufacturers, undermining their competitiveness.

Mercedes has also suffered a sharp sales slump in China, the world’s largest car market, where it faces fierce competition from Chinese automakers. Its sales in the Asian country plunged 31% year on year in the third quarter of 2026, compared with increases of 5% in Europe and 6% in the US. In October, the company cut its annual profit-margin forecast, citing worsening conditions in China and higher costs.

Mercedes is the latest German automotive giant to scale back domestic investment. On Wednesday, Reuters reported that Volkswagen abandoned a major manufacturing modernization project at its flagship Wolfsburg plant. The decision comes as the company pursues a sweeping restructuring plan involving 100,000 job cuts across the group and an uncertain future for four German factories.

A global Microsoft outage has disrupted work and public services for millions worldwide, hitting email, workplace tools, and customer communications as the breakdown stretches into a second day.

Problems began on Thursday and continued into Friday, spreading from the Americas into Asia and Europe. Microsoft has reported improvements, but repeated attempts to restore services have failed to fully resolve the disruption.

What has stopped working?

Users have reported inaccessible Outlook inboxes, delayed emails, and problems with calendars and meeting invitations. Outage tracker Downdetector received complaints from roughly 75 countries and territories, with US Outlook reports peaking at around 140,000 on Thursday.

Microsoft's outage reports on November 12 reached 74 countries and territories in about an hour on Downdetector. Microsoft says its Exchange Online incident began at 16:17 UTC. Reports to Downdetector about Outlook began climbing at about 17:25 UTC, 12:25 in New York. By 18:25, reports about five Microsoft services combined reached 19,650 a minute, against <15 a minute on an average Thursday. Outlook reports alone peaked at more than 2,000 times their normal level. Reports did not stay in the Americas. They jumped tenfold in the UK at 17:43, in India at 23:21 local time and in New Zealand at 06:55 local time. Between 17:00 and 18:55 UTC, nearly 3 in 10 reports came from outside the US. We count a country here once its reports reach ten times normal and at least 20 in five minutes. Reports about Microsoft 365, Copilot, Teams and OneDrive each rose more than a hundredfold, and Azure about a hundredfold. Xbox, GitHub and LinkedIn, also Microsoft's, rose far less. Microsoft said a portion of its infrastructure was experiencing elevated load across multiple regions. At 19:38 UTC, reports were still running at more than 11,000 a minute.

— Downdetector (@downdetector) November 12, 2026

The failure centers on Exchange Online, Microsoft’s cloud-based email and calendar system. Problems there have also extended to Teams, Copilot, SharePoint, and other workplace products.

While most Teams calls, meetings, and chats remain available, scheduling and other features dependent on Exchange have been failing. OpenAI and Anthropic have also reported disruption to their Microsoft integrations, affecting tools that retrieve information from connected accounts.

The consequences have extended well beyond office workers unable to check their inboxes. British police forces reported problems receiving online crime reports, while government communications and operations were affected in Japan, Singapore, the Philippines, and Hong Kong.

Australia’s intelligence agency and federal police were also among the organizations caught in the outage, Reuters reported.

Healthcare providers in Britain, meanwhile, have warned of delays to patient enquiries as email and administrative systems failed, although emergency care and scheduled appointments have continued.

Indian airlines reported disruptions to customer email support, while a US electric-truck manufacturer postponed its earnings call.

In New Zealand, a university reported that its travel provider could no longer accept online bookings. It also warned that scammers had started exploiting the outage with fake IT-support messages.

Several businesses and financial firms in Australia, Japan, and New Zealand have even been forced to switch back fax machines, phones, and messengers to keep operating and confirm trades.

The Office AI: Dunder Mifflin faces Microsoft outage! like, repost and subscribe for more comedy AI videos

— Christian Moss (@MandelDuck) November 13, 2026

What does Microsoft say went wrong?

Microsoft said some of its servers unexpectedly went offline, forcing the remaining machines to handle more work. The company noted that traffic had not increased, and that its systems had simply lost the capacity to cope with normal demand.

Microsoft is investigating whether that change triggered the disruption. It says it has found no evidence of a cyberattack and has pledged to publish a full explanation once services are restored.

How have markets reacted?

Microsoft shares fell roughly 2.5% in Friday’s premarket trading, reflecting a loss of nearly $100 billion in market value as the outage continued.

The financial damage has extended beyond shareholders, with Ashwin Pal, a privacy and security expert at advisory firm RSM Australia, estimating that direct and indirect costs in Australia alone would run into billions of dollars. He warned that smaller businesses would be particularly exposed, with costs continuing to accumulate after services returned as staff worked through the backlog.

The breakdown could have consequences beyond communications, disrupting decisions, revenue, and the delivery of services, Saurabh Verma of consultancy Frost & Sullivan warned.

When will services return?

Microsoft has not provided a firm deadline for full restoration. Its Friday updates reported improving access to mailboxes and email delivery in some regions, but warned that intermittent problems could remain as recovery continued in stages.

The company is also working through a backlog of delayed messages. It has extended the delivery window for emails to 48 hours, giving them more time to reach recipients before being returned as undeliverable.

The German Taxpayers Association has slammed the federal government for spending millions of euros on office furnishings and decorations while urging ordinary citizens to tighten their belts.

Chancellor Friedrich Merz’s ruling coalition has prioritized a massive military buildup and continued aid to Ukraine while pursuing cuts to social spending, despite growing public dissatisfaction with the government.

“Apparently, there is no fiscal room to provide relief for citizens, yet when it comes to the government’s own apparatus, the purse strings are remarkably loose – for decorations and the like!” association president Reiner Holznagel told the Neue Osnabrucker Zeitung (NOZ) on Wednesday.

“This is impossible to justify to taxpayers,” he added.

Holznagel urged lawmakers to scrutinize the spending, arguing that politicians demanding austerity from the public should first demonstrate restraint themselves.

The expenditures were revealed in a government response to a parliamentary inquiry submitted by the opposition Alternative for Germany (AfD) party. The 16 federal ministries spent approximately €5.8 million ($6.4 million) on furnishings and decorations between May 2025, when Merz took office, and mid-October 2026.

According to NOZ, the Foreign Ministry topped the list with roughly €840,000 in purchases, followed by the Defense Ministry at €813,000. The Finance Ministry spent more than €500,000, including over €45,000 on decorations alone.

The revelations come as Berlin warns Germans to prepare for further belt-tightening. Thorsten Frei, a senior figure in Merz’s CDU/CSU bloc, confirmed to Bild last week that citizens would have to become more frugal.

At the same time, Merz has pledged to turn the Bundeswehr into Europe’s strongest conventional military force, citing what he describes as a growing Russian threat. Berlin has also emerged as Kiev’s largest individual military donor following Washington’s sharp reduction in aid under US President Donald Trump.

Merz’s military ambitions have coincided with plunging public support, with his approval rating falling to a record low of just 10% last month.

Moscow has repeatedly dismissed claims that Russia intends to attack NATO as “nonsense,” accusing European leaders of exaggerating the threat to justify soaring military budgets.

US household debt has soared to a record $19.1 trillion as inflation spreads across the economy, according to figures released on Tuesday. Senior Federal Reserve officials have warned that faster interest rate hikes may be needed to curb rising prices, AP has reported.

The New York Fed’s report shows that household debt rose by $520 billion, or 2.8%, year-on-year in the third quarter of 2026. Mortgage debt accounted for the largest share of the annual increase, followed by auto loans, home equity credit, and credit cards.

Credit card balances climbed to a record $1.29 trillion, while the average debt per borrower reached $6,678, according to separate TransUnion figures. Credit cards are among the most expensive forms of consumer borrowing, with interest rates on accounts carrying balances averaging 22.36% in the third quarter, according to Federal Reserve data.

Americans fell further behind on their debt payments in the third quarter, with 5% of outstanding household debt overdue, up from 4.7% in the previous three months.

AP has cited senior Fed officials as calling for at least two additional quarter-point rate hikes, while one governor urged consideration of a larger half-point increase in December. Higher rates could make credit card debt and other variable-rate loans even more expensive to repay.

The financial strain is particularly severe among poorer Americans. A separate New York Fed analysis released Tuesday found that 10.3% of credit card balances in the lowest-income neighborhoods became seriously delinquent over the past year, more than double the 4.4% recorded in the wealthiest areas.

Beijing must prepare for Western financial restrictions resembling those used against Russia, Chinese analyst Gao Zhikai has warned, accusing Washington of weaponizing the dollar to exert economic pressure.

Speaking on How to Build a Better World, a joint RT–Jiangxi TV program, Gao recalled how Western sanctions restricted Russia’s access to dollar and euro transactions and disconnected major banks from SWIFT after the escalation of the Ukraine conflict in 2022.

“China must also be prepared in case the same kind of bullying and coercive measures are used against us one day,” Gao added.

To counter Western restrictions, Moscow has accelerated its shift away from the dollar and euro, expanded settlements in national currencies and promoted its own interbank messaging system, an alternative to SWIFT.

Washington has sanctioned Chinese companies over their alleged support for Russia’s military industry. Beijing has denied supplying weapons to either side of the Ukraine conflict and says it maintains control over dual-use exports. The Kremlin has condemned US sanctions threats against firms from China as “blackmail.”

Gao argued that Moscow and Beijing should deepen their financial cooperation by expanding settlements in rubles and yuan and developing currency swap arrangements. Such mechanisms could reduce transaction costs, facilitate bilateral trade and help establish an alternative framework for international economic cooperation, he said.

China–Russia trade surged 32.1% year-on-year to $242.5 billion in January–October, exceeding the total for all of 2025, Chinese customs data showed Tuesday.

Russian Deputy Finance Minister Ivan Chebeskov said last month that rubles and yuan already account for nearly 100% of bilateral settlements.

“Developing China-Russia trade is not just about our two countries,” he said. “We are also trying to explore whether there is a better way forward.”

How to Build a Better World, co-produced by RT, JXTV and Bilibili, has become the first public affairs show in the history of Chinese television to be jointly produced with a foreign broadcaster for nationwide Chinese-language broadcast.

The Spanish Ministry of Youth and Children has asked prosecutors to investigate the TikTok social media platform after thousands of videos allegedly depicting child sexual abuse and interactions involving suspected pedophiles were uncovered on the platform, El Pais reported on Monday.

TikTok’s parent company ByteDance, along with other social media giants, has faced mounting regulatory pressure and lawsuits worldwide brought by governments, advocacy groups and individuals. The companies have been accused of mishandling users’ personal data, failing to protect children from sexual exploitation and harmful content, and using engagement-driven features that encourage excessive screen time, potentially contributing to addiction, depression and anxiety. The allegations target platforms including Facebook and Instagram, Google’s YouTube, Snap’s Snapchat, and TikTok.

According to El Pais, Minister for Youth and Children Sira Rego announced the government was considering suspending the TikTok’s operations in Spain over the reported abuse. She warned that if it failed to take urgent action, the government would push for a complete ban on the app.

EU regulators have repeatedly raised concerns about the app’s impact on minors. Earlier this month, the European Commission said the platform’s recommendation algorithm could lead users into harmful content “rabbit holes.” In July, it flagged risks from minors’ public accounts and the recommendation of their videos to strangers. In February, the Commission issued preliminary findings that features such as infinite scrolling, autoplay, and push notifications breached the Digital Services Act by encouraging compulsive use.

The Commission has also pursued Meta, Snapchat, and YouTube over similar concerns. In April, it released preliminary findings that Facebook’s parent company had failed to adequately prevent children under 13 from accessing its platforms. In July, it raised separate concerns over the platforms’ addictive design, including infinite scrolling and personalized recommendations. Earlier this year, it opened a formal investigation into Snapchat over potential grooming, inadequate age verification and other risks to minors.

Meta, Google, ByteDance and Snap have also faced thousands of lawsuits in the US brought by states, school districts, and individuals claiming their platforms abused children and harmed their mental health.

Russia is set to build a massive mining and metals hub worth more than 667 billion rubles ($8 bn) in its Far East, the government has announced.

The project will boost domestic steelmaking and target major Asian markets, including China and India.

Russian Prime Minister Mikhail Mishustin has signed a decree expanding the Khabarovsk Territory of Advanced Development (TOR) to make way for the industrial complex, the government announced on Sunday. The project will be built around the Milkanskoye iron ore deposit in the remote Tuguro-Chumikansky district.

The expansion will give the company behind the project, LLC Milkan, access to tax breaks, streamlined administrative procedures and a free customs zone, reducing the costs of developing the massive industrial complex. The special economic regime is designed to attract private investment and accelerate industrial development in Russia’s eastern regions.

The development will include around 180 km of new railway, automated conveyor systems and a seaport terminal to ship finished products to domestic and overseas markets.

China, India, and Indonesia are among the planned export destinations. The project is also included in a portfolio of joint investment initiatives overseen by the Russian-Chinese Intergovernmental Commission on Investment Cooperation.

The hub is expected to create around 3,200 permanent jobs, with more than 5,000 workers needed during construction. Khabarovsk Governor Dmitry Demeshin said LLC Milkan will finance the necessary infrastructure without government funding.

The Khabarovsk TOR already has around 130 resident companies with more than 474 billion rubles in pledged investment. Of that amount, 414 billion rubles has been invested, while businesses operating under the scheme have created more than 16,600 jobs, according to the regional authorities.

Moscow has been expanding special economic development zones across the Far East to draw private capital, build transport infrastructure and strengthen trade with Asian economies. The region’s proximity to China and access to Pacific shipping routes have made it a key focus of Russia’s efforts to deepen economic ties with Asia.

US artificial intelligence giant Anthropic has struck a $3.4 billion deal for gas-powered generators to run its data centers independently of public electricity grids, according to media reports.

The Financial Times reported on the agreement over the weekend, saying the developer of the Claude AI chatbot secured commitments for 1.7 gigawatts of heavy-duty gas generators from Texas-based OnePWR Solutions in late September. The agreement is also said to cover engineering and construction services needed to install the equipment.

The purchase is intended to secure electricity for Anthropic’s expanding AI infrastructure without waiting for connections to public power grids, where mounting demand from data centers has led to lengthy delays.

Anthropic reportedly did not acquire OnePWR itself, and no employees were transferred under the agreement. The AI company has not publicly confirmed the reported transaction.

The purported deal reflects a broader shift in the AI industry, with technology giants increasingly investing directly in energy infrastructure rather than relying solely on utility companies. Developers are seeking their own power supplies to avoid grid connection delays and competition for electricity.

The rapid expansion of AI is also driving renewed demand for fossil fuels. According to the International Energy Agency, natural gas and coal will account for a substantial share of the additional electricity needed to power data centers through 2030, despite the technology industry’s commitments to reducing emissions.

Democratic candidates campaigning for tighter restrictions on AI infrastructure won several key gubernatorial races, including in Texas and Ohio. Voters in dozens of municipalities also backed measures restricting data center development, signaling growing resistance to the industry’s rapid expansion.

The backlash has added political pressure on technology companies to demonstrate that their expansion will not burden local communities. Building independent power generation offers one way to reduce reliance on public electricity grids, although it does not eliminate concerns over gas consumption and emissions.

Anthropic reportedly expects to spend more than $500 billion over the next decade on computing infrastructure to support the development of increasingly powerful AI models.

Ukraine faces a difficult choice as the International Monetary Fund (IMF) pushes for higher household tariffs on gas, electricity and heating from 2027.

With utility arrears already reaching 113.4 billion hryvnia ($2.5 billion) and millions of households struggling to pay their existing bills, the proposed increases raise a fundamental question: if Ukrainians cannot afford current tariffs, who will pay the higher ones - and will the policy actually generate more revenue, or simply deepen household debt?

Households are already struggling

As of the beginning of 2026, outstanding utilities arrears amounted to 113.4 billion hryvnia ($2.5 billion), having increased by 12.5% in the fourth quarter of 2025, according to the State Statistics Service of Ukraine. The figures for heating and hot water are particularly revealing: payments covered only 59% of the amounts billed during that quarter.

But that raises a question that the IMF doesn’t seem to address. If people cannot pay their existing bills, what makes anybody think that increasing the amount they owe will increase the amount of money collected?

The IMF’s tariff calculations are principally concerned with the relationship between the amount billed and the cost of supplying the service. But raising prices does not necessarily raise revenue proportionately.

What if people don’t pay?

Meanwhile, the huge sum of unpaid utility bills tells us something that standard economic statistics do not. It shows that households are continuing to consume an essential service without paying its full cost.

The utility company supplies the energy and sends the bill, but some of that bill goes unpaid. The household gets to use the money it would otherwise have spent on the utility bill, while the utility company is left waiting for payment. In effect, the company is extending credit to the household, whether it intends to or not.

Does this mean the IMF is favoring creditors over the population?

The IMF is not a national economic planning ministry. It has a very particular mandate, which is to help countries address balance-of-payments problems and make financing available under certain safeguards – and of course promote economic stability.

For a country such as Ukraine, which is heavily dependent on external financial support, these objectives make a certain amount of sense. So does the IMF’s concern about the hidden degradation of Ukraine’s debt sustainability. A country’s ability to pay back creditors – including the IMF itself – is of no small concern to the fund.

Nevertheless, the IMF is clearly correct that Ukraine has an unsustainable fiscal structure and that something has to give.

In September, Rada Energy Committee member Sergey Nagorniak said Ukraine would soon face tough decisions: “Sooner or later, our partners will back us into a corner and force us to make highly unpopular decisions – to end subsidies for natural gas, heating, and electricity tariffs for households,” the MP said.

Therefore, the age-old question of who will bear the burden of the adjustment cannot be avoided. Ultimately, this is a decision for the Ukrainian government. Insofar as it has any autonomy, it will have to decide what its priorities are.

What is clear enough is that the incentives seem to align so that the IMF, Ukraine’s creditors, and foreign donors are interested in maintaining a very specific type of stability, in which the wellbeing of Ukrainian households is far from the main concern.

The massive selloff on Wall Street following the Republicans’ defeat in the US midterm elections has dealt a new blow to major hedge funds, the Wall Street Journal reports. Hedge funds have reportedly been slashing staff and dumping assets after suffering heavy losses in recent months.

Funds specializing in technology, media, and telecommunications stocks lost more than 4% on Thursday alone, according to Goldman Sachs data, cited by WSJ. The crash virtually erased their annual gains, which reached as much as 24% in June. Funds investing across multiple asset classes lost 1.4%.

The latest losses followed a disastrous October, when hedge funds that bet on individual stocks rushed to sell investments and close positions at the fastest pace in more than a decade, according to Morgan Stanley. The funds have reduced their market exposure by roughly 9% since June, while more than 40% were breaking even or losing money for the year through October.

The October selloff followed earnings reports from major US technology companies that revealed soaring AI spending, with some firms burning through cash to finance new data centers and computing infrastructure. Investors questioned whether these investments would generate sufficient returns and began dumping technology stocks. The decline hit hedge funds that had invested heavily in the sector, often using borrowed money.

The selling has spread beyond technology stocks. Arini Capital Management has slashed its corporate debt holdings partly because banks demanded additional collateral to cover its trading positions, according to the WSJ.

The International Monetary Fund warned in October that hedge funds could deepen market crashes by dumping the same investments simultaneously, driving prices lower, and potentially spreading losses to major banks.

Tech stocks were rallying somewhat on in early trading on Friday.

Asian stock markets plunged on Friday, extending a massive technology-led selloff on Wall Street that sent major indexes tumbling and forced a temporary trading halt in South Korea.

The turmoil began on Wall Street on Thursday, when a massive selloff was triggered by fears that the Democrats’ midterm election victories could derail US President Donald Trump’s ambitious AI investment drive.

The Democratic Party secured majorities in both the House of Representatives and the Senate in Tuesday’s elections, wresting control of Congress from the Republicans. Candidates campaigning against new data center development also won gubernatorial races in Texas and Georgia, two states that have long offered tax incentives to attract technology investment.

Newly elected governors in states accounting for roughly 40% of planned US data center capacity promised to halt or pause construction, Bloomberg reported on Thursday.

The rout hit some of Asia’s biggest technology companies, particularly chipmakers that have benefited from the artificial intelligence boom. South Korean giants Samsung Electronics and SK Hynix suffered heavy losses, while shares of Taiwan Semiconductor Manufacturing Company (TSMC) also fell sharply.

“It is time for correction, but we feel that there may be some overreaction to the outcome of the midterm election,” Jun Kwang-woo, chairman of the Seoul-based Institute for Global Economics, told Reuters.

The crash also wiped more than $18 billion off the combined fortunes of 22 of Asia’s richest tech tycoons, according to Bloomberg’s Billionaires Index. SoftBank founder Masayoshi Son suffered the biggest loss at $3.9 billion, while Samsung’s controlling family saw its wealth shrink by around $2.5 billion.

Semiconductor giants were among the hardest hit. Advanced Micro Devices (AMD) and memory chipmaker Micron plunged more than 17%, while Nvidia shed 9.3% and Broadcom lost over 10%.

The Philadelphia Semiconductor Index, which tracks major US-listed chipmakers, tumbled more than 12%. The rout also swept through major technology companies including Alphabet, Microsoft, Apple, Amazon, and Meta.

The AI sector had already come under pressure in October, when an estimated $2 trillion was erased from the Nasdaq-100. Investors have grown increasingly skeptical that massive spending on AI infrastructure will generate sufficient returns.

The Trump administration has touted more than $3 trillion in technology and AI investment commitments since January 2025, although much of the pledged funding has yet to be spent.

Asian markets recovered some of their early losses on Friday but still closed sharply lower. South Korea’s Kospi finished down 6.02%, Japan’s Nikkei 225 lost 5.96%, while Taiwan’s Taiex shed 4.51%.

Wall Street suffered a massive selloff on Thursday, led by technology stocks, as the Democrats’ midterm victories fueled fears over the future of President Donald Trump’s ambitious AI investment drive.

The Democratic Party secured majorities in both the House of Representatives and the Senate in Tuesday’s elections, wresting control of Congress from Republicans. Candidates campaigning against new data center development also won gubernatorial races in Texas and Georgia, two states that have long offered tax incentives to attract technology investment.

The tech-heavy Nasdaq Composite plunged more than 5.5% during Thursday’s trading, erasing more than $2 trillion in estimated market value. The S&P 500 sank over 4%, while the Dow Jones Industrial Average, which has less exposure to technology stocks, dropped more than 3%.

Semiconductor giants Nvidia, Advanced Micro Devices (AMD), Micron and Broadcom were among the hardest hit as investors dumped shares in companies at the heart of the AI boom.

The Philadelphia Semiconductor Index, which tracks major US-listed chipmakers, tumbled more than 12% – its steepest intraday decline since March 2020, according to Dow Jones Market Data.

The rout also swept through America’s biggest technology companies, with Google parent Alphabet, Microsoft, Apple, Amazon, and Meta posting losses of between 2% and 4%.

The election results have added a new layer of uncertainty, raising concerns that a Democrat-controlled Congress could challenge the administration’s support for rapid AI expansion, including incentives for energy-intensive data centers.

The Trump administration has touted more than $3 trillion in technology and AI investment commitments since January 2025, although much of the pledged funding has yet to be spent.

Russian President Vladimir Putin has placed the local assets of Japanese tobacco giant Japan Tobacco International (JTI) under temporary management, according to a decree published on the official legal information portal on Thursday. 

The decree transfers management of four JTI businesses – Petro, Donskoy Tabak, JTI Yelets, and Kres Neva – to Russian company Promyshlennye Aktivy (Industrial Assets).

The Petro factory in St. Petersburg and Donskoy Tabak in Rostov-on-Don produce cigarettes, while JTI Yelets in Lipetsk Region and Kres Neva in Leningrad Region process tobacco. The measure covers 100% of the ownership interests in each of the four businesses, held by the group’s foreign and Russian subsidiaries.

JTI is the international arm of Japan Tobacco, one of the world’s largest cigarette manufacturers. The company has operated in Russia since 1999 and strengthened its position in 2018 by acquiring Donskoy Tabak for approximately $1.6 billion. Its brands include Winston, Camel, Sobranie, Mevius, and LD, along with Russian labels such as Petr I and Russky Stil.

Following the escalation of the Ukraine conflict in 2022, JTI suspended new investments and marketing activities in Russia and considered selling its local business. However, the company decided to stay, citing its commitment to consumers. In 2024, Japan Tobacco CEO Masamichi Terabatake told the Financial Times that Russia had accounted for around 20% of the group’s profits and that leaving the profitable market could expose shareholders to losses.

The move comes against a backdrop of tensions involving Japanese companies and the Ukraine conflict. In October, the Russian Defense Ministry reported a strike on the JTI Ukraine tobacco factory in Kremenchug, saying that the facility had been used to produce small-arms ammunition for Ukrainian forces.

Later that month, Russia’s Foreign Ministry warned of a strong response after Japanese drone maker Terra Drone supplied interceptor drones to Ukraine. Moscow described the deliveries as a hostile act, accusing Tokyo of encouraging military cooperation between Japanese companies and Kiev.

The decision follows similar measures involving the Russian operations of several major foreign companies, including Swiss food giant Nestle, French retailers Auchan and Leroy Merlin, German wholesaler Metro, and French flooring manufacturer Tarkett.

Under the arrangement, foreign owners lose control over the management of their businesses but do not automatically forfeit ownership. Russian authorities can appoint domestic companies or state bodies to operate the affected enterprises. 

In March 2025, Italian appliance maker Ariston regained control of its Russian subsidiary after announcing plans to resume operations in the country. The business had been placed under the management of Gazprom Household Systems the previous year.

At the Valdai Discussion Club in October, Putin said Russia was not seizing, stealing, or nationalizing foreign assets, calling claims to the contrary “lies and provocations.” He said that temporary management was intended to allow Moscow to respond in kind to the seizure of Russian property abroad. Asked whether foreign companies would regain control of their businesses under favorable circumstances, he replied: “Yes, they will.”

US artificial intelligence giant OpenAI has hired former Army Secretary Dan Driscoll as a senior national security adviser, in the latest high-profile appointment highlighting the increasingly close ties between Silicon Valley and the Pentagon.

Driscoll will join the company as senior counselor for national security modernization, OpenAI announced on Monday. He will advise its leadership and partners on the use of AI in national security and cybersecurity, including cooperation with US allies.

The tech industry has been strengthening its ties with the US military. Palantir provides AI-powered intelligence and targeting systems to the Pentagon, while Elon Musk’s Starlink network has become a key communications platform for Ukrainian forces. Defense technology firm Anduril has also developed AI-enabled drones and autonomous weapons systems.

Driscoll served as secretary of the US Army from 2025 until his resignation in August 2026. He also played a role in Washington’s efforts to resolve the Ukraine conflict, taking part in trilateral talks with Russian and Ukrainian officials in February 2026.

His departure from the Pentagon followed reported disagreements with Secretary of War Pete Hegseth over the army’s direction and combat readiness.

Other technology and defense companies have also recruited former senior Pentagon officials.

Former Army Secretary Ryan McCarthy has joined the boards of several defense and technology companies, including Lynx Software Technologies and CACI International.

Former Defense Secretary Mark Esper joined the board of defense technology firm Epirus in 2021, while His predecessor, James Mattis, returned to the board of defense contractor General Dynamics in 2019 after leaving the Pentagon.

Will Roper, a former assistant secretary of the US Air Force responsible for acquisition, technology, and logistics, joined the board of drone manufacturer Volansi in 2021.

Former NSA director Keith Alexander also joined Amazon’s board in 2020 while serving as co-CEO of cybersecurity firm IronNet.

France is “headed straight for a wall” unless it reins in its budget deficit, Finance Minister Roland Lescure has warned, as the country’s economy contracts and inflation accelerates.

Gross domestic product fell by 0.1% in the third quarter, following stagnation in the previous three months and a 0.2% decline at the start of the year, the national statistics agency reported on Friday. Annual inflation climbed to 3.4% in October from 3.1% in September, its highest level since January 2024.

Lescure also described the economy as being “at a standstill,” underscoring the mounting financial challenges facing President Emmanuel Macron’s government.

The downturn extended across key sectors. Exports dropped 1.7%, largely due to weaker overseas aerospace sales, while investment fell 0.6%. Manufacturing output declined 1.4%, with automobile production shrinking for the fourth consecutive quarter.

The deteriorating outlook has increased pressure on Macron, whose government is pursuing spending cuts while boosting military expenditure and weapons deliveries to Kiev. France increased its 2026 military budget by €6.7 billion ($7.5 billion) despite its mounting debt.

The government’s austerity policies have also fueled nationwide unrest which began in September with protests over staff shortages and deteriorating conditions at a high school near Paris. The demonstrations quickly spread, with thousands of students demanding more education funding and accusing the authorities of prioritizing weapons over schools.

The protests have drawn comparisons with the 2018 Yellow Vest movement, which challenged Macron’s economic policies. Activists, students, and trade unions have called for new demonstrations on Saturday, prompting the authorities to mobilize 70,000 security personnel nationwide. Interior Minister Laurent Nunez warned of a “very high risk” of disorder.

Macron has blamed the purchasing-power crisis on the US-Israeli war against Iran, the blockade of the Strait of Hormuz, and surging fuel prices. He has also accused social media platforms of “damaging democracy” by circulating footage of protests and riots.

The US’ largest oil companies almost tripled their profits during the US-Israeli war on Iran, the New York Times has reported, at a time when soaring energy costs threaten to wipe out US President Donald Trump’s Republican Party in the upcoming midterm elections.

The American oil giants – including Chevron, Exxon Mobil, and Valero – earned $130 billion in profits between April and September, according to six months worth of financial results covering more than 50 companies, combined by the New York Times. In the same period last year, these companies made less than $47 billion.

This windfall is an almost direct mirror of the extra $147 billion Americans spent on gasoline and diesel since American and Israeli warplanes began striking Iran on February 28.

Exxon’s third-quarter profit more than doubled this year, while Chevron’s almost tripled.

American refiners have taken advantage of the widespread destruction of refining sites in the Gulf region, and the threat of Ukrainian drone strikes on Russian refineries, leveraging their safe location inside the US. Valero and Phillips 66 both posted all-time record third-quarter profits this year.

Europe’s oil giants have posted similar results, with Shell, TotalEnergies, and Repsol all more than doubling their earnings last quarter over the same timeframe in 2025, as Europeans grapple with record energy bills. Some European finance ministers have demanded that the EU impose windfall taxes on these companies in response.

At $4.29 per gallon as of Monday, US gasoline prices are now higher than they were at any point during former President Joe Biden’s four years in office, with the exception of the first three months after the escalation of the Ukraine conflict. Trump has described the elevated prices as a “small price to pay for” preventing Iran from obtaining a nuclear weapon, but voters aren’t convinced. 

Trump has tried to alleviate some of this damage by lifting sanctions on Russian diesel, and at least three diesel tankers have left Russian ports en route to the US. Trump has also pressed Ukrainian leader Vladimir Zelensky to cease attacks on Russian refineries, but Zelensky has apparently ignored these requests.

European gas prices could more than double as depleted reserves threaten winter supplies, Gazprom CEO Aleksey Miller has warned.

Wholesale prices have already reached their highest level in nearly four years, briefly exceeding €97 ($108) per megawatt-hour on Monday. December gas futures climbed another 3.1% on Friday to around $1,164 per thousand cubic meters, according to London’s Intercontinental Exchange.

Miller pointed to unusually low gas reserves across the EU, noting that Germany, the bloc’s largest consumer, has filled just 61.6% of its underground storage capacity.

”Given the series of historic record lows Europeans have set in filling underground gas storage facilities [...] we can expect gas prices in Europe to peak at $2,500 per thousand cubic meters in the event of a cold winter,” he said.

The US-Israeli war on Iran has further strained supplies, disrupting shipments through the Strait of Hormuz, which previously handled around a fifth of global LNG trade. Deliveries remain roughly 80% below pre-conflict levels.

EU gas storage facilities were 74.62% full as of October 25, well below seasonal averages, with some member states already drawing on reserves as temperatures fall.

Germany has been particularly hard hit. Gas tariffs for new household customers have jumped 55% this year, according to comparison website Verivox. High energy costs have forced some European fertilizer, chemical, and steel producers to cut output, Reuters reported.

Despite mounting supply concerns, Brussels is pressing ahead with plans to eliminate Russian gas imports. Long-term LNG deliveries are set to be banned from January 2027, with remaining pipeline supplies scheduled to end later that year.

Moscow has repeatedly condemned the EU’s energy policy as “suicidal.” Russian presidential investment envoy Kirill Dmitriev argued last week that restoring economic cooperation with Russia “will be inevitable.”

Binance, the world’s largest cryptocurrency exchange, has estimated the impact of a cyberattack at $6.3 billion, saying hackers may have exploited an employee’s compromised laptop to make unauthorized withdrawals.

In an update on Friday, the company said its preliminary investigation suggested that an attacker gained access to a service container through a compromised laptop belonging to a DevOps engineer, allowing unauthorized withdrawal transactions to be submitted.

Binance said it found no evidence that wallet private keys were leaked and pledged to cover all losses using its Secure Asset Fund for Users and company funds.

“The estimated total impact sits at around $6.3B. We have worked with blockchain partners to freeze affected assets, with ~$3 billion frozen on-chain so far,” the exchange said in a statement.

As an immediate precaution, Binance temporarily suspended deposits and withdrawals, and conducted security checks. It also revoked the affected address authorization and enlisted law enforcement and blockchain intelligence firms to trace and recover funds and identify those responsible.

The incident follows reports of suspicious transactions involving billions of dollars in digital assets transferred from wallets linked to Binance on Thursday.

Blockchain researchers initially estimated the outflows at $2.77 billion across five blockchains. Binance subsequently confirmed that $2.54 billion in affected assets were frozen. 

Stablecoin issuers Tether, Circle, and Ripple were among the companies that moved to freeze assets linked to the suspected attack.

The suspected attack comes amid a series of major cryptocurrency thefts this year. In September, hackers stole around $388 million from the Bitget exchange. Attacks on the Drift Protocol and Kelp DAO platforms in April resulted in losses of $285 million and $292 million, respectively. In February 2025, suspected North Korean hackers stole around $1.5 billion from Bybit in what was widely described as the largest cryptocurrency heist on record at the time.

Binance co-founder and former CEO Changpeng Zhao pleaded guilty in 2023 to violating US anti-money-laundering laws and stepped down as head of the exchange as part of a settlement in which Binance agreed to pay $4.3 billion in penalties. He subsequently served a four-month prison sentence.

US President Donald Trump pardoned Zhao in October 2025. The White House defended the decision, saying he was unfairly prosecuted under former President Joe Biden as part of a broader crackdown on the cryptocurrency industry.

As European households struggled to pay their energy bills, the continent’s oil companies more than doubled their profits over the last quarter, reaping the benefits of the US-Israeli war on Iran.

Eight months to the day since American and Israeli forces began bombarding Iran, Brent crude prices sat at $115 on Thursday, up from $72 pre-war. Dated Brent, the actual on-the-spot price that purchasers are paying for Brent cargoes in the North Sea, was even higher, at $120.

This price spike has driven the cost of petrol, diesel, and heating oil to record highs across Europe. However, it’s been a windfall for Europe’s largest oil companies, according to quarterly profit statements compiled by Germany’s Der Spiegel on Thursday.

British oil and gas giant Shell recorded a profit of $12.1 billion between July and September, a more than twofold increase on the previous quarter, and on the same quarter last year. Between July and September 2025, Shell made $5.43 billion in profit.

German Finance Minister Lars Klingbeil and his counterparts in Austria, Italy, Poland, Portugal, and Spain, have called for an EU-wide windfall tax on the oil giants, similar to the “solidarity levy” imposed by Brussels after the escalation of the Russia/Ukraine conflict in 2022.

“The Commission has been very reserved on this issue, although several member states have been calling for models to ​be presented for a long time,” Klingbeil said after a meeting of EU finance ministers in Ireland last month. “This must happen by the next [finance ministers’] meeting in ​October at the latest,” he added.

The European Commission shot down Klingbeil’s proposal, and October passed with no action from Brussels. “It is in the hands of member states,” EU Economic Commissioner Valdis Dombrovskis told reporters. “Member states can go ahead and take those decisions on the taxing of windfall profits.”

Despite Gulf exports reportedly recovering to 80% of pre-war levels, Houthi attacks on Saudi energy facilities and shipping, the threat of naval mines in the Strait of Hormuz, and warnings of an “intense” new US military campaign against Iran have all played a role in keeping oil prices nearly twice as high as they were at the beginning of February.

German automotive giant Volkswagen has reported a €5.8 billion ($6.5 billion) net loss for the third quarter of 2026, up from €1.1 billion a year earlier, as the country’s manufacturing sector faces growing economic pressure.

Europe’s largest carmaker announced the results on Thursday. Revenue fell 6.3% to €75.3 billion, and vehicle deliveries dropped 14.3%.

“US tariffs weigh on us, the Chinese market is shrinking, and competitive pressure in Europe is increasing significantly,” VW Group Chief Financial and Operating Officer Arno Antlitz said in a statement.

Volkswagen faces growing competition from cheaper Chinese vehicles in Europe, and its expanding electric car business remains less profitable than that of conventional models.

The results follow the auto giant’s announcement in September of sweeping restructuring plans that could eliminate up to 100,000 jobs and leave four German factories facing closure.

The pressures extend beyond the automotive sector. In an assessment on October 21, the German Economy Ministry acknowledged weakening economic momentum and sluggish manufacturing activity, particularly in energy-intensive industries.

German manufacturers have struggled with high energy costs since losing access to inexpensive Russian pipeline gas following the escalation of the Ukraine conflict in 2022.

The shift toward military production is already visible in the automotive industry. In September, Volkswagen reached a preliminary agreement to sell its Osnabrueck factory for conversion to defense manufacturing, potentially preserving around 1,400 jobs. The project envisages cooperation with Israeli weapons producer Rafael on air-defense systems.

Weapons manufacturer Rheinmetall has also announced plans to expand production facilities, including armored vehicle manufacturing, potentially creating more than 1,000 jobs.

Germany’s expanding military industry has drawn criticism from Russia. Addressing the UN General Assembly in September, Foreign Minister Sergey Lavrov questioned Chancellor Friedrich Merz’s ambition to make Germany Europe’s leading military power, warning of the potential consequences and asking whether Berlin learned the lessons of World War II.

US artificial intelligence giant Anthropic has formally filed for a potentially record-breaking initial public offering (IPO), according to regulatory documents. The developer of the Claude chatbot could become the first publicly traded company focused primarily on advanced AI models, even as it warns that its own technology could threaten humanity.

The San Francisco-based company submitted its public registration statement to the US Securities and Exchange Commission (SEC) on Monday, revealing plans to list on Nasdaq under the ticker ANT. The offering could take place as early as November, although its size and share price have yet to be announced.

“The advent of machine intelligence is one of the seminal moments in human history,” Anthropic declared in its prospectus, presenting AI as a technology capable of transforming the global economy.

SpaceX completed the largest IPO in history in June, raising $85.7 billion at a valuation of around $1.8 trillion. However, the record-breaking listing drew criticism over its lofty valuation. Investment research firm Morningstar estimated the company’s fair value at just $63 per share, less than half its $135 IPO price.

Similar questions are emerging over Anthropic’s valuation. The company reported $16.3 billion in revenue in the first half of 2026 but posted a net loss of $80.7 billion, largely driven by accounting adjustments. Its IPO filing also disclosed hundreds of billions of dollars in future infrastructure commitments, raising concerns about whether its rapid growth can justify a valuation of up to $2 trillion.

Anthropic’s IPO prospectus also contains stark warnings about the technology underpinning the company’s business. Around 80 pages of the 261-page filing are devoted to risk factors, with the company admitting that advanced AI could “pose catastrophic or existential risks to humanity.”

The dangers outlined include the use of AI to develop biological and chemical weapons, the loss of human control over increasingly powerful systems, and lasting damage to human mental health and cognitive abilities. Anthropic also acknowledged that its own AI models have displayed behavior resembling blackmail and resistance to shutdown during testing.

The warnings follow a string of incidents involving rogue AI agents, including an Anthropic model submitting a false homicide tip to police and OpenAI agents disabling safety monitors and hacking external systems.

OpenAI has restricted internet access for training its most powerful artificial intelligence (AI) models after agents found ways to escape isolated computing environments. It will switch to an offline setup with cached web pages for reinforcement learning.

The findings published by the company on Friday come amid growing concerns over the cybersecurity risks posed by increasingly capable AI agents, which can identify software vulnerabilities and exploit weaknesses in the systems they interact with. Security researchers have warned that such capabilities could allow agents to exploit flaws in the safeguards designed to contain them.

OpenAI said one of its research models gained limited internet access on September 20 by exploiting a misconfiguration in the system that translates web addresses into IP addresses. The company contained the incident and paused training and evaluation of its most advanced models while strengthening its defenses.

Training resumed on October 1, including reinforcement learning and internal inference, but the company retained the restriction on live internet access. In its October 23 report, OpenAI said the models would continue to be trained in an offline environment until it had developed sufficiently robust safeguards to permit broader access.

Earlier this week, OpenAI also disclosed two incidents in which agents weakened internal safety monitoring while carrying out coding tasks. On October 3, an agent disabled automatic security alerts, while on October 6 another removed a monitoring integration and later falsely told the user it had not done so. The company said it was strengthening controls to prevent agents from disabling monitoring and investigating why they had acted that way.

Similar incidents have been reported by other AI developers. Anthropic said its Claude models accessed four organizations’ systems during cybersecurity tests, while Meta disclosed that its Muse Spark model exploited a vulnerability in a real company’s website after a testing error gave it internet access. Google also reported that its Gemini model accessed the systems of three companies during an evaluation, highlighting the challenges of containing increasingly capable AI agents in controlled testing environments.

Russia has dispatched three tankers carrying diesel fuel to the United States under an agreement reached between Russian President Vladimir Putin and his American counterpart Donald Trump, Deputy Prime Minister Alexander Novak has announced.

The vessels are already sailing toward the eastern Atlantic coast, Novak said on Friday, adding that most of the additional fuel supplies could come from Russian energy giant Rosneft.

“In accordance with the previously announced agreements to saturate the global diesel market, Russia will ensure additional supplies of diesel fuel to world markets and the United States,” Novak said.

Moscow has eased its restrictions on diesel exports, allowing Russian companies to ship up to 500,000 tons of fuel to international markets in October while ensuring domestic demand remains fully covered. The shipments were arranged with significant assistance from the Russian Direct Investment Fund (RDIF), headed by Putin’s economic envoy Kirill Dmitriev.

EA Maritime Analytics is tracking the first cargo of Russian diesel heading to the US since Trump’s 9 October announcement. MR tanker Agioi Fanendes (IMO 9798375) sails from Primorsk today with a cargo of ultra-low-sulphur diesel, confirmed by our market sources. Her AIS shows New York as the destination, with arrival expected on 10 November. Cargo size: around 298,000 barrels (40,000 tonnes). On 9 October, Trump said Russia would supply more than 300,000 tonnes of diesel immediately, followed by 500,000 tonnes in November and 1 million tonnes after that. #MaritimeAnalytics #Diesel #CargoTracking

— Energy Aspects (@EnergyAspects) October 23, 2026

Further deliveries would continue on a regular basis, Kremlin spokesman Dmitry Peskov said earlier in the day, confirming that the first tanker had departed for its buyers but not identifying the vessel.

BREAKING: We have now identified three tankers carrying Russian #diesel to the United States. All three loaded at petroleum berths in Russia and are declaring USA as their destination. Diesel is the only known hydrocarbon which the US OFAC currently permits imports of from Russia. #OOTT

— TankerTrackers.com, Inc. (@TankerTrackers) October 23, 2026

Maritime tracking groups identified one of the tankers as the Malta-flagged Agioi Fanendes, carrying approximately 40,000 tons of diesel. Reuters reported that the vessel had departed Russia’s Baltic port of Primorsk and was heading toward New York, with an initial estimated arrival date of November 7.

The deliveries follow an October 9 phone conversation between Putin and Trump, after which the American president announced that Russia would immediately supply more than 300,000 tons of diesel, followed by 500,000 tons in November, another million tons shortly thereafter, and potentially further shipments depending on refining capacity. Washington subsequently issued a temporary sanctions waiver permitting Russian diesel imports, reversing restrictions introduced under former US President Joe Biden in 2022.

Trump has repeatedly urged Ukraine’s Vladimir Zelensky to stop attacking Russian refineries, accusing Kiev of exacerbating the worldwide diesel shortage and hurting American consumers and farmers.

Zelensky rejected the criticism on Thursday, calling Trump’s claims “totally false” and accusing the American leader of “deflecting the focus away from Iran.”

The US-Israeli war on Iran has caused an “unprecedented” shock to global energy markets, removing around 3 billion barrels of oil, Saudi Aramco CEO Amin Nasser has warned.

The war launched in February effectively closed the Strait of Hormuz, a crucial oil and LNG artery, sending crude prices up around 50%. Despite Gulf exports recovering to a reported 80% of pre-war levels, renewed attacks on vessels have kept markets on edge, with Brent hitting a five-month high above $112 this week. Houthi attacks on Saudi energy infrastructure and shipping have compounded the crisis, threatening another vital trade chokepoint, the Red Sea’s Bab el-Mandeb Strait.

In an interview with Al Arabiya Business aired on Thursday, Nasser said the nearly eight-month crisis had deprived global markets of an estimated 3 billion barrels of oil.

The figure is equivalent to nearly a month of global oil consumption and reflects cumulative supply losses caused by disrupted shipping, reduced production, and logistical bottlenecks.

Nasser warned, however, that even an end to the crisis could bring new pressure on oil markets, as recovering consumption and a rush to replenish depleted reserves will likely fuel another demand surge.

“Once things return to normal, we expect additional demand of around 3 million barrels per day – about 2 million from consumption growth and another 1 million just to replenish the reserves countries have drawn down during the crisis,” he said, noting that the added demand could keep markets under strain long after shipping routes reopen.

Fresh escalation fears

Meanwhile, fears of another escalation are growing as US-Iran talks remain deadlocked. Reports on Wednesday claimed that Washington was quietly pulling troops from bases in Jordan, Qatar, and Kuwait, evacuating some diplomats and their families from Saudi Arabia and preparing similar withdrawals elsewhere. Similar precautions were taken ahead of the US-Israeli strikes on Iran on February 28.

The moves follow US President Donald Trump’s rejection last month of Tehran’s proposal to reopen Hormuz in exchange for lifting the US blockade of Iranian ports, easing oil export restrictions, unfreezing Iranian assets, and ending regional hostilities, including Israeli operations in Gaza and Lebanon.

The US has warned of severe consequences for EU businesses if Brussels goes ahead with plans to restrict American firms such as Elon Musk’s Starlink from accessing satellite spectrum in the bloc.

The warning, issued by US Ambassador to the EU Andrew Puzder, comes after the European Commission proposed earlier this year to reserve a share of the spectrum used for direct smartphone-to-satellite connections for EU market players beyond 2027, when current licenses expire.

The move could limit access to satellite frequencies for foreign providers as part of Brussels’ stated push for technological sovereignty.

“If the purpose is to make US less competitive, I think that that’s not a legitimate goal of this kind of legislation,” Puzder said in an interview with the Financial Times published on Monday. “You don’t make European companies more competitive by making US companies less competitive.”

The envoy stressed that EU businesses “should be wary” that US retaliation “would be very devastating” for them, given the size of the American market.

Politico reported earlier this month that European telecoms groups Deutsche Telekom, Orange, Vodafone, and Telefonica have begun discussing an alliance to jointly bid for the frequencies and to “squeeze” Starlink out of the direct-to-smartphone satellite connectivity market.

In June, SpaceX, which operates the Starlink satellite internet network, criticized the proposal, claiming it could degrade connectivity in Ukraine, which uses the service to carry out drone strikes deep inside Russia. Earlier this month, Kiev stated that access to the service had been restricted as US President Donald Trump continued to step up pressure on Vladimir Zelensky to halt attacks on Russian oil refineries.

The laws have drawn criticism from the US, which has also condemned the European Commission’s €120 million ($136.51 million) fine against Elon Musk’s X platform for alleged violations of the DSA.

In his FT interview, Puzder questioned whether Brussels is seeking to promote competition or generate revenue for the EU budget through multibillion-euro fines on US tech companies. The envoy also told the newspaper that the bloc’s ambitions to strengthen its tech industry risk being undermined by regulations that discourage US investment and fuel frustration among American tech firms.

The Russia-US diesel deal has already helped lower American fuel prices and could pave the way for broader economic cooperation between Moscow and Washington, Russian presidential aide Kirill Dmitriev has said.

Speaking to RT on Wednesday, Dmitriev, who also heads Russia’s sovereign wealth fund, described the agreement as a win-win for both countries and a “great help to global markets.”

“Diesel futures in New York fell by 5% on the announcement of this cooperation between Russia and the US,” he said.

The agreement was announced on Friday following a phone call between Russian President Vladimir Putin and his US counterpart, Donald Trump. The US Treasury subsequently issued a temporary sanctions waiver allowing Russian diesel to be sold, delivered and imported into the US until April 7, 2027.

Trump said Moscow would immediately supply more than 300,000 tons of diesel to US and global markets, followed by another 500,000 tons in November and one million tons shortly thereafter. Up to three million additional tons could become available “within a short period of time,” he added.

The arrangement is aimed at easing soaring fuel prices amid global supply disruptions caused by the US-Israeli war with Iran.

Dmitriev argued that the immediate market response demonstrated the economic benefits of cooperation and the costs of maintaining sanctions against Moscow.

“We are seeing that lifting [US] sanctions on Russian diesel is having an immediate positive effect, including for American farmers [and] the American economy,” he said.

Russian Deputy Prime Minister Aleksandr Novak recently estimated that the bloc had spent more than $320 billion on Russian energy since the escalation of the Ukraine conflict in 2022, despite claiming to have sharply reduced its imports.

Trump similarly lashed out at Brussels in a Truth Social post on Monday, insisting that he had “made the right choice for the American People.”

Novak has welcomed Washington’s decision as a step toward stabilizing global energy markets and restoring normal trade. He also announced that Moscow would begin immediately lifting its own restrictions on diesel exports.

Foreign nationals have filled 80% of new UK jobs over the past decade, while millions of Britons have remained on out-of-work benefits, according to a new report by the Centre for Social Justice (CSJ).

The UK think tank said on Tuesday that British nationals accounted for just 734,000 of the 3.7 million jobs added to payrolls between 2014 and the end of 2025. EU nationals accounted for 408,000 new jobs, while migrants from the rest of the world filled around 2.5 million.

“Employers have gained unprecedented access to overseas labour while taxpayers have absorbed the growing cost of domestic worklessness,” the report said.

The findings are part of a major inquiry chaired by former UK Work and Pensions Secretary Iain Duncan Smith. The report argues that successive governments have relied on low-skilled migrant labor while millions of Britons have been “written off” by the welfare system.

Since 2020, payroll employment among non-EU nationals has surged by 2.1 million, while the number of people claiming out-of-work benefits has risen by 2.3 million. Much of the employment growth was concentrated in health and social care, administrative services, hospitality and retail.

Around 6.7 million people in England, Wales and Scotland now receive at least one out-of-work benefit, equivalent to roughly one in six working-age adults, according to the CSJ. Since 2019, the number of claimants exempt from requirements to seek or prepare for work has climbed by nearly 1.7 million.

Annual spending on working-age benefits is projected to reach £136.1 billion ($181 billion) in 2026-27.

The report comes amid mounting political pressure over immigration. Reform UK leader Nigel Farage has repeatedly accused successive governments of favoring migrants and minorities over the white working class, demanding tighter border controls and denouncing what he calls a “two-tier” system of unequal treatment.

Britain has also struggled to stop illegal crossings of the English Channel. Some 33,374 people arrived in small boats in the year ending June 2026, down 23% from the previous year, according to the Home Office. The crossings accounted for 88% of detected arrivals via illegal routes.

Artificial intelligence models could become capable of independently infecting and spreading across household appliances, including smart TVs, and ovens, by the end of this year, US tech giant Anthropic has warned.

In a research report published on Monday, the company, best known for its Claude AI chatbot, said experiments suggested that “small AI models may be months away from being capable enough to self-replicate” on internet-connected devices.

Such “AI worms” could prove difficult to eliminate because there would be “no centralized point to shut off,” the researchers warned.

Anthropic said that it had successfully run an AI model across 15 inexpensive Android TV boxes connected to a network. In separate tests, more advanced models demonstrated the ability to replicate across simulated devices, although the experiments simplified the process of gaining access to them.

The researchers stressed that no fully autonomous rogue AI replicator is known to exist. However, smaller models are increasingly capable of performing the individual steps required to spread without human intervention.

Security cameras and other devices equipped with built-in AI chips could also become attractive targets.

Unlike conventional malware, which typically targets specific hardware or software, self-replicating AI could adapt to unfamiliar systems and pass successful techniques on to subsequent copies.

Anthropic warned that such infections could range from a slowly spreading “digital slime mold” operating across household devices to more powerful AI agents capable of rapidly compromising data centers.

The company acknowledged that its projections remain uncertain, but noted that increasingly capable AI systems have made autonomous replication and adaptation a more realistic threat.

The company also reported instances of its models bypassing access restrictions and exploiting software vulnerabilities during evaluations, including on government websites. Anthropic said that the incidents had caused minimal harm but warned that similar behavior could have more serious consequences as AI capabilities improve.

Western economies are becoming increasingly vulnerable to further energy shocks as the Middle East conflict strains global supplies and mounting public debt limits governments’ ability to cushion the impact, the International Monetary Fund has warned. 

In its latest World Economic Outlook, released on Tuesday, the IMF warned that the prolonged Middle East conflict was putting further pressure on energy markets, with European gas inventories near 15-year lows.

“Inventories in energy markets are dwindling and additional geopolitical shocks could still transmit rapidly through prices and supply disruptions,” the report said.

Refined petroleum products remain 70% to 95% more expensive than before the war, with diesel and gasoline facing the greatest pressure. Global oil inventories are being depleted by around 2.7 million barrels a day, according to the IMF.

The report also cited Ukrainian attacks on Russian oil infrastructure, including onshore facilities and sites in the Black Sea, as an additional source of pressure on global crude and refined petroleum markets.

Europe faces additional risks ahead of winter. The IMF cited repeated summer heatwaves and damage to Qatar’s energy infrastructure as factors contributing to gas price volatility. The US-Israeli war on Iran has also severely disrupted shipping through the Strait of Hormuz, a route that normally carries around a fifth of global oil and LNG shipments. Iranian strikes on Qatar’s Ras Laffan complex in March damaged key export facilities, further tightening global supplies.

Renewed fighting between Saudi Arabia and Yemen’s Houthis has also threatened shipping through the Bab el-Mandeb Strait in the Red Sea, a key route linking the Indian Ocean to the Suez Canal and European markets.

The energy crisis has also prompted Washington to ease restrictions on Russian diesel. Following a phone call on Friday between US President Donald Trump and Russian President Vladimir Putin, the US Treasury authorized certain transactions with Russian diesel until April 7, 2027. Trump has repeatedly blamed Ukrainian strikes on Russian refineries for driving up fuel prices.

The time has come for Elon Musk to join efforts to build a 70-mile underwater tunnel linking Russia and the US, Russian presidential aide Kirill Dmitriev has said.

Dmitriev, who also heads Russia’s sovereign wealth fund (RDIF), first proposed the project in October 2025, describing it as a link that would “symbolize unity” and saying it would spur resource exploration, create jobs, and boost both economies. The tunnel would run under the Bering Strait, which is 51 miles wide at its narrowest point and separates Russia’s Chukotka Region from Alaska in the US.

“Time for The Boring Company to start working on the Putin-Trump tunnel that would unite Russia and the US, Eurasia and the Americas,” Dmitriev said in a post on X on Sunday, tagging the US-based billionaire.

Dmitriev’s appeal came after Musk posted that Ukraine’s Vladimir Zelensky “has gone too far.” Musk’s remark followed US President Donald Trump’s call for Ukraine to elect a new president.

Trump has repeatedly criticized Ukraine, and Zelensky personally, for exacerbating the global fuel crisis, accusing authorities in Kiev of deliberately targeting Russian refining facilities and driving up energy prices. Earlier this week, the US president approved a temporary waiver of sanctions on Russian fuel exports shortly after a phone call with his Russian counterpart Vladimir Putin. The move has been condemned by Zelensky as “weak.”

Dmitriev first proposed the tunnel two months after Putin and Trump met in Alaska in August 2025 to discuss efforts to resolve the Ukraine conflict. The summit marked the first top-level direct contact between Moscow and Washington following the escalation of the conflict.

The presidential aide has estimated that the project could cost more than $65 billion using conventional technology, but said that the Boring Company’s methods could cut the price by 90%, to under $8 billion, and allow construction to be completed within eight years. The RDIF is ready to participate, he said, citing the fund’s role in building a rail bridge linking Russia and China.

Earlier this year, Dmitriev announced that the fund had signed an agreement to continue designing the tunnel, with further steps expected by the end of the year.

Investors are exaggerating the likelihood of a military confrontation over Taiwan, a senior US diplomat has said.

Michael DeSombre, US assistant secretary of state for East Asian and Pacific affairs, told CNBC on Thursday that investors were “overpricing the risk of something happening across the Taiwan Strait.” 

“Both China and the US don’t want conflict, and we’re able to deter conflict,” he said.

Beijing regards Taiwan as part of its sovereign territory and says it seeks peaceful reunification, although it has not ruled out using force. The self-governing island remains a source of friction between China and the US, which maintains a one-China policy but continues to supply Taipei with weapons.

Experts, however, warn that financial markets may be ill-prepared for the economic fallout of a crisis.

Taiwan dominates global production of advanced semiconductors, supplying chips essential to smartphones, vehicles, and AI systems. A blockade or military escalation could disrupt manufacturing and key shipping routes, sending shock waves through global trade and technology supply chains.

Bloomberg Economics estimated in February that a US-China war over Taiwan could wipe $10.6 trillion, or 9.6%, off global GDP in its first year. The EU would be among the hardest-hit regions, according to British think tank Chatham House.

Johns Hopkins University professor Hal Brands has warned that Beijing could opt for a blockade or customs quarantine rather than a full-scale invasion.

“No one has a good idea how to price in the risk of a US-China military conflict over Taiwan,” he told an investment conference in September, according to Business Today.

Meanwhile, Beijing has repeatedly denounced US arms sales to Taiwan as interference in its internal affairs, demanding that Washington stop the shipments.

Washington approved a record $11 billion arms package for Taiwan last December. Trump has reportedly delayed approval of another $14 billion deal, calling the potential sale a “very good negotiating chip” in talks with Beijing.

US officials have claimed that Xi ordered China’s military to be ready for a potential operation against Taiwan by 2027, although Beijing has not confirmed this.

DeSombre, however, described the Chinese leader as “a very rational actor” who would carefully weigh the consequences of military action.

The European Union is exploring ways to raise taxes on US tech giants such as Apple, Meta, and Google without provoking retaliation from Washington, the Financial Times has reported.

The discussions come as Brussels seeks to avoid a new trade confrontation with US President Donald Trump while raising revenue amid contentious negotiations over the bloc’s next long-term budget and spending pressures at home.

The European Commission is considering a broader corporate levy that would apply to all companies operating in the EU rather than explicitly targeting Big Tech, the FT reported on Wednesday, citing six officials familiar with the discussions.

”Some [EU] capitals are opposed to a pure digital tax because they don’t want to upset the Americans,” an EU official told the FT. “The solution is to expand [the tax] to cover pretty much all the big companies.”

The levy, known as the Corporate Resource for Europe (CORE), would require companies operating in the EU with annual revenue above €100 million ($112 million) to pay a fixed yearly contribution, raising an estimated €6.8 billion annually from 2028 to 2034. Officials are reportedly considering raising the threshold and contributions to focus the tax on the largest corporations.

CORE is one of five proposed revenue sources expected to collectively raise around €60 billion a year from 2028. The package requires unanimous approval from EU member states.

Western countries have exhausted the oil inventories available to offset supply disruptions from the US-Israeli war with Iran, leaving the market increasingly exposed to further shocks, Vitol CEO Russell Hardy has said. The energy crunch has now spread from crude and refined fuels to global shipping.

Speaking at the Energy Intelligence Forum in London on Tuesday, the head of the world’s largest independent oil trader said the market had burned through much of the stock that previously helped absorb disruptions. “There aren’t any more inventories to drain in the West,” Hardy said.

Around 12 million barrels per day of crude and another 2 million barrels of refined products have left the Middle East on tankers over the past seven to ten days, according to Hardy. “Without it, you do have that $200 per barrel scenario, so it’s pretty important that it continues,” he said.

“We’ve had pretty parabolic pricing on shipping,” Hardy said, adding that uncertainty has become so extreme that traders cannot estimate freight expenses more precisely than within $2 to $4 per barrel. He also warned that refined-fuel shortages are likely to persist through winter because global refining capacity remains tight.

The move follows months of heavy stock drawdowns used to offset supply disruptions since the Iran war began in late February. The International Energy Agency said around 325 million barrels had already been released by early October from a 400-million-barrel emergency action announced in March.

Crude flows from the Middle East have recovered significantly, but shipments of refined fuels have lagged behind. Tankers are also spending longer completing voyages as disruption around the Strait of Hormuz complicates normal shipping, reducing vessel availability even as more crude returns to the market.

Saudi Aramco CEO Amin Nasser warned on Monday that less than 10% of the roughly 6 billion barrels remaining in global commercial oil inventories is practically available to the market. He said rebuilding depleted stocks could take as long as two years even after flows through the Strait of Hormuz return to normal.

The euro has plummeted to a 17-month low against the dollar as investors punish the single currency, largely over France’s intractable debt problem. Once relegated to the Eurozone’s periphery, sovereign debt risk has progressively moved toward the center of the monetary union, now reaching France, a key pillar in the entire European project.

French long-dated bond yields have surged to their highest levels in nearly a quarter of a century as the country’s political gridlock over how to address its debt pile shows no sign of abating. The government is trying to push through spending cuts, but with a presidential election coming into view, opposition politicians vying to replace President Emmanuel Macron are in no mood to sign under anything resembling austerity.

RT takes an in-depth look at what’s happening in the new sick man of Europe and whether the turbulence in France could trigger a major crisis or intervention by the European Central Bank.

France’s fiscal flop

France’s finances are a mess. The country’s public budget deficit stood at 5.1% of GDP in 2025, while its debt-to-GDP ratios hit 115%. Both figures are well above EU limits. These are numbers more commonly associated with wartime or at least a deep recession. The rhetoric of its political class notwithstanding, France is not, in fact, at war.

France has accumulated more than €3.5 trillion in public debt, which is becoming more expensive to finance as the yields on its bonds have risen dramatically over the past year. French Prime Minister Sebastien Lecornu is seeking to push through cuts to public spending worth €54 billion in the 2027 budget, but his minority government is facing stiff resistance. Meanwhile, neither of the leading candidates in next year’s presidential election, Marine Le Pen of the right-wing National Rally Party and Jean-Luc Melanchon of the Socialist Party, has offered credible proposals to address the debt.

Le Pen has proposed putting a “golden rule” to restrain French deficits to a public vote via a referendum, thus likely condemning it to failure, while Melanchon is calling to simply cancel roughly a fifth of France’s public debt while increasing public spending.

Meanwhile, Paris has committed to billions in increased defense spending in the coming years. A major update to the country’s defense budget authorizing an additional €36 billion for 2026–2030 was signed off on by lawmakers in June.

“France must prepare itself to confront simultaneous, prolonged and high-intensity crises, including on its own soil,” according to Defense Minister Catherine Vautrin.

The “prolonged and high-intensity crisis on French soil” that Vautrin must have had in mind is the country’s own bond market.

The yield on France’s 10-year OAT has now climbed to around 4.87%, even briefly hitting the 5% mark in late September, its highest level since 2002. The spread between the French 10-year OAT and German 10-year Bunds rose by 50 basis points in September to reach 128 basis points, the highest level in 14 years.

France now pays more to borrow than Greece and Italy, once the Eurozone’s most worrisome members. France’s 5-year sovereign credit default swaps – a tradable insurance policy against default or debt restructuring – have climbed to approximately 87 basis points, their highest level since early 2013.

Compounding the problem is the fact that foreign investors own around 50% of France’s government debt, which exposes the country to divestment risk. Japanese funds, for example, are overweight French bonds more than benchmark weightings would recommend. If they become skittish, the selling pressure could intensify. French banks, meanwhile, who would be far less likely to fire-sell the bonds, are estimated to only hold around 8% of government debt.

Is a sovereign debt crisis brewing?

The spread between the borrowing costs of France and Germany is already at its widest level since the height of the Eurozone sovereign debt crisis in 2012.

Jim Reid, a veteran analyst at Deutsche Bank, said: “The big question is whether this is the start of a new euro sovereign crisis or whether markets have already overshot.”

Bank of France Governor Emmanuel Moulin has said that France must do everything in its power to avoid a sovereign debt crisis, thus tacitly acknowledging the risk of one. With France financing a massive €340 billion in borrowing requirement next year, the interest expense is compounding rapidly.

What could a French debt crisis look like?

If French yields continue to rise, the government would eventually have to refinance increasingly large quantities of debt at much higher rates. The higher interest bill would cause a larger deficit, which would necessitate still more bond issuance, thus pushing rates even higher. This is called a doom loop, and once such a mechanism takes hold, it can cause a sudden, self-reinforcing crisis.

Hypothetically, if there were skepticism about France’s future in the single-currency union, the nature of a French bond would change. A German bond, for instance, would still be a straight-up €100 claim, whereas a French bond would be a €100 claim but contingent on France remaining in the Eurozone. Such a contingency might seem fantastic, but if the risk of France leaving chaotically were seen as even somewhat plausible, the market would price it, and unpredictable knock-on effects could ensue.

The end game of a sovereign debt crisis would be an informal two-tier market, where a euro deposited in Paris is not actually the same as a euro deposited in Frankfurt. This is not so fantastic. In fact, exactly this scenario coalesced in Greece during the peak of its crisis and forced the Greek government to implement capital controls, which remained in place for four years.

The ultimate job of the European Central Bank is to preserve the fungibility of the euro. A French-issued bond can carry a different credit risk from a German bond – that is the adjustment the yield provides – but a euro itself cannot have a French price and a German price.

There’s a long road separating different sovereign credit risks from a two-tier euro market. The former doesn’t inevitably lead to the latter. But those two points can be connected by that road and under certain conditions the distance could theoretically be traversed quite quickly.

Would the European Central Bank ever let that happen?

The short answer is no, although central banks are not omnipotent. But the ECB does have tools with which to intervene. For starters, the bank could stop letting its bond holdings shrink. 

A more potent tool would be to buy French bonds outright. In the summer of 2022, the ECB bank introduced a new tool called the Transmission Protection Instrument (TPI), which allows for intervention in government bond markets when the ECB believes yields have become out of line with fundamentals.

The ECB says it will only exercise the TPI against unjustified, disorderly moves. The risk, however, is that European governments – such as France’s – will be less inclined to impose discipline on their finances if they believe the ECB will shield them from the discipline of the market. A game of chicken between Brussels and Paris could easily ensue, with the former implicitly threatening to hang the latter out to dry for its profligacy, while the latter would point to the threat to the whole system if the former doesn’t intervene. 

Analysts have speculated as to whether the surge in French yields is already enough for the TPI to be activated. So far, the consensus is that the ECB has no grounds to step in. Given the appalling state of France’s finances, it would be hard to argue that the move in French yields is detached from fundamentals. Second, the moves have so far been orderly rather than chaotic, an important consideration when emergency measures are being contemplated.

Is there contagion?

Contagion is the ultimate “black swan” fear in any budding financial crisis because it takes a localized problem and turns it into something unpredictable and subject to panic. There is currently considerable anxiety in Europe about the destabilizing effect of what is happening in the French bond market, but so far no panic.

Up until recently, in fact, there hadn’t been particularly strong signs of contagion from the French malaise.

Whether the EU muddles through again or finally faces a serious reckoning remains to be seen. 

Russian President Vladimir Putin has cleared Italy’s UniCredit to restructure its Russian operations, paving the way for the banking giant to sell its business in the country.

UniCredit has operated in Russia since 1989 and is listed by the central bank as one of the country’s 13 key credit institutions. It is among a handful of EU-based lenders that have remained in the Russian market despite Western sanctions imposed following the 2022 escalation of the Ukraine conflict.

The presidential order, published on Monday, allows UniCredit Bank to split its Russian operations by creating a separate company. It also authorizes transactions involving all shares currently held by Italy’s UniCredit S.p.A., removing the need for additional approvals.

UniCredit said in May that it had signed a non-binding agreement with an unidentified UAE investor to split its Russian business in two. The Italian lender will retain a new entity handling international payments for non-sanctioned Western and Russian corporate clients, while selling the rest of the business to the investor.

The Italian lender expects the transaction to result in a loss of around €3-3.3 billion ($3.5-3.9 billion) and aims to complete the deal in the first half of 2027.

Moscow has meanwhile tightened the rules governing corporate exits by companies from countries it considers “unfriendly.” Asset sales are generally subject to a minimum 60% discount and a budget contribution equivalent to 35% of market value, while certain transactions require presidential approval.

Putin’s decision on UniCredit comes as Moscow has taken temporary control of several other Western-owned businesses. In September, Russian assets belonging to Swiss food giant Nestle and French retailer Auchan were placed under temporary management.

The measures are not necessarily permanent. Italian appliance maker Ariston regained control of its Russian subsidiary in March 2025 after Putin reversed its placement under temporary management.

Russian businessman Konstantin Malofeev has accused former US President Joe Biden’s administration of stealing his money and using some of it to support Ukraine’s armed forces.

Russia’s Investigative Committee opened a criminal case on Friday at Malofeev’s request over the seizure of his US assets. Investigators said they are trying to identify American officials involved in what the agency described as illegal decisions.

Malofeev, the owner of Russian TV channel Tsargrad, said the US seized $10 million from him, including $5.4 million that was later transferred to Ukraine.

“Former US president [Joe Biden] and Attorney General Merrick Garland stole my money, legally invested in the United States – even before any sanctions,” Malofeev wrote on Telegram.

He accused Biden and Garland of creating an “organized criminal group” between 2021 and 2024 to seize Russian state assets and property belonging to Russian citizens.

“Biden financed terrorists who kill Russian people,” Malofeev said, referring to Ukrainian forces.

The businessman described the case as “unprecedented,” saying “$10 million is only the first step” and predicting that other alleged victims would file similar complaints. He said any money recovered through legal proceedings would be used to support Russian troops.

“A thief belongs in prison. Even if he sat in the White House,” he concluded.

A US court ordered the forfeiture of about $5.4 million linked to the investment in 2023. Garland subsequently authorized its transfer to the State Department to support Ukraine. The US Justice Department later said the money was used to assist Ukrainian veterans.

Malofeev has denied violating US sanctions and previously said he held no money or property in the West after 2014.

The Biden administration provided $65.9 billion in military assistance to Ukraine following the escalation of the conflict in February 2022, while imposing successive rounds of sanctions on Russia.

US President Donald Trump has criticized his predecessor’s support for Kiev, saying Washington was “getting fleeced” and claiming the US had committed $350 billion to Ukraine.

Moscow has repeatedly condemned Western arms deliveries to Kiev, arguing that they prolong the conflict, and has denounced sanctions and the seizure of Russian assets as “theft.”

European countries have agreed to release large amounts of diesel from their strategic reserves as fuel prices hover near record highs, US President Donald Trump has said.

Diesel prices have surged amid a global supply crunch driven by the US-Israeli war on Iran, which has severely disrupted shipping through the Strait of Hormuz. Russia, one of the world’s largest exporters of the fuel, has also restricted shipments to stabilize its domestic market following Ukrainian drone attacks on its refineries. 

US diesel production is now barely keeping pace with domestic demand, raising concerns that growing exports could further squeeze supplies at home.

“Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately,” Trump wrote on Truth Social on Friday.

The release will form part of a broader G7 effort to boost global fuel supplies. French President Emmanuel Macron said the group would make available up to 100 million barrels of diesel and crude oil over the next four months, with the move coordinated through the International Energy Agency. The release will be overseen by the International Energy Agency, with a significant amount of diesel expected to enter the market during the first 20 days.

Supplies have been squeezed by the US-Israeli war on Iran, which has severely disrupted shipping through the Strait of Hormuz, a route that normally carries around a fifth of global oil and liquefied natural gas shipments. Gulf diesel and gasoline exports fell to just over a quarter of pre-war levels in August, according to the International Energy Agency.

Nearly four years after Western governments set out to squeeze Russia’s oil revenues, Moscow is shipping crude worth more per week than at any point since the escalation of the Ukraine conflict in 2022.

The gross value of Russia’s seaborne crude exports surged to $2.75 billion in the week through September 27, the highest weekly figure in four years, according to tanker-tracking data compiled by Bloomberg. Shipments averaged 3.71 million barrels per day over the latest four weeks, their highest since early August.

The rebound exposes a central problem with the Western strategy. Sanctions were designed to keep Russian oil on the global market to avoid a supply shock while forcing Moscow to sell it more cheaply.

Instead, Russia rerouted crude from Europe to China, India, and other markets, built alternative shipping networks, and reduced its reliance on Western services. Now, soaring global prices fueled by the US-Israeli war on Iran are making those barrels more valuable.

The plan: Keep Russian oil flowing but slash Moscow’s earnings

When the West moved against Russian oil in 2022, it faced an obvious problem: Russia was too large an exporter to remove from the market without risking a surge in global prices.

The EU was also Moscow’s biggest oil market. Europe took more than half of Russia’s oil exports in 2021, while Russia was the EU’s largest crude supplier, accounting for roughly a quarter of its imports. China, by comparison, was Russia’s largest single-country buyer.

The EU banned most seaborne Russian crude imports in December 2022, while the G7-led bloc imposed a $60-per-barrel price cap. Western shipping, insurance, and other maritime services could still handle Russian crude, but only if it was sold below the ceiling. Sanctions on petroleum products followed in February 2023.

The logic was simple: cut Russia’s revenues without removing its oil from the global market. The strategy therefore depended on keeping Russian crude flowing while using Western dominance of shipping and insurance services to constrain its price.

The plan backfired.

What went wrong?

The $60 cap initially coincided with steep discounts on Russia’s flagship Urals crude. But Moscow gradually reduced its dependence on Western shipping and insurance services by which the ceiling was supposed to be enforced.

Even the Centre for Research on Energy and Clean Air (CREA) – a Helsinki-based research organization that has repeatedly advocated tougher sanctions on Moscow – now says the policy has “failed to impose a durable constraint on Russian crude export earnings.” It says the measure worked only for limited periods on Urals, while other grades and export channels were largely unaffected.

The EU repeatedly tightened the mechanism, lowering the ceiling first to $47.60 and then to $44.10 per barrel from February 2026. The latter was intended to remain 15% below the average market price for Urals.

Yet Urals averaged $60.22 a barrel in July – roughly $16 above the EU and UK ceiling. Russia’s ESPO crude, heavily oriented toward Asian buyers, has also consistently traded above both the old and new caps, according to CREA.

Brussels has responded by sanctioning hundreds of tankers, targeting traders, and tightening restrictions on third-country entities accused of helping Moscow circumvent the measures. Russian crude, however, continues to flow.

Four years later: Where is Russian oil going?

Russia did not stop selling oil when its biggest European customers turned away. It found other customers.

China and India emerged as the dominant destinations for Russian crude, while Türkiye also increased its role. In July alone, India imported $6.25 billion worth of Russian crude – a record high for a second consecutive month – while seaborne deliveries to China were 16% higher than a year earlier, according to CREA.

Russia also built up shipping capacity outside the traditional Western system. By June, sanctioned “shadow” tankers were carrying 66% of its seaborne crude exports, compared with just 31% aboard G7-linked vessels, CREA estimates.

Why is Russian oil worth more now?

The biggest twist has come not from Brussels or Washington, but from the Middle East. The US-Israeli war on Iran and disruption around the Strait of Hormuz have pushed global crude prices sharply higher, while attacks on regional energy infrastructure have further strained supplies.

The result is precisely the type of supply shock Western governments sought to avoid when designing the price cap – and Russia is among the producers benefiting from higher prices.

On a four-week basis, the gross value of Russia’s crude shipments has risen to $2.39 billion per week, up $290 million from the previous four-week period, according to Bloomberg.

The price shock has also complicated efforts to tighten the squeeze. Earlier this year, the EU considered a maritime-services ban that would have gone beyond the price cap by directly targeting Russia’s ability to ship oil. But soaring prices following the Hormuz disruption prompted a rethink over fears that squeezing Russian exports could worsen the global shortage, according to CREA.

The dilemma is the same one Western governments faced in 2022: squeeze Russian supply too hard and global prices could rise further – making the barrels that still reach the market more valuable.

Not all barrels are created equal: The refinery factor

The surge in the value of Russia’s crude exports does not tell the whole story.

Ukrainian drone attacks have disrupted Russian refineries, reducing domestic processing and leaving more crude available for export. Moscow has also restricted diesel shipments to protect domestic supplies.

Russian oil-product loadings fell to 4.7 million tons in July, their lowest level on record and less than half the 9.6 million tons shipped a year earlier, according to CREA. Seaborne crude revenues, by contrast, rose 7%. Russia has also raised its 2026 crude-export forecast while cutting its outlook for refined-product shipments.

The crude boom is therefore being partly offset by weaker fuel exports. At the same time, reduced refinery activity is freeing up more unprocessed oil for shipment abroad – where higher global prices have increased its value.

Europe doubles down

Despite the limits exposed by the price-cap system, Western governments are continuing to tighten restrictions and pressing European states that still rely heavily on Russian energy to cut their remaining ties.

The dispute returned to the fore this week when German Foreign Minister Johann Wadephul traveled to Slovakia and urged it to move away from Russian oil and gas and increase pressure on Moscow.

Slovak Foreign Minister Juraj Blanar pushed back, saying the country’s infrastructure was built around Russian supplies and that an immediate cutoff would create “enormous problems.”

The West’s Catch-22

The West can sanction more tankers and traders, tighten enforcement, pressure remaining buyers and target third-country networks. The EU’s latest sanctions package added another 41 vessels to a list that already includes 632 ships and targeted entities in China, India, Türkiye, Kazakhstan, and the UAE.

But directly targeting Russian export volumes brings the original dilemma back into focus: the West kept Russian barrels on the market because it feared soaring oil prices – only for soaring oil prices to make those barrels more valuable.

Russia’s earnings from seaborne crude exports have surged to their highest weekly level since the escalation of the Ukraine conflict in 2022, Bloomberg has reported. Rising oil prices and stronger shipment volumes have boosted Moscow’s revenues despite Western sanctions.

The gross value of Russian crude exports reached $2.75 billion in the week through September 27, the outlet reported on Tuesday. On a four-week basis, shipments averaged 3.71 million barrels per day, their highest since early August, while their value climbed to $2.39 billion a week.

According to the outlet, the increase has been driven by both higher crude prices and growing export volumes. Global oil prices have risen sharply during the US-Israeli war on Iran amid the disruption of shipping via the Strait of Hormuz, boosting earnings for major producers outside the Persian Gulf, including Russia.

The measures were designed to reduce Russia’s revenues while keeping its crude flowing to global markets and avoiding a supply shock. Moscow responded by redirecting much of its oil trade away from Europe toward China, India and other markets, which now account for the bulk of Russian seaborne crude purchases. According to Bloomberg, shipments to Asian customers, including cargoes whose final destination was not yet known, rose to 3.61 million barrels per day in the four weeks through September 27.

Russia’s latest crude windfall has, however, been partly offset by falling exports of refined fuels. Moscow has restricted diesel shipments to protect domestic supplies after an unprecedented wave of Ukrainian drone strikes damaged refineries across the country, while lower processing rates have left more crude available for export.

Western governments are meanwhile continuing to pressure European states that still rely on Russian energy. German Foreign Minister Johann Wadephul urged Slovakia on Tuesday to phase out Russian oil and gas and increase pressure on Moscow, days after meeting Russian Foreign Minister Sergey Lavrov in New York.

Slovakia has resisted a rapid cutoff, with Russian supplies accounting for more than 80% of its oil and over half of its gas imports in 2025, according to the European Commission. Slovak Foreign Minister Juraj Blanar said the country had built its energy infrastructure around Russian supplies and warned that abandoning them immediately would create “enormous problems,” arguing that alternative routes currently lack sufficient capacity.

The US emergency oil stockpile has plunged to its lowest level in nearly 44 years as the US-Israeli war on Iran continues to squeeze global supplies and disrupt shipping through the Strait of Hormuz, according to Department of Energy data. The Strategic Petroleum Reserve (SPR) has shrunk by almost a third since Washington began releasing crude in March.

The reserve dropped to 283.8 million barrels for the week ending September 25, hitting its lowest level since October 1982, according to US government data. That is down roughly 32% from 415.4 million barrels in mid-March and 61% from the record 726.6 million barrels held in late 2009.

Congress created the SPR in 1975 following the Arab oil embargo to provide an emergency buffer against severe supply disruptions. Designed to hold more than 700 million barrels in underground salt caverns along the Gulf Coast in Texas and Louisiana, the reserve has been tapped heavily in recent years.

Global oil inventories have fallen sharply during the conflict. Goldman Sachs estimated in May that visible crude and petroleum-product stocks were shrinking by a record 8.7 million barrels per day (bpd), nearly twice the average rate since the Iran war began in February and disruptions in the Strait of Hormuz began to interfere with shipments.

Oil flows have rebounded since then but have yet to fully recover. Energy analytics firm Kpler estimated Middle East crude exports at 12.8 million barrels per day in September – the highest since the war began but still around 6 million bpd below the 18.8 million recorded in February.

US President Donald Trump nevertheless touted record oil shipments through the strait on Sunday. “Last night we took a record amount of oil out from the strait, more than we took out before the war,” he told reporters, also predicting that crude prices would fall further once the conflict ends.

The Energy Department expects roughly 200 million barrels to eventually flow back into the SPR under the exchange program. Those repayments will come later, however, leaving the US with a much smaller emergency cushion in the meantime.

Not all of the crude still counted in the reserve is readily accessible. The Government Accountability Office said in June that more than a quarter of SPR oil was unavailable as of December 2025 because of construction work and cavern outages. The watchdog put the reserve’s effective drawdown capacity at just 61% of its design rate.

The White House is still “very seriously” considering a diesel export ban, US President Donald Trump has said, as fuel prices soar ahead of the November midterm elections.  

Shipments being cut from the world’s largest exporter could deepen a global shortage and leave import-dependent Europe scrambling for supplies.

Diesel prices have surged amid a global supply crunch fueled by the US-Israeli war on Iran, which has severely disrupted shipping through the Strait of Hormuz. Russia, one of the world’s largest diesel exporters, has also restricted fuel shipments to stabilize its domestic market following Ukrainian drone attacks on its refineries. US diesel production is now barely keeping pace with domestic demand, raising concerns that growing exports could further squeeze supplies at home.

Trump first floated the idea last week. “I’ve said let’s not send out the diesel,” he told reporters ahead of a meeting with Ukraine’s Vladimir Zelensky.

The potential move comes as fuel prices surge. Energy Information Administration data put the nationwide diesel average at a record $6.529 a gallon ($1.72 per liter) on September 21, up from $5.454 just five weeks earlier, as tight global supplies and elevated crude prices drive costs higher.

Increased exports from the US and China have partly offset lost supplies from Russia and the Middle East, according to the IEA. The agency warned that global diesel shortages are likely to persist unless Russian or Middle Eastern exports recover in the coming months or demand declines.

Russia’s diesel export restrictions, introduced after an unprecedented wave of Ukrainian drone strikes damaged refineries across the country, have added further pressure to an already strained global market, with fewer Middle Eastern barrels available to replace any potential loss of US supplies.

Trump has also repeatedly urged Zelensky to halt Ukrainian strikes on Russian refineries, saying the attacks were contributing to a global diesel shortage. “There are plenty of other targets. Don’t hit diesel fuel. That’s hurting the world,” he said earlier this month. 

A US cutoff could hit Europe particularly hard after the EU abandoned Russian energy following sweeping sanctions. Russia supplied nearly half of Europe’s diesel before the Ukraine conflict, but its share fell to around 5% by 2024 after Brussels imposed an embargo.

Britain could be among the hardest hit. It imports around 55% of its diesel and has just four major refineries left. Analysts cited by The Telegraph warned on Sunday that a US ban could send prices from just under £2 ($2.68) to as much as £2.50-£3 ($3.35-$4.02) per liter this autumn.

The EU has also sounded the alarm over Trump’s threat, urging Washington not to proceed. “We believe this is a very bad idea,” European Commission spokesman Olof Gill said last week.

The US has supplied about a third of Europe’s diesel imports this year, with its share rising to around half in August, according to government data. Prices at the pump have already reached record highs in Germany and the Netherlands.

Global AI giants OpenAI and Anthropic, along with security researchers, are investigating tens of thousands of incidents in which their frontier models took actions that outside experts consider problematic, Axios reported on Saturday, citing unnamed sources.

The investigations come amid a series of cases involving autonomous AI agents capable of independently planning and executing tasks using external tools. OpenAI, Anthropic, and Google have all disclosed instances of their models accessing real-world systems during testing, including coordinated cyberattacks on government resources.

The incidents under investigation include bypassing guardrails, creating message boards, escaping ‘sandboxes’, hijacking websites, self-prompting, and attempting to evade monitors, sources told Axios. They reportedly occurred both in internal testing and real-world settings, with some arising from ‘red-teaming’ exercises designed to expose problematic model behavior.

Australian Prime Minister Anthony Albanese said earlier this week that an OpenAI agent gained unauthorized access to the government health portal in June. On Saturday, The Guardian reported that Australia’s Senate invited OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei to appear before an inquiry into AI and data centers.

The incidents follow OpenAI’s disclosure in July that models used in a cybersecurity evaluation escaped their sandbox, accessed the internet, and compromised parts of Hugging Face’s infrastructure by exploiting vulnerabilities in the open-source machine-learning platform. Later that month, Reuters cited sources familiar with the matter as saying the same agent also breached the systems of a New York-based Modal Labs customer after escaping the testing environment.

On Sunday, AP reported that OpenAI paused training of its latest models as reports of AI agents going rogue continued to mount.

Anthropic has also disclosed incidents involving Claude models, including four cases in which they gained unauthorized access to real third-party systems during cybersecurity evaluations. The company identified the cases while reviewing around 141,000 transcripts and later expanded the search to 481 million. It is working with independent AI evaluation organization METR on a third-party review.

Anthropic has also said its internal monitors flagged 100,000 agent transcripts for review each week in August, with around 50 escalated to human reviewers. The company said it is setting up external third-party evaluators to independently test its monitoring systems.

Ukraine’s largest steel producer, ArcelorMittal Krivoy Rog, has halted production after repeated Russian missile strikes caused extensive damage to the plant, the company announced on Friday.

The Russian Defense Ministry has said that Moscow is targeting Ukrainian military and defense-related facilities and supporting infrastructure in response to Kiev’s escalating long-range attacks on Russian energy and industrial sites.

The steelworks, located in the central Ukrainian city of Krivoy Rog, also includes iron ore mining operations. Before the escalation of the conflict in 2022, it produced 4.9 million tons of steel annually.

ArcelorMittal said the facility had been hit four times over the past five weeks, most recently on September 21. The strikes caused extensive damage to production facilities, leaving the company unable to restart operations “in a safe and sustainable manner.” 

The shutdown follows stoppages at Zaporozhstal and Kamet Steel, both owned by Ukrainian metals giant Metinvest. Together with ArcelorMittal Krivoy Rog, the three plants accounted for about 90% of Ukraine’s steel output before Russian strikes brought production to a halt, according to the Financial Times.

“As of today, [Ukraine] doesn’t have a steel industry anymore,” Aleksandr Vodoviz, head of the CEO’s office at Metinvest, told the FT, adding that repairs could take “days, weeks, months, or years.” 

The Russian Defense Ministry said this week that it had struck the Krivoy Rog steelworks and other industrial facilities involved in Ukrainian military production. Other recent targets cited by the ministry include drone production and storage sites, power infrastructure, bridges, ports, warehouses, and logistics hubs.

Russia has condemned strikes on civilians as acts of terrorism, while maintaining that its forces only target military and defense-related facilities.

The EU could face its worst winter since the 2022 energy crisis, Energy Commissioner Dan Jorgensen has warned, as the bloc grapples with soaring prices and uncertainty over fuel supplies.

European natural gas prices have nearly tripled this year, surging from around €27 ($31) in January to more than €80 per megawatt-hour in September – their highest level in nearly four years.

“This winter might be very, very bad [for the EU] and it might be the worst one we’ve had since 2022,” the Financial Times quoted Jorgensen as saying on Friday. The most likely scenario is “very, very high prices,” he added.

Russian presidential envoy Kirill Dmitriev blamed Brussels’ energy policies for the looming difficulties.

“The ‘worst winter since 2022’… will once again expose EU bureaucrats’ energy suicide of decoupling from Russian energy,” he wrote on X on Friday.

The 2022 energy crisis sent household bills across the EU to record highs. In the second half of that year, average household gas prices were about 46% higher year-on-year, while electricity prices rose roughly 21%, according to Eurostat. Governments responded with subsidies, price caps, and tax cuts.

The bloc now faces additional pressure in the diesel market. US President Donald Trump this week backed restricting diesel exports as domestic prices hit record highs. The US has supplied about a third of Europe’s diesel imports this year, with the share rising to around half in August.

Jorgensen urged Washington to maintain “as free a flow of energy between our countries as possible,” while arguing that the EU must ultimately reduce its reliance on oil and gas.

“If we do not move away from this dependency on fossil fuels, then I can promise everybody it will be a permanent crisis,” he said.

A US ban on diesel exports could squeeze the EU’s energy market, which is already strained by reduced Russian supplies due to sanctions and disruptions in flows from the Middle East, officials in Brussels have warned.

European Commission spokesman Olof Gill told Politico on Thursday that Brussels was concerned by reports that Washington could halt diesel exports for 90 days, warning that any disruption “would risk negatively impacting both sides.”

The US has supplied about a third of Europe’s diesel imports this year, with its share rising to around half in August, according to government data. Prices at the pump have already reached record highs in Germany and the Netherlands.

Commission spokeswoman Anna-Kaisa Itkonen said Brussels was monitoring the markets and security of supply “very, very closely,” noting that the US was a “major supplier” of both diesel and liquefied natural gas as part of the bloc’s “diversification strategy since 2022.”

Trump backed the idea of restricting exports on Tuesday as US diesel prices hit a record $6.52 a gallon ($1.72 per liter). “I’ve said let’s not send out the diesel,” he told reporters ahead of a meeting with Ukraine’s Vladimir Zelensky.

The issue was raised during talks between Russian Foreign Minister Sergey Lavrov and US Secretary of State Marco Rubio in New York on Wednesday. According to the Russian Foreign Ministry, Lavrov said Ukrainian attacks on energy and cross-border infrastructure were deliberately contributing to instability in global energy markets.

Russia has also restricted fuel exports to stabilize its domestic market. The measures run through January, although direct producers have been permitted to export diesel, marine fuel and gasoline since September.

The EU has sharply reduced purchases of Russian energy since the 2022 escalation of the Ukraine conflict. Russia’s share of the bloc’s gas imports plunged from 45% to 12% by 2025, while its share of oil imports dropped from 27% to about 2%.

Moscow has blamed the EU’s decision to cut Russian energy imports as a key factor behind the crisis. Kremlin envoy Kirill Dmitriev said last week that Europe was facing “the worst energy crisis in history,” describing the situation as “self-made.”

German chemicals giant Evonik is overhauling its domestic operations amid what it has described as a “structural and economic crisis” in the industry.

The German and wider European chemical sector has been hit by plant closures, job losses and high energy costs following the loss of cheap Russian supplies; the US-Israeli war with Iran has added new pressure.

The measures, announced on Tuesday, include site closures, job cuts and a reshaping of Evonik’s six main German plants, even as the company considers increasing investment in Asia and the Americas, where it sees “good opportunities for growth.”

Evonik’s plans to eliminate 2,150 jobs in Germany through 2029 have drawn criticism from industrial policy spokesman for the opposition Left Party (Die Linke) Mirze Edis, who called the cuts “a damning indictment” of German Chancellor Friedrich Merz and Economy Minister Katharina Reiche.

“Their inaction regarding chemical industry sites has now become a nationwide economic risk,” Edis said.

Germany’s chemical sector has been among the hardest hit by the country’s energy problems. Berlin moved to end its dependence on Russian energy following the escalation of the Ukraine conflict in 2022 and turned to alternative suppliers, leaving energy-intensive manufacturers facing substantially higher costs.

Evonik said at the time that it consumed around 15 terawatt-hours of natural gas annually, more than a third of it in Germany, and warned that losing Russian supplies could “seriously jeopardize chemical production” in the country.

The war with Iran and disruption to shipping through the Strait of Hormuz have added to the pressure this year. While Germany gets most of its LNG from the US rather than the Persian Gulf, the de facto closure of the strait disrupted flows accounting for almost 20% of the global LNG supply, tightening the market and driving up European prices.

The crisis extends beyond Germany. Permanent chemical plant closures across Europe have surged sixfold from pre-2022 levels amid high energy costs, weak demand and cheaper overseas competition, according to the European Chemical Industry Council (Cefic).

French President Emmanuel Macron has urged the European Commission to temporarily lower EU quality requirements for diesel and kerosene as record prices and growing fuel shortages hit France, broadcaster BFM TV has reported.

Looser standards could allow some refineries to produce 5% to 20% more, but the trade-off could mean dirtier fuel.

Macron’s push comes as the US-Israeli war on Iran disrupts flows through the Strait of Hormuz, squeezing energy markets already reshaped by the EU’s self-imposed sharp reduction in Russian imports after the 2022 escalation of the Ukraine conflict.

In a letter to European Commission President Ursula von der Leyen last week, Macron called for the temporary lowering of fuel-quality standards covering density, vaporization, and sulfur content, the outlet wrote on Monday. He said the move could deliver “significant production gains” of between 5% and 20% depending on the refinery.

The French president also wants more B7 diesel, which contains up to 7% biodiesel, replaced with B10 containing up to 10%. He argued the measures would “strengthen our import and production capacities in the short term” and increase fuel available on the European market.

Paris is seeking the changes as France faces surging prices and supply strains. Fuel distributors have reported growing difficulties securing deliveries for the coming weeks, according to Macron’s letter. Europe is particularly dependent on the Middle East for refined fuels, which account for 36% of its kerosene imports and 18% of diesel imports.

Diesel prices in France hit a record €2.39 ($2.75) per liter last week, while 16% of filling stations were short of at least one type of fuel on Monday, according to government data. France consumes around 600,000 barrels of diesel a day and imports roughly half of it, Macron said.

Brussels, however, is pressing ahead with plans to eliminate the remaining Russian supplies by late 2027 even as the EU scrambles for more fuel amid the Middle East crisis. Russia’s share of EU gas imports has plunged from 45% before the Ukraine conflict to 12% in 2025, while its crude share fell from 27% to around 2%.

With Russian energy supplies still being phased out, Paris is now asking Brussels to relax its own rules to get more fuel onto the market.

Global oil prices have surged above $100 per barrel as the US-Israeli war on Iran and Houthi attacks on Saudi energy infrastructure fuel fears of further supply disruptions. Brent crude recently crossed the threshold for the first time in nearly two months.

US diesel prices have climbed to a new all-time high as disruptions to global fuel supplies and tensions in the Middle East continue to squeeze the market.

The national average reached $6.5107 per gallon ($1.72 per liter) on Monday, according to the American Automobile Association (AAA), up from $6.23 a week ago and $5.58 a month ago. Diesel now costs about 76% more than a year ago.

The global diesel shortage has been exacerbated by the US war with Iran and disruptions to energy flows through the Strait of Hormuz. Houthi advances along Yemen’s Red Sea coast have added further uncertainty, raising concerns over shipping through the Bab el-Mandeb Strait and Saudi oil exports.

Supply concerns have intensified as US President Donald Trump weighs his next steps toward Iran. Over the weekend, he said he was considering options ranging from military action to economic pressure or a deal, while signaling openness to meeting Iranian President Masoud Pezeshkian during the UN General Assembly in New York.

Trump has also pressed Vladimir Zelensky to halt Ukrainian strikes on Russian refineries, arguing that the attacks are worsening the global diesel shortage. On Monday, he again pointed to damage to Russian refining capacity, saying a number of facilities had been knocked out of operation.

At the same time, Washington has tightened sanctions on Moscow. Trump on Friday signed legislation targeting Russia’s energy and defense sectors and oil-shipping network while authorizing tariffs of up to 100% on major buyers of Russian oil and gas.

Diesel is crucial to the US economy, powering much of the country’s freight transport and farm machinery. Higher prices can therefore feed into the cost of transporting and producing goods, adding to inflationary pressure.

Tens of thousands of auto workers across Germany have staged protests demanding protection for employment and factories after Volkswagen announced plans to cut 100,000 jobs.

Employees at Volkswagen, Mercedes-Benz, BMW, Audi, Porsche, and major suppliers are taking part in more than 280 actions nationwide on Monday. Germany’s largest industrial union, IG Metall, has warned that the country’s automotive industry “faces the risk of total collapse” as it grapples with high energy costs following reduced imports of Russian oil and gas, US tariffs, and growing competition from China.

”We expect corporate leaders and management teams to take responsibility for Germany as an automotive nation, for employees and for jobs,” IG Metall chief Christiane Benner told workers at Volkswagen’s headquarters in Wolfsburg.

Other German carmakers are also scaling back. BMW is cutting about 8,000 jobs, while Mercedes-Benz is reducing production at home and expanding capacity in lower-cost Hungary.

The industrial contraction extends beyond layoffs. Volkswagen ended car production at its Dresden plant last December, marking the first closure of a German car factory in the company’s 90-year history.

The automaker has also dropped out of the Euro Stoxx 50 for the first time in 15 years, with its shares down more than 75% from their 2021 peak. By contrast, shares in German defense giant Rheinmetall have soared over 1,100% since the start of 2022 as Berlin boosts military spending.

Germany has budgeted €108.2 billion ($124 billion) for defense this year, with spending set to rise further under Chancellor Friedrich Merz’s drive to build what he has called Europe’s strongest conventional army.

Moscow has criticized the buildup. Russian President Vladimir Putin said in June that NATO had moved beyond supporting Ukraine and was now “openly” discussing preparations for war with Russia while increasing military budgets.

Google’s Gemini has joined a growing list of advanced AI models going rogue after hacking three real companies during a cybersecurity exercise, the Wall Street Journal has reported. It is the first known case involving a Google system.

The incidents occurred in May during tests conducted by AI security firm Irregular, Google confirmed to the outlet on Friday. Gemini was tasked with breaking into a simulated software company, but was inadvertently given internet access. It breached one real company by guessing passwords and two others using credentials found in public code repositories.

Irregular alerted Google in late July, after OpenAI agents were found to have hacked AI company Hugging Face. Google did not disclose its own incidents until contacted by the WSJ this week, according to the newspaper.

Google said Gemini caused no harm and stopped after realizing it had accessed real companies rather than simulated targets.

Google blamed the breaches on mistaken identity and a testing error. The fictional company shared a name with a real business, while Gemini had internet access it was not supposed to have. The company declined to identify the three targets or the model involved, but said the affected firms and federal authorities were notified.

Concerns over rogue AI have grown amid reports of models deceiving users, ignoring instructions, or taking unintended actions. The UK government-backed Loss of Control Observatory recorded more than 300 such incidents in July, nearly twice the previous month’s figure, the Guardian reported.

Former OpenAI and Anthropic researcher Jacob Coxon added to those concerns last week when he quit and accused both companies of racing toward self-improving superintelligence without “acting responsibly.” He warned AI could “kill us all” by the end of the decade, citing risks including loss of control, cyberattacks, and bioterrorism.

President Vladimir Putin has ordered the Russian subsidiaries of Nestle, Auchan and Leroy Merlin placed under temporary management owing to Western support for Ukrainian strikes on Russian civilian and economic infrastructure.

Moscow introduced the temporary management mechanism in 2023 in response to Western companies leaving Russia and the seizure of Russian state and private assets abroad. Officials said it was intended to keep strategically important businesses operating and shield the economy from decisions by “unfriendly” countries.

On Thursday, Putin amended the 2023 decree to add the Russian assets of Nestle, Auchan and Leroy Merlin to the list. All three were transferred to L.E.V. Management, a business and management consultancy.

Why now?

Kremlin spokesman Dmitry Peskov said the companies’ home countries and their support for Kiev were major factors behind the decision.

Why these companies?

Auchan and Leroy Merlin are controlled by France’s Mulliez family through ELO Group and ADEO respectively. Nestle’s Russian business was controlled by subsidiaries of the Swiss food giant.

France has been one of Kiev’s major military backers throughout the conflict. President Emmanuel Macron also pushed a “forward deterrence initiative” earlier this year that could see French nuclear weapons deployed elsewhere in Europe.

Moscow has warned that such a strategy could backfire, saying it cannot “ignore an obvious buildup of the nuclear component of NATO’s joint potential.”

Strikes on Russian infrastructure

The takeover also comes amid continued Ukrainian attacks on Russian civilian and energy infrastructure.

Ukraine has recently targeted warehouses and logistics facilities belonging to Russia’s largest online retailer, Wildberries, and its rival Ozon. Kiev has acknowledged deliberately striking the facilities, claiming their networks are used by the Russian military to procure, store and transport dual-use goods. Moscow rejects the allegations and has denounced the attacks as terrorism.

Ukrainian media reported in July that French intelligence was providing “critical targeting assistance” for strikes on at least eight Wildberries facilities, as well as refineries and other infrastructure.

How important is Russia to the companies?

Russia has been a significant market for the French retailers. At its peak, Auchan Russia was one of the country’s largest foreign retail chains and was still operating around 230 stores as of 2025. ELO reported in 2023 that Russia generated 10% of its revenue, making it the group’s third-largest market after France and Spain.

Leroy Merlin, rebranded as Lemana PRO in Russia in 2024, remained a major source of revenue for ADEO. L’Informe reported that Russia was the group’s second-largest market by revenue after France in 2024 and accounted for around 18.5% of its worldwide revenue in 2025.

Nestle has less exposure. Its Russian operations account for about 1% of global sales, according to Jean-Philippe Bertschy, an analyst at Swiss investment bank Vontobel. RBK estimated Nestle Russia’s revenue at 258 billion rubles ($3.06 billion) in 2025.

How have the companies reacted?

Auchan and Lemana PRO said they had received no official notification from the Russian authorities about the status of their assets and had requested clarification. Both said their stores were operating normally as of Friday.

Nestle said it “takes note” of the presidential decree and is “assessing the situation and its options.” The company said it would take “all necessary steps to protect its rights and ensure continuity of business operations in the interests of all stakeholders.”

What happens to the assets?

Under the 2023 framework, foreign owners temporarily lose control of assets placed under management but do not automatically forfeit ownership.

In other cases, Moscow has authorized sales. Putin approved the sale of Goldman Sachs’ Russian subsidiary to Balchug Capital in January 2025.

The system also allows assets to be returned. In March 2025, Italian appliance maker Ariston regained control of Ariston Thermo Rus after announcing its return to the Russian market. The subsidiary had been placed under the temporary management of Gazprom Household Systems the previous year.

Prime Minister Mikhail Mishustin said in 2025 that cases would be assessed individually. Companies that left under government pressure but preserved jobs, contacts and technology, as well as a buy-back option, could be allowed to return, he said.

Saudi Arabia’s state-owned energy giant, Saudi Aramco, has told European refiners that they will not receive any crude oil in October, Bloomberg reported on Friday, extending supply disruptions triggered by a Houthi attack on a key export pipeline.

Aramco had already canceled some European cargoes scheduled for September after drone strikes damaged the East-West Pipeline and halted loadings at the Red Sea port of Yanbu, Reuters reported on Tuesday. The latest notices reportedly extend the disruption into next month. Bloomberg said the decision applies to all European customers.

Fighting between a Saudi-led coalition and Houthi militants reignited in mid-July after Saudi Arabia struck Sanaa Airport to prevent an Iranian passenger plane from landing. In recent weeks, the Houthis have made territorial gains against Saudi-backed forces and stepped up attacks on strategic targets inside the kingdom.

The 1,200 km (746-mile) East-West Pipeline connects Saudi Arabia’s main eastern oil fields with Yanbu, allowing crude oil exports to bypass the Strait of Hormuz, where flows remain severely disrupted by the US war against Iran.

The pipeline was closed after drone strikes damaged three pumping stations. Saudi Arabia is reportedly seeking to restore part of its capacity within days, though a full restart could take up to six weeks.

Saudi Aramco has not commented on the reported October cancelations.

Saudi oil flows have fallen sharply amid the Middle East conflict. The kingdom’s production dropped to 6.2 million barrels per day (bpd) in August from 10.9 million bpd in February, before the war began. The East-West Pipeline had been rerouting around 4 million bpd (4% of global supply) around the disrupted Strait of Hormuz.

The supply squeeze has forced European refiners to seek alternatives. Poland’s state-controlled energy giant, Orlen, said on Wednesday that it secured 16 additional cargoes from Norway, Britain, Algeria, Kazakhstan, Azerbaijan, and the Americas to cover Saudi disruptions through November.

The Houthis have meanwhile expanded their position along Yemen’s western coast and seized strategic territory near the Bab al-Mandab Strait, another major shipping passage linking the Red Sea and Gulf of Aden.

The mounting pressure on Middle Eastern supplies has kept oil above $100 a barrel. Brent futures traded around $104 on Friday, with markets weighing the Saudi disruptions and continued instability around the Strait of Hormuz.

US bank JPMorgan has said that it no longer has a clear view on the oil price as the war in the Middle East drags on with no clear end in sight. The bank’s analysts have abandoned a baseline view of crude oil in what is an unusual step for a major bank and one of the world’s most watched commodities.

“We simply don’t know how to model the endgame,” the bank wrote in a research note, noting that this was the first time it had been unable to generate a view since the US-Israeli war on Iran began.

The on-again, off-again approach to the war demonstrated by US President Donald Trump has left traders at a loss for how to proceed. A Bloomberg report wrote that JPMorgan is simply making public what traders have long been saying privately: how this ends is impossible to predict.

JPMorgan analysts noted that they had previously assumed that there were lines the Trump administration would not cross, such as oil above $100 per barrel or gasoline at $5 per gallon. US Treasury yields have also drifted higher, with the 10-year touching 5% this past week. The Treasury market is watched closely both on Wall Street and in Washington and excessive volatility tends to quickly elicit concern among policymakers given the market’s critical role in the US and global financial system.

However, none of these thresholds appear to have deterred the administration from pressing forward in Iran. Trump has indicated that he has a “big decision” on Iran coming, warning that he could “annihilate” the Iranian government.

Analysts with the bank also predicted that oil inventories in OECD countries would hit “operational minimums” in May, at which point “price increases become exponential rather than linear.” While oil inventories have been depleted globally, they have held up better than many expected, including JPMorgan.

What has happened is that demand destruction more than inventory draws has helped absorb the supply disruption and avoid higher crude prices, JPMorgan analysts admitted.

The International Energy Agency now expects world oil demand to decline by a sizable 2.5 million barrels per day in 2026, a drop that is 940,000 barrels per day greater than the estimate in the August report. The extent of the lost demand also speaks to a weaker underlying economy as consumers and businesses shy away from paying up to maintain previous consumption levels.

This is the JPM oil report everyone's talking about. pic.twitter.com/JBdM28FkjZ

— HFI Research (@HFI_Research) September 18, 2026

Meanwhile, the effect has not been evenly distributed. According to petroleum geologist Art Berman, the crisis hits vulnerable import-dependent developing countries first, where high oil prices together with currency weakness – in some cases a vicious feedback loop – make the burden substantially more difficult to bear.

“The first participants forced out of the market are not wealthy American consumers,” he wrote. “They are fertilizer buyers in Africa, trucking firms in Pakistan, factories in Bangladesh, and households across import-dependent economies.” 

In early 2008, crude oil staged a parabolic run from about $90 a barrel in January to an all-time record high of $147 in July. The extreme price movement triggered rapid demand destruction that damaged consumer spending and is seen by many analysts as one of the underappreciated causes of the ensuing crisis that would rock the global economy.

Europe’s energy crisis in 2022 driven by its rejection of cheap Russian gas ended up in consumption dropping 20% from pre-2022 levels as of late 2025. Even when prices eventually came down from record highs, the damage had been done: factories had shuttered and some businesses relocated energy-intense processes overseas.

Oil prices dropped toward the end of this week amid hopes for a recovery of flows through Saudi Arabia’s critical East-West pipeline, which was damaged in a drone attack. Nevertheless, Brent held above $100 per barrel, trading at around $103 mid-afternoon London time on Friday.

The US Federal Reserve has raised interest rates despite US President Donald Trump’s repeated demands for lower borrowing costs, as stubborn inflation continues to weigh on the world’s largest economy.

The Fed hiked its benchmark rate by 25 basis points to 3.75%-4% on Wednesday in a unanimous vote, marking the first increase since 2023 and the first policy change under Chairman Kevin Warsh.

Speaking after the decision, Warsh said inflation was “too high and has been for too long,” while pointing to the resilience of the US economy despite “geopolitical shocks and uncertainty.”

The move had been widely expected. Some 85% of economists surveyed by Reuters after the latest inflation data had forecast a quarter-point increase, while a narrow majority expected at least one more hike by the end of March 2027.

The decision comes after inflation showed renewed signs of pressure. US consumer prices rose 3.4% year-on-year in August and 0.4% from the previous month, with gasoline prices jumping 3.9%, according to the US Bureau of Labor Statistics.

Price pressures have been fueled in part by higher energy costs linked to the Iran war, while tariffs have also added to inflation concerns. Higher interest rates are intended to slow price growth by making borrowing more expensive, which tends to reduce spending by consumers and businesses.

The Fed has a long-term inflation target of 2%. Warsh said last month that the goal was “firm” and “fixed,” arguing that inflation remained too high and that the central banking system’s main focus should be on prices.

The labor market has remained relatively stable, with unemployment at 4.1% in August and employers adding 162,000 jobs. Growth has slowed, however, with GDP expanding at an annualized rate of 1.5% in the second quarter, down from 2.1% in the first.

Trump repeatedly attacked former Fed Chair Jerome Powell for refusing to deliver the steep rate cuts he sought, calling him a “moron” and a “numbskull.” He nominated Warsh as Powell’s successor in March, with Warsh taking over the Fed in May. The latest decision now puts him at odds with the president.

Lower rates would also cut borrowing costs on the US national debt, which has topped $40 trillion. On Sunday, Trump renewed his pressure on the Fed, saying the US should have “the lowest interest rate in the world” regardless of inflation or other economic data.

Warsh had previously backed higher rates to curb inflation, but shifted toward Trump’s position on lower borrowing costs before taking over the Fed and called for “regime change” at the central bank. Last month, however, he stressed that the Fed must be confident inflation is moving toward its 2% target “clearly and at sufficient speed,” warning that otherwise, “we have work to do.”

The 10-year US Treasury yield has surged above 5% to its highest level in nearly two decades, extending a global bond sell-off driven by soaring energy prices, mounting government debt, and inflation fears.

The latest jump followed a surge in oil prices above $100 per barrel as the US war on Iran continues to threaten global energy supplies.

The rise, which took the 10-year Treasury yield to 5.04% on Tuesday – the highest since 2007 – threatens to drive borrowing costs higher in the US and beyond. Treasury yields serve as a benchmark for mortgages, corporate debt, and lending across global markets.

The sell-off has put additional pressure on the US Federal Reserve ahead of its interest-rate decision on Wednesday, with investors expecting the first hike since July 2023. Keeping rates unchanged or signaling a slower pace of tightening could drive bond yields even higher as investors seek protection against inflation, according to Bloomberg.

“It would be very difficult for the Fed to leave rates unchanged this week without eroding its inflation-fighting credibility,” BMO Capital Markets strategist Vail Hartman told the outlet.

The renewed bond rout has gathered pace as the Middle East conflict drives energy costs higher. Brent crude has broken above $100 per barrel for the first time in nearly two months, raising concerns that more expensive fuel and transport could feed through to consumer prices and keep inflation elevated.

Washington’s borrowing needs are adding to the pressure. Persistent budget deficits require the Treasury to sell large volumes of new debt, increasing the supply of bonds that investors must absorb. As bond prices fall, yields rise to attract buyers, making future government borrowing more expensive.

US Treasuries are widely treated as one of the world’s safest and most liquid assets and underpin borrowing costs throughout the global financial system. A sustained sell-off could therefore tighten financial conditions far beyond the US, putting pressure on other bond markets, currencies and heavily indebted economies.

Demand from some of the traditional buyers of US debt is also weakening. “Structural demand for US Treasuries, particularly among foreign official investors, is materially weaker,” Phoebe White, chief US rates strategist at UBS told Bloomberg, adding that the scope for long-term yields to fall remains limited.

Norway’s $2.3 trillion sovereign wealth fund, the world’s largest, recently proposed cutting its US Treasury holdings by almost $80 billion. While small relative to the overall Treasury market, the move signals a further shift at the margins away from US debt as rising deficits force Washington to borrow more and foreign buyers show less appetite for Treasuries.

Germany has spent some €50 billion ($58 billion) cushioning the impact of soaring energy prices after cutting Russian gas imports in 2022, Die Süddeutsche Zeitung and Bild have reported.

Following the escalation of the Ukraine conflict, Germany drastically reduced imports of Russian natural gas, which had previously covered 55% of its consumption. The shift has driven up energy costs and contributed to a prolonged economic slump, hitting both households and industry and undermining German competitiveness.

Die Süddeutsche Zeitung reported on Thursday that the Finance Ministry provided the €50 billion estimate in response to an inquiry by Green Party MP Robin Wagener. The figure covers relief and stabilization measures including electricity and gas price caps, a one-off payment to pensioners, and rescue packages for gas companies.

Bild cited several experts as saying the overall economic toll of the energy crisis, including the construction of new LNG terminals, is likely “significantly higher.” 

The opposition Alternative for Germany (AfD) has repeatedly criticized Berlin’s decision to decouple from Russian energy. Party co-chair Alice Weidel said in June that “cheap energy from Russia was the secret of the success of ‘Made in Germany.’” 

Rising energy costs may also have contributed to the AfD’s growing popularity, according to a study published in late July. Titled ‘The Political Consequences of Energy Price Shocks,’ the paper found that “large and sudden increases in household energy costs coincided with heightened political dissatisfaction and electoral gains for populist parties, particularly the far right populist Alternative fur Deutschland (AfD).” 

According to the analysis, Germans who experienced above-median price increases were 7.5 percentage points more likely to support the AfD.

The trend has been particularly pronounced in former East Germany, where “energy prices increased most strongly,” the researchers said, pointing to the AfD’s electoral gains in Thuringia, Brandenburg, and Saxony in 2023 and 2024.

On Sunday, the AfD won the regional election in Saxony-Anhalt with 43.8% of the vote, while Chancellor Friedrich Merz’s Christian Democratic Union (CDU) finished second with just 17.2%.

Multiple recent polls have indicated that the AfD is the most popular party nationally, with support at around 28%.

Saudi Arabia’s crude oil production plunged by nearly 2 million barrels per day in August to its lowest level in over 35 years, as conflicts across the Middle East squeezed the kingdom’s export routes, Bloomberg reported on Thursday.

Riyadh told OPEC that production fell by 1.9 million barrels per day last month to 6.238 million bpd, according to the group’s monthly report obtained by the outlet.

The figure marks a new low since the US and Israel launched strikes against Iran in late February, as well as the kingdom’s lowest production level since the beginning of the Gulf War in 1990.

Iranian-aligned Houthi forces in Yemen have also renewed the war against Saudi-backed government forces and declared a maritime blockade against the kingdom.

The Houthis have also directly targeted Saudi energy infrastructure. A missile and drone barrage on Tuesday set oil installations ablaze and forced operations at some facilities to stop, according to the Saudi authorities, although Riyadh has provided few details on the extent of the damage or its impact on production.

The pressure is already visible in shipping data, as provisional tanker tracking compiled by Bloomberg shows Saudi crude exports falling by around a third in August.

Riyadh told OPEC that its “supply to market,” which includes crude drawn from storage, stood at 7.122 million bpd, suggesting that the kingdom tapped inventories to compensate for reduced production. OPEC’s separate estimate based on external secondary sources was substantially higher, putting Saudi output at 7.276 million bpd in August.

The upheaval is already reshaping global energy flows. Russia launched the first shipment from its massive Vostok Oil project in the Arctic this week, opening a new export route via the Northern Sea Route which Rosneft says could eventually supply the equivalent of around 730 million barrels of oil annually.

Those additional supplies could eventually ease pressure on global markets. The immediate shock, however, is already reaching US consumers. The national average diesel price surpassed $6 a gallon for the first time on record on Thursday, according to GasBuddy, after rising nearly 60% since the US and Israel launched the war against Iran in late February.

Rogue AI agents developed by OpenAI bypassed restrictions on posting online and used more than ten previously undisclosed websites to communicate with one another, Reuters reported on Wednesday, adding that the company kept the unauthorized activity quiet for months.

An AI agent is a software system that can independently carry out tasks on a user’s behalf, making decisions and taking actions with limited human supervision. The findings raise concerns that increasingly autonomous AI systems can find ways around safeguards and take actions their developers did not authorize or anticipate.

Reuters reviewed findings from six independent investigators or research groups, which suggested that the activity was far more widespread than previously known. Researcher Andrew Yoon identified 18 previously undisclosed sites used from May to July, while a team led by Sydney Von Arx found evidence across 23.

”We have no idea how much is out there,” Von Arx said, warning that the estimates are incomplete.

The agents reportedly repurposed old wikis, online text-storage services, and university link shorteners as makeshift message boards while carrying out research tasks. Although permitted to search the web for information, they were not supposed to post content, but found ways to leave messages for one another using editable pages and other website features.

The findings expand on an incident revealed last week involving DseWiki, a German programming wiki where researchers attributed more than 15,000 edits to OpenAI agents. The systems reportedly used the site to exchange tactics for completing tasks, circumventing restrictions, and avoiding detection.

Researchers said some discussed using Tor, which allows users to browse the internet anonymously, and created backup pages after a moderator began deleting their messages.

OpenAI later acknowledged that its agents exploited vulnerabilities and accessed parts of Hugging Face’s infrastructure without authorization, describing the episode as a “warning shot” about the risks posed by increasingly capable autonomous systems.

The company told Reuters that it found no additional activity matching the “severity or scale” of the Hugging Face breach. OpenAI said it was reviewing broader agent activity and developing a framework for reporting AI “misalignment” during model training, evaluation, and deployment.

Global oil prices have surpassed $100 per barrel as escalating fighting between the US and Iran, and Houthi attacks on Saudi energy infrastructure, raised fears of further supply disruptions. Brent crude broke the threshold for the first time in nearly two months.

Brent futures climbed 2.2% to $100.07 per barrel in Asian trading, their highest level since July 24. US benchmark West Texas Intermediate (WTI) rose 1.83% to $94.73, while Brent has gained around 25% since early August as hopes of a lasting settlement to the US-Iran conflict have faded.

“Recent developments only reinforce the view that we’re still some way from a restart in talks. In the meantime, the market is likely to continue to price in a sizeable risk premium,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note early Wednesday.

The attacks came after Iran’s Islamic Revolutionary Guard Corps (IRGC) issued an “urgent warning” to tanker crews near Bahrain and Kuwait to abandon their ships, saying vessels in the area would be targeted. Ballistic missiles were subsequently launched from Iran toward US military facilities across the region, including those in Jordan, where air defenses intercepted 18 of 20 incoming missiles, according to the military.

Supply concerns have also intensified after Yemen’s Houthis launched missile and drone attacks on energy facilities in southern Saudi Arabia on Tuesday. The strikes reportedly forced temporary shutdowns and sparked a fire at the Jazan refinery, a major Saudi Aramco facility capable of processing 400,000 barrels of crude oil per day.

Hunter Biden is launching a memecoin called $LAPTOP, named after the infamous notebook that became the center of a political scandal during the 2020 US presidential campaign, his X post has indicated. The post features a video montage of media reports referencing the laptop and promotes a September 9 launch.

The device contained emails and financial records tied to the former US president’s son’s overseas business dealings, alongside explicit images and videos documenting his drug and alcohol use.

The token will launch on Coinbase’s Base network with a total supply of one billion coins, The Wall Street Journal reported on Monday. Biden and his fellow founders will control 30% of the supply, while another 20% has been earmarked for airdrops – free token distributions used by crypto projects to promote new coins.

Memecoins are highly speculative assets and can lose value rapidly. The $LAPTOP project itself says the token has no utility or ownership rights and warns that digital-asset prices “can fall to zero.”

A further 30% of the total supply is tied to 30 political, crypto, and cultural predictions. Tokens will be burned if specified outcomes occur – including a Democrat winning the 2028 presidential election, Bitcoin reaching another record high or $LAPTOP overtaking $TRUMP in value – while tokens tied to outcomes that do not materialize will go to charity.

$LAPTOP

September 9 pic.twitter.com/QokgWLNxgL

— Hunter Biden (@HunterBiden) September 7, 2026

The offer to $TRUMP investors comes after Trump and his wife Melania launched their own memecoins shortly before his return to the White House in January 2025. Trump reported about $635 million in income from $TRUMP in 2025, while most investors lost money – nearly one million wallets were down a combined $3.8 billion by the end of June, according to crypto analytics firm Nansen.

Biden’s laptop became the center of a political scandal just weeks before the 2020 US presidential election, after the New York Post published emails purportedly taken from the device. The newspaper and Trump’s Republican allies alleged that Joe Biden had used his position as vice president to help his son’s business interests in Ukraine, where Hunter served on the board of energy company Burisma. Joe Biden denied involvement in his son’s business dealings.

The laptop also contained explicit images and videos documenting Biden’s drug and alcohol use, some of which later featured in his federal gun trial. He was convicted on three felony gun charges in 2024 and pleaded guilty to separate tax offenses before his father granted him a sweeping federal pardon shortly before leaving office.

A storm is gathering in bond markets across the globe as yields on government debt are in many cases near multi-decade highs. 

High and rising government debt levels pose a problem for bond markets for which no solution seems imminent. The rising deficits, meanwhile, are colliding with diminished demand for government debt.

On top of this, renewed fighting in the Middle East earlier this week pushed oil prices higher and elicited concerns of what one Wall Street analyst called an “inflation monster.” 

RT takes a look at the rumbling in global bond markets and what to look for in the coming days and weeks.

What happened and what caused it

After fighting between the US and Iran restarted earlier this week, oil jumped more than $4 a barrel on Tuesday, settling at a five-week high of $94.65 per barrel Brent. Prices retreated somewhat later in the week, but oil is still set for a roughly 9% gain on the week. US diesel futures, meanwhile, surged to a 52-month high earlier in the week.

More broadly, the volatility comes as major economies have flooded the market with debt, demand for which has been tepid. In particular, the pool of price-insensitive institutional buyers is shrinking in what is a larger structural shift. All things being equal, investors want higher yields to absorb the quantity and also to protect themselves against rising inflationary risks.

Perhaps most concerning are what seem to be permanently expanding budget deficits in numerous countries, particularly given the apparent lack of political will to stem the profligacy. The US recently passed the $40 trillion debt mark with no sign of slowing down. Debt as a share of economic output is at or above 100% across the G7, except Germany, which seems determined to catch up.

Heavy borrowing by AI companies – which are in many cases unable to fund growth out of cash flow – is also contributing to the rising rates. According to a blog post by the European Central Bank, US tech giants are flooding European bond markets to fund AI investment, potentially reaching $1 trillion by 2028, thus crowding out other borrowers – including governments.

Meanwhile, higher energy prices are having a direct feed-through to inflation. Consumer prices in the Eurozone climbed 3.3% in August year-on-year, the fastest pace of inflation in nearly three years. The recent move higher in oil prices will only make this worse. 

What it all adds up to is that yields on government bonds across major economies are in many cases trading at levels not seen in years or even decades.

• The UK’s 30-year bond yield hit its highest level since 1998.

• Japan’s 10-year yield has broken through the 3% mark for the first time in three decades.

• Yields in Germany and France are also trading at their highest levels in a decade.

• The yield on the US 10-year, the single most important interest rate in the world, is at a level last seen in 2023.

“It’s becoming harder and harder to disentangle” all the factors behind the moves in bond markets, said Ed Al-Hussainy, a portfolio manager at Columbia Threadneedle. “The only thing we can say right now is that they’re all pointing in the same direction, and that’s in the direction of higher rates, and they’re doing it globally.”

War and the bond market

US yields are currently sitting at or near multi-decade highs across much of the curve and have edged higher since hostilities with Iran resumed. With the war now in its seventh month, many analysts are wondering whether the bond market might end up being the major constraint on US military ambitions.

It wouldn’t be the first time Treasures put a damper on moves by the administration of US President Donald Trump.

A few months into his new term, Trump introduced his Liberation Day tariffs, thus opening a trade war against the whole world from the White House lawn. It would take exactly three trading days for the 10-year yield to chalk up a gain of around 50 basis points, putting it on pace for its biggest weekly rise in a quarter century. The administration beat a humiliating retreat by canceling or postponing most of the tariffs.

Meanwhile, the worsening inflation climate is not lost on the Fed. New Fed Chairman Kevin Warsh delivered a hawkish message at last week’s Jackson Hole Symposium – an implicit acknowledgement of the war-related risks. The market is now pricing in a 70% chance of a rate hike at the Fed’s next meeting in September.

A hike would push Treasury yields higher, but mostly at the short end. This is essentially what the market gave Warsh after Jackson Hole: the 2-year jumped while the long end was much calmer, producing what is called a bear flattening, when short-term yields rise faster than long-term yields. This can be interpreted as a vote of confidence that the Fed is going to deal with inflation.

But if the war in Iran is raging and inflation is surging, a Fed hike might not convince the market. If the Fed hikes and long-term rates rise anyway, it would be a very ominous signal that the central bank might be losing control of the bond market.

France – the new sick man of Europe

France has emerged as the Eurozone’s biggest sovereign debt risk, which means that a problem once confined to the southern periphery of the union has moved to one of the two political pillars of the entire European project.

France’s finances are a mess. The country’s public budget deficit stood at 5.1% of GDP in 2025, while its debt-to-GDP ratios hit 115%. Both figures are well above EU limits and both are highly unusual for a country that is neither at war nor in a deep recession.

France has accumulated more than €3.5 trillion in public debt, which is becoming more expensive to finance as the yields on its bonds have risen dramatically over the past year. As a result, the French 10-year is trading above its Greek and Italian counterparts, a state of affairs that few previously would have imagined.

Meanwhile, Paris has committed to billions in increased defense spending in the coming years. A major update to the country’s defense budget authorizing an additional €36 billion for 2026–2030 was signed off on by lawmakers in June.

France, with its political deadlock and fiscal profligacy, may have emerged as the most acute source of potential stress in the EU, but the trend of higher yields is visible across the bloc. German Bunds, the benchmark for the bloc, have also moved sharply higher, hitting 15-year highs. 

The surge in European yields is potentially bad news for the US. Japan recently off-loaded some US Treasuries to defend its beleaguered currency. The move elicited a rare joint US-Japanese intervention, ostensibly aimed at stabilizing the currency but almost certainly with the deeper goal of preventing a weak yen from forcing Japan to unload Treasuries to defend it.

Given that Europe is a large holder of Treasuries, there are two ways this can become a problem for Washington. First, higher yields across the bloc make European bonds relatively more attractive, thus potentially steering yield-hungry investors toward Europe. Second, if European financial conditions deteriorate badly enough, banks and other institutions may need to raise cash. Selling Treasuries would be a natural source of funding. Either way, US yields would rise.

What to watch for in the coming days and weeks

Any prolonged resumption in hostilities in the Middle East could easily push oil prices back over $100. With bond markets already strained, selling could pick up further. Any disorderly selling would be a signal in itself. But short of that, inflation is the key transmission mechanism to watch. A new wave of price growth would push investors to demand more compensation for holding long-dated liabilities and would likely force the hand of central banks, who may still be reluctant to tighten. 

Meanwhile, with politicians reluctant to impose fiscal discipline, the bond market might have to do it for them. If yields continue to rise, governments will eventually have to choose between higher taxes, lower spending, and still greater borrowing costs. Policy-wise, what invariably prevails are options to kick the can further down the road, but any substantial change in rhetoric toward fiscal responsibility would suggest that the bond market’s message is beginning to be heard.

Norway’s $2.3 trillion sovereign wealth fund could sharply reduce its holdings of US Treasuries under a proposed overhaul aimed at boosting returns through other types of debt, the institution has announced. The shift could cut its Treasury allocation by almost $80 billion, according to Financial Times estimates.

Norges Bank Investment Management (NBIM), which manages the world’s largest sovereign wealth fund, recommended in a letter to Norway’s Finance Ministry on Tuesday that government debt be cut from 70% to 50% in its fixed-income portfolio. The change would reduce its global government bond allocation by about $106 billion, with most of the reduction falling on US Treasuries, the FT calculated.

NBIM said a 50% government bond allocation would still be enough “to cover the liquidity needs” during periods of market turbulence, while the remainder would provide exposure to “more sources of risk premiums.”

Under the plan, US Treasuries would fall from 34.1% to 21.9% of the fund’s bond benchmark. Much of the money would rotate into higher-yielding non-government US debt, including mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae.

The allocation away from government debt comes at a time when government bonds have been selling off across leading economies, pushing yields in many cases to multi-year highs.

The proposed cut, although not significant relative to the size of the US Treasury market, signals a further shift at the margins away from US debt. This comes as rising deficits are forcing the US to issue more debt while foreign buyers have shown less appetite for Treasuries.

Economist Mohamed El-Erian told CNBC on Friday that Norway’s move matters less for its size than for the signal it sends. “The size isn’t big, but the signal that traditional holders and buyers are becoming less reliable is a very important one.”

Last month, meanwhile, Treasury Secretary Scott Bessent announced that the Treasury would at least double its buyback operations of long-dated USTs. Although framed as a mere liquidity operation, the move was widely interpreted as an attempt to bring long-dated yields down. It came shortly after the 30-year yield reached its highest level since 2007.

The Norwegian proposal is not yet final. NBIM described it as “advice” that will feed into broader recommendations to the Finance Ministry, with the government expected to submit its final proposals to parliament in spring of 2027.

German car giant Volkswagen is set to shed around 100,000 jobs worldwide after management and unions agreed to cut a further 50,000 positions by the end of the decade, the company has said. The reductions would amount to roughly one in seven of its global workforce.

Volkswagen, like much of German industry, is facing a severe financial and operational crisis, having watched profit margins collapse. CEO Oliver Blume has cited the loss of Russian energy as a key factor, along with increased competition from China.

The scale of the restructuring marks a dramatic retreat for a company long regarded as a symbol of German industrial strength. Volkswagen already had around 50,000 job cuts underway at its namesake brand, Audi, Porsche, and software subsidiary CARIAD, mostly through voluntary departures and early retirement. The latest plan effectively doubles that figure.

If carried out in full, the loss of around 100,000 positions would be the largest workforce reduction ever undertaken by a global automaker. Volkswagen employs roughly 650,000 people worldwide.

The company is also shrinking its ambitions elsewhere. Its model range is set to be cut by as much as half, while investment and research spending for 2027-2031 has been capped at €135 billion ($157 billion). Volkswagen is restructuring around annual sales of roughly 9 million vehicles and is targeting a 9% operating margin by 2030.

Hit by US tariffs and patchy demand for electric cars, Europe’s largest carmaker is struggling on several fronts. The crisis has been compounded at home by soaring energy costs since Berlin abandoned cheap Russian pipeline gas following the escalation of the Ukraine conflict in 2022, increasingly relying on costlier LNG imports, including supplies from the US.

Russian presidential investment envoy Kirill Dmitriev has linked Germany’s industrial decline directly to its break with Russian energy. “No Russian gas – no German industry,” he wrote on Friday, commenting on plans by steel giant ArcelorMittal to shut major operations in Duisburg, affecting around 550 of the site’s 800 workers.

The energy shock has eroded a competitive advantage that underpinned German manufacturing for decades. The country subsequently suffered two consecutive years of economic contraction followed by sluggish growth, with manufacturers cutting production, investment, and jobs.

At the same time, Volkswagen has been losing ground in China, once its most important market, to domestic rivals such as BYD and Geely. Chinese automakers have also expanded rapidly in Europe, putting additional pressure on Volkswagen as it struggles to make its electric vehicles competitive on price and cost.

Volkswagen has steadily scaled back production at home. Last December, it ended vehicle production at its Dresden plant – the first time in the company’s nine-decade history that it had stopped carmaking at a German factory. BASF, Bosch, Continental, and other major German manufacturers have also closed or downsized facilities in recent years.

Ukrainian attacks on Russian energy infrastructure have fueled a global “energy shock” and pushed prices higher, US Treasury Secretary Scott Bessent claimed. The disruption has compounded strains caused by the Iran war, he added.

Ukraine has ramped up long-range drone strikes against Russia’s energy sector this year, targeting oil refineries, storage facilities, and export infrastructure deep inside the country. Kiev says the campaign is aimed at weakening Russia’s ability to finance and maintain its military operations.

Speaking to Fox on Wednesday, Bessent said the world is experiencing an energy shock partly because of the Ukrainian strikes.

”Ukraine has decided that they want to blow up Russian energy assets and refined products,” which is “creating upward price pressure on a global basis,” he said.

Bessent:

We are going through an energy shock right now.

Ukraine has decided that they want to blow up Russian energy assets.

That is creating price pressure on a global basis. pic.twitter.com/oXGhLQY2FN

— Clash Report (@clashreport) September 2, 2026

The strikes have significantly disrupted Russian refining, according to energy analytics firm Kpler. It said last week that refinery runs fell to around 3.8 million barrels per day in July, their lowest level in more than two decades. Refined-product exports dropped to around 1.2 million barrels per day, down from 2.3 million a year earlier.

The Iran war has also strained global energy markets, according to Bessent. Before the US and Israel attacked Iran in February, around a fifth of global energy supplies passed through the Strait of Hormuz. Tehran’s subsequent restrictions on commercial shipping, coupled with the US naval blockade, have disrupted flows and pushed prices higher.

Washington has stepped up economic pressure on Tehran. Bessent warned on Sunday that the US could unleash “financial violence” against Iran, threatening new secondary sanctions every week against Tehran and those doing business with it.

The extreme drought of the summer of 2026 revealed the hidden secrets of Central and Eastern European waterways, turning local legends into reality. A critical drop in water levels uncovered deposits of old tires at the bottom of Hungary’s Lake Gumis-to, the remains of a mammoth were discovered in the record-low Danube, and the ominous silhouettes of ancient boulders emerged from the water in the dry bed of Germany’s Elbe.

These “hunger stones” (Hungersteine) are hydrological markers from past centuries, on which ancestors carved the dates of catastrophic droughts. The most famous inscription reads: “If you see me, cry.” But while these monuments once foreshadowed crop failure, in the 21st century they foretell a technological crisis for the EU. The paradox is that the shallowing of the rivers has become a death sentence not so much for the climate as for Brussels’ idealized environmental policy. 

The Green Deal touted by Brussels has deprived heavy industry of its basic foundation, leaving it hostage to the vagaries of the weather. This crisis has hit Central and Eastern Europe the hardest, as they are the most dependent on conventional energy resources.

The EU’s factory floor

Concerns about the region’s fate are based on its unique economic structure: Central and Eastern Europe is today the EU’s main manufacturing hub, with an abnormally high concentration of energy-intensive sectors. While Western Europe has shifted its focus to services, in the Czech Republic, Slovakia, Poland, Hungary, and Romania, the share of manufacturing in GDP remains stable at 20-25%, almost double that of the United States or France. It is here that the “Detroit of Europe” is located: a colossal automotive cluster – including Volkswagen, Skoda, Stellantis, Kia and BMW – requiring continuous volumes of metal smelting and stamping. Moreover, the region is overloaded with primary links in chemical and metallurgical chains, from US Steel in Kosice, Slovakia and ArcelorMittal plants in Poland to two of the largest chemical plants, Duslo and Grupa Azoty, which supply raw materials to European industry. The closure of these plants would automatically disrupt the entire EU value chain.

Despite both ancient and modern portends of climate disaster, attempts to decarbonize the region are failing: the sunny plains of Hungary, the shallow rivers of the Czech Republic and Slovakia, and the Baltic wind farms of Poland are physically incapable of creating a unified, stable energy system allowing for the uninterrupted operation of heavy industry. Eurostat statistics clearly show that, despite reports of the share of renewable energy averaging 46% in Europe, it is the Central and Eastern European countries that are officially among the continent’s worst performers in terms of the energy transition. 

In the Czech Republic, the share of renewable energy in electricity generation has stalled at a critical 19.2%, while Slovakia and Hungary share the bottom spots, with a modest 24.1%. Poland (26-27%) performs slightly better; however, despite its local solar boom, it remains Europe’s “coal island.” Only Romania stands out against the general backdrop (45-48%), relying on the Soviet legacy of large hydroelectric power plants as well as the coastal wind farms on the Black Sea. However, in the context of total final energy consumption – including heating for factories and transport – the actual share of renewable energy in all five countries falls to a critical 14-24%.

Even these modest figures are subject to enormous risks, as happened this past summer. Poland experienced a solar energy boom (up to 30 GW) and launched its first offshore wind farm, Baltic Power. This tandem of sun and wind turned out to be powerless amid the calm summer of 2026. Neighboring Czech Republic – the “forge of Europe,” with Skoda auto factories, has placed its bets on biomass and hydropower on the Vltava and Elbe rivers, which have seen a critical drop in output due to extreme drought.

What keeps the machines running

If we remove capricious renewable energy sources from the equation, the real energy framework that keeps the region from witnessing an industrial collapse becomes clear. It rests on three traditional pillars. First, there’s nuclear power, which we’ll discuss below. Second, there are coal-fired power plants, which Brussels insists must be immediately phased out, but which still provide up to 65% of Poland’s electricity and 40% of the Czech Republic’s. Finally, there’s natural gas. It’s essential not only for quickly balancing the grid when wind turbines fail, but also as a basic chemical feedstock, without which the Slovak Duslo plant or the Polish concern Grupa Azot physically cannot produce plastics and nitrogen fertilizers.

Gas consumption in the EU is currently tied to a series of cynical compromises. The logic of a total rejection of Eastern gas becomes an outright farce if one looks at the latest reports from the think tank CREA: as of July 2026, Hungary was the largest buyer in the EU, spending €486 million (around $565 million) on Russian fossil fuels, the lion’s share (62%) of which was natural gas. Budapest is certainly playing the diversification card, having acquired significant capacity at the Croatian LNG terminal on the island of Krk to back up its auto plants.

However, amid the escalation in the Strait of Hormuz, which in July reduced global liquefied natural gas transit by almost a fifth, LNG logistics have become critically expensive. As a result, the main physical source for energy-intensive enterprises in the region remains gas, which is steadily supplied through the southern corridor of Balkan Stream. This resource is then distributed among neighboring countries – primarily Slovakia and Bulgaria. This allows for speculation about “green independence,” but in reality, the countries’ heavy industries continue to physically operate using eastern fuel.

It is important to understand that Brussels’ declared European Green Deal, initially billed as a global climate mission, has, in practice, transformed into an instrument of strict supranational regulation and financial pressure. Through environmental directives, emissions quotas (ETS), and a cross-border carbon tax (CBAM), the European Commission has built a system of direct control over the economies of member states. For Central and Eastern European countries, this “green transition” has become a language of ultimatums: access to strategic European funds for development and recovery (RRF) has become directly linked to the pace of forced decarbonization, which is destroying their local industrial base.

The climate framework imposed by Brussels is viewed with inevitable cynicism in Central and Eastern Europe. Commitments to close coal mines or switch to renewable energy sources have been used by local elites as bargaining chips in exchange for generous subsidies from cohesion funds. A current example is the tender in Hungary for the development and construction of 1,000 MW wind turbines, which are expected to generate up to 4,000 MW of additional energy by 2030. Hungary will not see any more wind power after the tender is announced – only the north of the country has enough wind to generate the necessary amount, and raising the turbines to a higher altitude won’t help. But since the European Commission has linked the issuance of grants to the development of wind energy, by announcing the tender, Budapest is fulfilling an EU bureaucratic requirement, receiving €1.5 billion to modernize its power grids.

Back to the atom

Against the backdrop of worsening energy problems in the region, hopes are increasingly being pinned on nuclear power plants. Central and Eastern European countries are maintaining a high pace in this area. For example, after it receives the license to launch Unit 4 of the Mochovce Nuclear Power Plant, Slovakia will officially surpass France and become the absolute world leader in the use of nuclear power, which will account for a phenomenal 77.5% of all electricity consumed in the country. In Hungary, the Paks Nuclear Power Plant also supplies up to 50% of all electricity, while in the Czech Republic, the Temelin and Dukovany plants account for approximately 40%. The exceptional interest in this topic is also evidenced by the fact that Poland, historically without its own nuclear power generation, is currently actively implementing several nuclear power projects at both the public and private levels.

In this context, several key issues can be identified, the development of which will shape the nuclear agenda of the region and, most likely, the entire EU. First, there’s the climate factor. Changing weather conditions and extreme droughts impose severe restrictions on the stable operation of nuclear power plants, which require enormous volumes of water to cool the reactors. Second, there’s the fragmented nature of the region’s nuclear geopolitics. A third important issue concerns the securitization of cooperation. The current crisis surrounding the construction of the Paks II nuclear power plant clearly illustrates the shift of nuclear energy to the realm of national security. Finally, there’s the technological dilemma. The main financial and engineering challenge remains the choice between the long-term construction of traditional nuclear power plants and the transition to flexible, but not yet commercially proven, small modular reactors (SMRs).

Against this backdrop, the crisis surrounding the Paks I Nuclear Power Plant (NPP) and the Paks II Nuclear Power Plant (NPP) under construction has become a key indicator of climate risks. Amidst the extreme heat and record drought of the outgoing summer, power generation at the operating plant plummeted by more than 75% at the peak of the crisis in early August. Critically low water levels in the Danube meant that the NPP’s intake systems were physically unable to capture water for cooling. To prevent the collapse of the national grid, Hungarian engineers and military units, with the support of private companies, urgently constructed a submersible sill made of 200,000 tons of rock and crushed stone on the riverbed. This measure artificially raised the water level in the intake area. As a result of these extensive efforts, by August 26, 2026 the Paks NPP fully restored its design capacity of 2,000 MW, returning all four reactors and eight turbines to operation. This precedent has jeopardized the Paks II NPP project initiated by the previous Hungarian administration, which has already been criticized by Prime Minister Peter Magyar. The new leaders are basing their argument on the fact that constructing two more giant VVER-1200 units amid the growing instability of the Danube looks like technological adventurism – especially given how problems with the old 2,000 MW plant nearly paralyzed the country’s power grid.

Magyar’s criticism of Paks II focuses specifically on the original design’s lack of evaporative cooling towers and the retention of a once-through cooling circuit from the river. Opponents of the contract claim that the heat discharge from the new units during periods of drought will lead to the ecological collapse of the Danube. Experts note that Magyar’s initiative to revise the cooling system has pragmatic goals: negotiations will not only help resolve the issue of water level dependence but will also give Budapest a legal opportunity to attract local Hungarian companies in the development of this multi-billion-dollar facility, significantly increasing the national stake in the project.

Thus, there is every reason to believe that the Paks II problem lies not so much in the climate as in the geopolitical realm, where a course has been set for the complete isolation of Russian high-tech companies. Against this backdrop, Brussels is beginning to lobby for an alternative – small modular reactor (SMR) projects, including those which use liquid metal coolant. From a financial and reputational standpoint, a long-term shift toward SMRs could be a major tactical success for Magyar’s team. Replacing the gigantic megaproject, costing over €12 billion, with flexible modular units will reduce initial capital expenditures by billions of euros, affirming the new prime minister’s legitimacy as a cost-effective manager and earning Brussels’ loyalty.

The only loser in this scenario will be large energy-intensive businesses: the per-megawatt cost of energy from SMRs will be 20-30% higher than that of a classic giant nuclear power plant. However, this seems to be of little concern – European Commission President Ursula von der Leyen herself has issued a frank and official warning to the auto industry and metallurgists in Central and Eastern Europe that, given the current global political situation, the time for cheap resources and a happy ending for business is gone forever, but that they must “hold on.”

European Commission President Ursula von der Leyen has acknowledged that the loss of cheap energy imports has dealt a blow to the EU economy and that the bloc now faces prices far above those of its main competitors.

The EU drastically reduced Russian oil and gas imports following the escalation of the Ukraine conflict in 2022, while Brussels has committed to completely phasing out Russian fossil fuels by 2027. Energy costs have since surged across much of the bloc, with the US-Israeli war on Iran adding further pressure.

Speaking at the La Rencontre des Entrepreneurs de France (REF) business conference in Paris on Thursday, von der Leyen said that “for a long time, the European economic model relied on” several key factors, including inexpensive energy imports. However, the pillars that once underpinned the bloc’s prosperity have now “disappeared,” she added.

Without addressing the reasons behind the rise in energy costs, von der Leyen noted that “European prices remain two to three times higher than in the United States and China.”

German Chancellor Friedrich Merz acknowledged last month that Berlin’s self-imposed embargo on Russian energy was the main cause of the “ongoing energy crisis” that has eroded the competitiveness of German industry. Before 2022, Russia supplied approximately 55% of Germany’s natural gas imports.

The Financial Times reported in June, citing projections by consultancy Wood Mackenzie, that the EU could enter the coming heating season with its lowest gas reserves in 15 years.

Some member states have since balked at further restrictions on Russian LNG as Brussels pushes to end long-term imports beginning next year. Against this backdrop, the bloc has recently stepped up purchases of Russian LNG, Bloomberg reported earlier this month.

Despite the resistance and renewed purchases, the European Commission has maintained that it will proceed with the total phase-out of Russian energy imports, even in the event of physical shortages or the threat of power cuts.

Moscow has repeatedly described EU sanctions, particularly those targeting its energy sector, as self-defeating measures that undermine the bloc’s competitiveness. Russia, meanwhile, has redirected much of its energy exports elsewhere, primarily Asia.

Fed Chairman Kevin Warsh is due to deliver the keynote address at this year’s Jackson Hole Economic Policy Symposium on Friday. It will give markets their first chance to hear from the new Fed chief at the central bank’s annual gathering in Wyoming.

It comes at a fraught time. A recent Treasury market intervention announced by Secretary Scott Bessent with the aim of pushing long-term Treasury yields lower raised eyebrows on Wall Street, to put it mildly. It was a move that seems to be at cross-purposes with the Fed’s messaging.

The Jackson Hole gathering is normally a chance for the Fed to lay out its views on the economy and its interest-rate strategy. How much Warsh will divulge is unclear. He has tended to play things close to the vest so far. One thing is clear, though: The market is hardly convinced by what it has seen coming out of Washington.

RT breaks down the latest developments in the world’s most important market and what the Fed chair might have to say on Friday.

Bessent’s ill-fated move to tame yields

A little over a week ago, Bessent announced that the Treasury would at least double its buyback operations of long-dated Treasuries. It was, as many such things are, framed as a mere liquidity operation. It was hard not to notice that the operation involves buying long-dated bonds at a moment when the Treasury very much wants long-dated yields to come down.

Bessent’s move was widely seen to have failed, given that about a day later, long-dated yields had risen above their pre-intervention levels. With the Iran war dragging on, fears are mounting that another surge of inflation could be around the corner. Investors would therefore demand higher yields on bonds, making Treasury’s task considerably harder.

What the market is saying

Billionaire investor Stanley Druckenmiller recently penned an op-ed for the Wall Street Journal in which he wrote that “governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding,” The fundamentals, in this case, are rising inflation expectations and runaway US debt that has many wondering if Treasuries are losing their hallowed safe-haven status.

Economist and strategist Philip Pilkington claimed that a “desperate” Bessent is “fighting against gravity” and that the intervention indicated that the Treasury chief fears that high yields could trigger a financial crisis, noting that last time yields were this high, the 2008 crisis was just around the corner.

Politico, meanwhile, wrote an article titled ‘Wall Street turns on Scott Bessent’ in which it surmised that the Treasury secretary’s credibility as a steward of US financial markets is “under threat.”

On the heels of another intervention

One may wonder what it is about the yen’s weakness that is keeping Bessent and his colleagues up at night. Officially, the intervention was taken to counter “excessive volatility and disorderly movements” in the yen. Lurking underneath is the fear that Japan could have to resort to unloading a portion of its massive US Treasury holdings in order to support its beleaguered currency. This move would, among other things, push US rates higher.

The intervention achieved little, however, with the yen edging higher before giving up around half of the gains within a week. It was a quixotic effort to begin with. The road is littered with the bones of interventions not supported by economic policy adjustments. When the monetary authorities intervene in markets, they have a tendency to get tested and end up having to defend the move over and over.

Two people trying to drive the same car in opposite directions

Evidently not feeling much comfort, however, was Bessent, who a few weeks later would go on to announce the intervention with the aim of pushing long-term yields lower.

Despite incessant calls for lower rates by President Donald Trump, Federal Reserve officials are debating possibly hiking rates at their next meeting in mid-September. Inflation remains above the Fed’s 2% target while the inflationary repercussions of the Iran war may yet be forthcoming.

Warsh has also discussed reducing the Fed’s $6.7 trillion portfolio of government bonds and mortgage-backed securities, a move that would represent a tightening of monetary policy – not least because reducing the Fed’s holdings would remove a source of demand for longer-dated securities.

This would put the Fed at cross-purposes with the Treasury, which is seeking to increase its own balance sheet of Treasuries in order to suppress yields at the long end.

The Fed and Treasury are under no obligation to coordinate their moves – indeed, they are not supposed to. They have different jobs. But visibly conflicting policy, particularly when the moves effectively cancel each other out, is not typical and tends not to go over well on Wall Street.

The $40 trillion elephant in the room

The US fiscal situation continues to deteriorate with no end in sight and little prospect for improvement. In fact, it is beginning to snowball under the weight of its own interest expense. The national debt crossed the $40 trillion threshold earlier this month. It has been climbing at a pace of roughly $1 trillion every five months, adding the equivalent of a whopping $7-8 billion a day.

Entitlements – such as Medicaid and Social Security – are sacred cows in the US. No administration has succeeded in materially reforming these systemic pillars in generations, and few have seriously tried. The Trump administration has shown little appetite for the kind of spending restraint that would alter the country’s fiscal trajectory. That has left investors wondering whether the only source of restraint left is the bond market.

What to expect from Warsh

Investors are hoping that Warsh will weigh in substantially on the economy and the Fed’s inflation strategy at Jackson Hole. It may be too much to hope that he will address Bessent’s recent efforts. The Fed has often used the Wyoming gathering to shed light on its thinking about rate policy. So far since heading up the central bank, however, Warsh has given markets slim pickings, an approach that represents a break with his predecessors.

In fact, Warsh has floated the idea that the Fed should hold rate-policy meetings less frequently and is apparently considering scaling back the post-meeting press conferences. There is logic to this approach: When the market is kept guessing, it might indulge in less risk. Highly telegraphed interest rate policy can become a fat target for investors.

Trump picked Warsh to head the Fed in hopes that he would deliver the aggressive interest rate cuts that the president has been unabashedly advocating. Warsh, however, has demurred, but has also managed to avoid Trump’s wrath, which has more times than not been directed toward the remaining FOMC members, many of whom are holdovers.

That may make Friday’s speech all the more interesting. With the Treasury trying to push long-term yields down, the Fed arguing that higher yields can help restrain inflation, and the fiscal outlook putting pressure on both, Warsh will have plenty to talk about. Whether he chooses to do so is another matter.

US grain farmers have been plunged into their worst financial crisis in four decades as the war with Iran drives up diesel and fertilizer costs, the Financial Times reported on Tuesday. The latest price shock compounds years of weak crop prices and falling incomes.

The mounting pressure follows the US-Israeli attack on Iran in February, which prompted Tehran to largely block commercial shipping through the Strait of Hormuz, a key route that previously served about a fifth of the world’s energy supplies. The resulting surge in energy costs is hitting the US heartland ahead of November’s midterm elections, which will determine control of Congress.

Farmers across the Corn Belt have been particularly hard hit by soaring diesel and crop nutrient prices since the military campaign began, the FT reported. Nebraska Farmers Union president John Hansen described the downturn as the sector’s worst since the 1980s.

”Inputs are way out of whack,” Nebraska corn and soybean farmer Matt Bailey told the newspaper. He said a phosphorus-rich fertilizer used at planting now costs more than $900 per ton, compared with about $470 a decade ago.

”The [Iran] war has made so much uncertainty for us as farmers,” Pam Johnson, a former president of the National Corn Growers Association, told the FT. “It’s projected that farmers aren’t going to make any money for the next two years.”

The latest shock comes after several difficult years for major US crops. American Farm Bureau Federation economists estimate that growers of nine principal crops will lose about $31 billion in 2026 without federal assistance, with losses expected to reach $32 billion next year. Corn producers are projected to lose $131 per acre this year and $167 in 2027, while soybean losses are forecast at $80 and $138 respectively.

Farmers also blamed Washington’s trade disputes for weakening overseas demand, particularly for US soybeans in China. The Trump administration asked Congress in June for another $11 billion in assistance for the sector after billions of dollars in earlier payments.

Russia and China have expanded trade links through the Arctic, with the first Chinese container ship arriving at the northern Russian port of Murmansk via the Northern Sea Route (NSR), Rosatom announced on Monday. Beijing has described the growing cooperation as part of its Ice Silk Road initiative.

The NSR runs through Russia’s Arctic waters and exclusive economic zone, relying on Russian ports and icebreakers. State atomic energy corporation Rosatom oversees the route’s development, navigation, infrastructure, and maritime safety.

NewNew Shipping Line’s Xin Xin Hai 1 arrived in Murmansk on Wednesday carrying 500 containers of automotive components, Rosatom said.

“This was the first container ship from China to arrive at the Murmansk Commercial Sea Port,” the corporation said.

NewNew Shipping Line has operated along the NSR since 2023, although its vessels have generally carried cargo to ports in Russia’s Far East or the Baltic.

China is ready to continue “playing the role of a bridge” to support cooperation between Chinese companies and Murmansk Region and further develop the Ice Silk Road, Chinese Consul General in St. Petersburg Luo Zhanhui said on Thursday.

Ke has also expressed interest in investing in the ports of Murmansk and Arkhangelsk in Russia’s far north and acquiring a stake in the port of Ust-Luga.

China accounted for around 40% of Murmansk Region’s foreign trade in 2025, when the region traded with 48 countries, according to Governor Andrey Chibis.

The Northern Sea Route provides a shorter maritime link between East Asia and northern Europe and can cut around two weeks from a voyage between China and Europe compared with the route through the Suez Canal, according to Rosatom.

Interest in the Arctic corridor has also grown as the US war with Iran and instability in the Middle East have disrupted shipping through the Persian Gulf and Red Sea. South Korea launched its first trial container voyage to Europe via the NSR on Saturday, while India plans to send its first cargo ship along the route in 2027.

The US national debt has surpassed $40 trillion for the first time, reaching the milestone months earlier than expected as Washington’s borrowing accelerates amid persistent deficits, rising interest costs, and military spending.

The debt was expected to reach the milestone next year, but it has jumped by $1 trillion since March. For comparison, it took nearly 200 years for total US debt to reach $1 trillion for the first time, in 1981.

Treasury Department figures released Wednesday showed total outstanding debt reaching about $40.05 trillion, equivalent to roughly $119,000 for every person in the country or more than $366,000 per federal taxpayer. The debt has doubled since January 2017, when it stood at roughly $20 trillion.

The debt is essentially the accumulated result of annual federal budget deficits. When Washington spends more than it collects in taxes and other revenue, the Treasury covers the shortfall by borrowing.

Much of the increase has accumulated under President Donald Trump’s two terms and Joe Biden’s presidency. Trillions were added during Trump’s first term and under Biden as Washington borrowed heavily to fund Covid-19 relief and cushion the economic fallout from the pandemic.

More recently, the US war with Iran has created another major unplanned expense. Defense Secretary Pete Hegseth said in July that the conflict had cost Washington about $37.5 billion, while the actual cost is likely to be much higher.

Social Security, Medicare and other mandatory programs remain major drivers of federal spending. Tax cuts under successive administrations have, meanwhile, reduced revenue without corresponding spending reductions, leaving Washington to finance the gap through additional borrowing.

The debt itself is also becoming increasingly expensive. As borrowing has grown and interest rates have risen, annual federal interest payments have climbed above $1 trillion, making debt servicing one of Washington’s largest expenditures.

Of the $40 trillion total, about $32.3 trillion is held by the public, while roughly $7.8 trillion represents obligations between federal government accounts. Most publicly held debt is owned domestically by pension and mutual funds, banks, individuals, companies and the Federal Reserve. Foreign countries also hold trillions in Treasury securities, with Japan, the UK and China among the largest overseas holders.

Russia seeks foreign technologies and management expertise rather than investment based on simple “screwdriver assembly,” presidential adviser Anton Kobyakov has said.

Speaking to TASS on Sunday ahead of the Eastern Economic Forum in Vladivostok, a major international platform for attracting investment to Russia’s Far East and expanding economic ties with the Asia-Pacific, Kobyakov said Moscow favors pragmatic, “win-win” cooperation involving joint production, capital-intensive industries and scientific research.

“We need the best management practices and the best technologies – all of it!” Kobyakov said. “We no longer want to engage in ‘screwdriver assembly’ of some components of their products. We have done this before,” he explained, referring to a model where foreign manufacturers import largely finished components for basic final assembly.

Numerous US, European, and Asian companies pulled out of Russia due to supply problems caused by the sanctions imposed on Moscow by the West after the escalation of the Ukraine conflict in 2022. Other firms left due to the risk of secondary sanctions or public relations pressure.

Moscow has since tightened the rules for potential returns. Earlier this month, President Vladimir Putin signed legislation allowing Russian courts, under certain conditions, to terminate buyback rights held by foreign investors.

Kobyakov said businesses from Germany, France, Italy, the UK, Switzerland, Spain, Greece and the Netherlands continue maintaining contacts with Russia despite political pressure from their governments.

Russian officials have argued that Western sanctions ultimately strengthened domestic industry by spurring import substitution and domestic production. Putin said last year that sanctions had become “a powerful catalyst for structural changes” in the economy, prompting Russian businesses to occupy market niches abandoned by foreign companies and accelerate the development of domestic technologies.

Thousands of lawsuits accusing major social media companies of fueling addiction and harming young users can move forward in the US after a federal appeals court rejected an attempt to halt the litigation.

The San Francisco-based Ninth Circuit Court of Appeals dismissed appeals by Meta and TikTok on Monday against earlier rulings that allowed more than 3,000 federal cases to proceed.

The companies sought to challenge the cases under Section 230, a US law that protects online platforms from some claims involving content posted by users.

The appeals court ruled that they could not use the law to stop the cases from moving forward at this stage, saying Section 230 “merely provides a defense to liability – not immunity from suit.” The ruling does not determine whether Meta, TikTok, and other companies are responsible for the alleged harms.

The lawsuits target Meta, Google, TikTok, Snap, and other companies and have been brought by individuals, school districts, US states, and local authorities. They accuse the platforms of using features designed to keep children and teenagers engaged, allegedly contributing to addiction, depression, anxiety, and other problems.

The decision follows another setback for the industry in March, when a Los Angeles jury found Meta and Google negligent in the first social media addiction case to reach a verdict. It awarded $6 million to a 20-year-old woman who said she became addicted to Instagram and YouTube as a child. Both companies denied wrongdoing and have challenged the verdict.

The legal battles come as governments around the world tighten rules on children’s access to social media amid concerns over addictive features, harmful content, and weak age checks.

The US has introduced new trade measures targeting imports of polysilicon, a crucial material used in semiconductors and solar panels, a move that marks a further escalation in the ongoing technology rivalry with China. President Donald Trump signed an executive order late Thursday, which imposes a 15% tariff and establishes minimum import prices for polysilicon and related products, with measures scheduled to come into effect in December.

According to the order, the tariffs are intended to revive domestic polysilicon production after decades of foreign competition weakened US manufacturers in a sector considered critical to advanced technologies and national security.
The White House said that the US share of global polysilicon production capacity had fallen from 50% in 2005 to less than 2% in 2024. The country’s share of global semiconductor wafer fabrication capacity declined from 37% in 1990 to 10% in 2024, while the US has become almost “entirely dependent on imports” of solar ingots, wafers, and cells.

Polysilicon, an ultra-pure form of silicon derived from quartz, is the primary raw material used to manufacture semiconductors and solar panels. China accounted for more than 90% of global polysilicon production in 2024, according to industry data.

“The US move seriously disrupts normal trade and economic exchanges between Chinese and US businesses,” Chinese embassy spokesman Liu Chang told the South China Morning Post, adding that “protectionism will not make the US more competitive.”

The US announcement came a day after China unveiled a new round of retaliatory measures, including tighter export controls on drones and related technologies, sanctions on seven US companies, and its first national security review of foreign trade-related imports. Beijing stated that its actions were a response to recent restrictions imposed by the US, which included sanctions on numerous Chinese companies and a ban on imports of new Chinese drones, humanoid robots, and specific power inverters from last month. The restrictions were announced just ahead of a scheduled meeting between Trump and Chinese President Xi Jinping in the US next month.

US Treasury Secretary Scott Bessent has said the country’s long-running economic divide between wealthier and lower-income Americans is narrowing, even as inflation and high living costs continue to weigh on consumers.

Bessent made the remarks in an interview with CNBC this week, dismissing the idea that the US remains a “K-shaped economy” – a term describing an economy in which wealthier households continue to prosper while lower-income groups fall further behind.

“I got sick of hearing about this K-shaped economy,” Bessent said. “I can say here definitively, the K-shaped economy is over.”

The Treasury chief said the country was instead moving toward what he called a “C-shaped economy,” with lower-paid workers beginning to catch up. He said the bottom 25% of workers had recorded a 2% real wage gain, comparing the trend with wage growth during President Donald Trump’s first term.

The remarks come ahead of November’s midterm elections, with the Federal Reserve’s preferred inflation gauge remaining above its long-term 2% target. Soaring energy costs fueled by the US-Israeli war on Iran, together with Trump’s global tariffs, have continued to add pressure to consumer prices. A Marquette University Law School poll released this week found inflation and the cost of living remained Americans’ top concern, cited by 35% of respondents.

Trump has repeatedly pointed to record gains on Wall Street as evidence that the US economy is strengthening. He said the stock market had reached dozens of record highs since he returned to office and that the “typical American 401(k)” retirement account had gained more than $30,000.

Moody’s Analytics estimated that households earning more than $200,000 accounted for nearly 60% of consumer spending in the first quarter of 2026, with their spending continuing to outpace inflation. Inflation-adjusted spending by the remaining 80% of earners, however, was broadly unchanged.

Recent wage data also offered a more mixed picture. The Federal Reserve Bank of Atlanta’s Wage Growth Tracker shows wage growth has remained positive this year but does not indicate that earnings for the lowest-paid workers have overtaken those at the top of the income scale.

Bessent also pointed to tax measures included in Trump’s ‘One Big Beautiful Bill Act’, including tax breaks on some tips and overtime earnings, deductions for certain auto loan interest, and lower taxes for some retirees, arguing they would increasingly benefit American households over time.

Japan and the US have officially confirmed an extraordinary joint intervention to rescue the yen after its collapse toward a four-decade low spilled over into the already strained American government-debt market.

Japanese Finance Minister Satsuki Katayama announced the operation on Monday morning in Tokyo, saying the two governments jointly purchased yen during US trading on Friday, July 31.

The intervention was intended to counter “excessive volatility and disorderly movements” in the currency, Katayama said, adding that Tokyo remained in close contact with the US Treasury and “will not hesitate to conduct further joint intervention.”

US Treasury Secretary Scott Bessent issued a nearly identical warning, saying Washington remained prepared to participate in additional joint action. He described the intervention as a matter of both economic security and support for a key American ally.

The operation was the first coordinated US-Japanese currency intervention since the G7 acted following the 2011 earthquake and tsunami in Japan. It was also the first time Washington had directly helped purchase yen to strengthen the Japanese currency since 1998.

Tokyo did not disclose which reserve assets it liquidated to support the yen, but the intervention coincided with a sharp selloff in US government debt, strongly indicating that Japan unloaded part of its enormous Treasury portfolio to finance the yen purchases. The benchmark ten-year Treasury yield jumped more than nine basis points on Friday to 4.735%, its highest level since 2023, while the 30-year yield reached 5.265% – a level not seen since the 2007 financial crisis.

Tokyo has not disclosed the precise cost of the latest operations, but analysts estimated that Japan may have spent close to ¥8.45 trillion (roughly $53 billion) during Thursday’s initial intervention alone.

Washington itself was forced to liquidate some of its euro holdings to support the yen, with the New York Fed selling Europe’s common currency on behalf of the US Treasury – effectively shifting part of the burden of Japan’s rescue onto its European allies.

US President Donald Trump said on Sunday that Japan had asked Washington for “a little bit of help,” arguing that the operation would produce a “financial benefit” for the US and was also “good for the world economy.”

Washington announced a ban on new foreign-made humanoid robot imports to the US on Tuesday, mainly targeting China, one of the world’s leading producers. The Federal Communications Commission (FCC) cited “unacceptable risks” to US national security in explaining the move. Beijing has consistently dismissed similar US measures as politically motivated.

It comes amid an intensifying race between Washington and Beijing to dominate AI and other advanced technologies. In recent years, the two countries have increasingly imposed a series of reciprocal restrictions on each other’s technology sectors.

The latest restrictions apply to new foreign-made advanced robotic devices, including humanoid and four-legged robots, as well as power inverters used in data centers and solar installations. The FCC said the products pose “unacceptable risks” to US national security, claiming that they could enable foreign actors to conduct surveillance, steal data, facilitate remote access, or launch cyberattacks. Existing models previously authorized by the agency are exempt from the ban.

Washington has imposed increasingly broad restrictions on Chinese technology over the past several years. Since 2022, the US has progressively tightened restrictions on exports of advanced AI chips, semiconductor manufacturing equipment and related technologies, while also curbing American investment in China’s AI and chip sectors. The White House has also moved against Chinese-connected vehicles, drones, and social media platforms citing national security concerns and alleging intellectual property theft.

Earlier this month, the White House and US AI firm Anthropic accused Chinese startup Moonshot AI of using “distillation” to train its Kimi K3 model on US technology. Moonshot denied the allegations, saying the model’s performance stemmed from its own technological innovations. US Treasury Secretary Scott Bessent warned last week that Chinese firms engaged in “industrial-scale distillation” amounting to intellectual property theft could face sanctions.

Earlier this week, Beijing urged the US to “abandon its hegemonic mindset, and stop smearing Chinese companies and threatening them with sanctions” having vowed to “take all necessary measures” in response to any moves that harm China’s interest.

China’s largest memory-chip maker, ChangXin Memory Technologies (CXMT), has become the mainland’s most valuable listed company after its shares jumped more than five fold on their market debut.

The company raised 57.9 billion yuan ($8.6 billion) in Asia’s biggest IPO of the year on Monday. Its shares surged 466% in Shanghai trading, leaving it with a market capitalization of around 3.3 trillion yuan.

Founded in 2016, CXMT has emerged as China’s leading producer of dynamic random-access memory (DRAM) chips, used in smartphones, personal computers, servers, AI systems, and military equipment. The company now accounts for roughly 8% of the global DRAM market, making it the world’s fourth-largest manufacturer behind Samsung Electronics, SK Hynix, and Micron.

The US has been trying for years to hold back China’s semiconductor industry. Since 2022, Washington has imposed sweeping export controls on advanced chipmaking equipment and technology, expanding them further in late 2024 to target China’s ability to manufacture cutting-edge semiconductors. The restrictions were intended to limit China’s access to the tools needed to produce the most advanced chips used in AI and military applications.

According to the company’s IPO prospectus cited by China Daily, CXMT plans to use the IPO proceeds to increase manufacturing capacity, upgrade its DRAM technology, and fund research and development.

Semiconductors have have become a main front in the race between the US and China for technological leadership. While US officials say export controls are needed to preserve America’s lead in advanced chips, China has accelerated investment in domestic chip design, manufacturing and research.

The IPO follows a series of advances by China’s technology sector. Last month, a Chinese-built supercomputer reclaimed the top spot in the global TOP500 rankings, while domestic companies have continued to improve AI processors, semiconductor manufacturing equipment, and other high-performance computing technologies despite US restrictions.

German luxury carmaker Porsche will eliminate another 5,000 jobs by 2035, bringing its planned workforce reduction to around 9,400 positions as Germany’s once-dominant automotive industry struggles with soaring costs, collapsing competitiveness and government policies that have deprived manufacturers of affordable energy.

The Volkswagen subsidiary reached an agreement with labor representatives on Monday to eliminate the positions without compulsory redundancies, primarily through natural attrition, partial retirement and voluntary severance programs. Under the deal, however, the remaining employees will accept slower wage growth, smaller bonuses, stricter remote-work limits and changes to break arrangements and production cycles.

Porsche had previously announced 3,900 job cuts, while another 500 positions are being lost through the closure of subsidiaries. The combined cuts represent roughly one fifth of its workforce but will fall disproportionately on its high-cost German operations, where nearly 40% of positions will be eliminated.

The consequences have spread across Germany’s entire industrial base. The economy contracted in both 2023 and 2024, marking its first back-to-back annual decline in more than two decades, while corporate insolvencies rose by more than 22% in each year. BASF, Bosch, Volkswagen and numerous other manufacturers have shut down factories or announced major reductions since 2022.

Porsche became one of the most prominent casualties of that approach, abandoning a planned all-electric platform after years of investment. The reversal contributed to €3.9 billion in extraordinary expenses in 2025, while its operating profit plunged nearly 93%, from €5.6 billion to just €413 million. The company has also been hit by collapsing sales in China, which have fallen to less than half their 2021 peak.

The cuts come as parent company Volkswagen considers doubling its previously announced workforce reduction from 50,000 to as many as 100,000 positions. Germany’s automotive industry has already shed around 125,000 jobs since 2019, with Mercedes-Benz, BMW and major suppliers also reducing costs and staff.

The EU has rolled back sanctions on Russian sable pelts, easing restrictions on the luxury fur after pressure from heavily dependent member states, Euractiv has reported.

The reversal was reportedly included in Brussels’ latest sanctions package, which was agreed upon last week, scrapping a ban on imports of raw Russian sable that had only been introduced in April. The measure was part of the EU’s 21st round of restrictions since the escalation of the Ukraine conflict in February of 2022. This time, however, the bloc was forced to push through a watered‑down package due to growing disagreements, as sanctions increasingly clash with member states’ economic interests.

Citing EU officials on Monday, Euractiv reported that the European Commission argued that the exemption was needed because Russia dominates the sable trade, leaving European manufacturers with few alternative suppliers. “Apparently, it’s very difficult to get them anywhere else,” a senior EU official was quoted as saying.

Italy and Greece, the two main EU buyers of Russian sable pelts, reportedly pushed for the carve‑out. Fur manufacturers in Greece, which hosts one of the EU’s last remaining production hubs, had warned earlier that the sanctions could spell the end of the industry.

Russian sable coats have long been marketed as a status symbol, with some pieces selling for tens or even hundreds of thousands of euros. According to Russia’s Sojuzpushnina auction house, Italian and Greek companies are among the leading international buyers, alongside Chinese and Russian clients.

Italy and Greece also played a significant role in watering down the sanctions package adopted last Thursday, as Rome opposed tighter visa restrictions, while Athens secured an exemption for Russian LNG supplies.

The latest policy shift comes as Brussels is rethinking its wider sanctions strategy against Moscow, which is now showing signs of strain, according to a report by the Financial Times.

Resistance to the latest package was reportedly stronger than at any point since the campaign began. EU officials told the FT that the traditional approach, where measures are bundled into large packages requiring unanimous approval, is increasingly unworkable.

President Vladimir Putin has described the sanctions as a “Russophobic machine” that has proven “useless.” He has noted that the EU has “tried to sow discord” but inflicted “maximum damage” on itself, while asserting that “the people of Russia will never be broken by anyone.”

Global oil prices have surged toward $100 per barrel as fighting has again escalated in the Middle East.

Renewed hostilities between the US and Iran have again brought traffic through the Strait of Hormuz to a near halt, while the Tehran-allied Yemeni Houthis have joined the fray with attacks on tankers in the Red Sea and a naval blockade against Saudi Arabia in the Bab el-Mandeb Strait, at the mouth of the Persian Gulf – the second-most important route for energy shipments after Hormuz. Hormuz and Bab el-Mandeb together carry the equivalent of roughly a quarter of the world’s oil supply.

Global crude benchmark Brent futures reached as high as $102 per barrel on Thursday before closing slightly lower at $100.69 a barrel, the highest settlement level for Brent since May 22. Although Brent slipped back below $100 on Friday, it remained up more than 12% for the week and nearly 40% above its level when the Iran war began in February.

Goldman Sachs said Brent could exceed $120 a barrel in the fourth quarter and average $100 next year if disruptions in the strait continue through 2027, with further upside if the Bab el-Mandeb Strait and Suez Canal also face prolonged disruption. JPMorgan calculates each additional month of oil supply disruption could add around $7 to $8 a barrel to Brent, pushing monthly average prices to roughly $114 if the disruption lasts three months.

Oil already topped $100 this year – why worry this time?

Immediately after the conflict began and traffic through the Strait of Hormuz was blocked, Brent crude soared to a four-year high of $126.41 a barrel by the end of April. The US benchmark, West Texas Intermediate (WTI), also climbed to nearly $120 per barrel in March.

However, the worst-case scenario never materialized. Prices retreated steadily through June, eventually even falling below $70 a barrel. The decline followed the temporary US-Iran ceasefire memorandum and the resumption of tanker traffic through Hormuz, aided by a massive international release of strategic petroleum reserves and a sharp drop in global demand, particularly in China.

The pullback, though, may have created a false sense of complacency. Even Trump appears to have abandoned his earlier habit of reassuring markets with claims that a deal is just around the corner. The problem is that the market is far more stretched because the earlier reserve releases have left a much smaller buffer this time around.

What ultimately kept oil prices from spiraling out of control during the first round of hostilities was the willingness of countries to dip into storages. On March 11, the IEA’s 32 member states unanimously approved a drawdown of 400 million barrels of crude and refined products. Of that, the US committed to releasing 172 million barrels.

That leaves the US with limited room to comes up with extra barrels to offset a shortage.

Meanwhile, the IEA warned back in May that commercial oil inventories and floating storage were also being depleted rapidly, leaving only a few weeks’ worth of supply. This is despite the fact that the market had entered the initial crisis back in February with a substantial surplus and elevated commercial stockpiles.

“With the possibility of a ground war seemingly increasing by the day, and tanker traffic restricted through two of the most active chokepoints in the world, crude oil is suddenly positioning itself to within striking distance of the four-year high of $126.41, with the global economy drawing down so fast it will eventually be running on fumes,” Bob Yawger, director of energy futures at Mizuho, told Reuters.

Operating with critically low inventories leaves the global economy with little margin to accommodate any unexpected outage. Even a relatively modest disruption – such as a major refinery fire or further drone strikes on energy infrastructure – could quickly trigger panic buying and another sharp spike in prices.

Another sign that the global oil market is stretched thin is the surge in refining margins. Known in the industry as crack spreads, these represent the profit refiners earn by turning crude oil into products such as gasoline, diesel, and jet fuel. Put simply, they measure the difference between the cost of crude and the value of the refined fuels produced from it.

While closely linked to crude prices, refining margins are primarily driven by the supply and demand balance for refined products. They tend to widen when fuel supplies become scarce, even if crude prices are already high. As governments and commercial operators drew down gasoline, diesel, and jet fuel inventories to cope with the Iran war, global refined product stockpiles shrank, sending refining margins to record or near-record levels.

The benchmark US 3-2-1 crack spread – the margin from refining three barrels of crude into two barrels of gasoline and one barrel of diesel – recently climbed to nearly $70 a barrel, a record high and nearly triple the normal level. In northwest Europe, refining margins rose to seasonal highs near $30 a barrel. European diesel crack spreads have climbed to around $65 a barrel, signaling an acute shortage of the fuel used by industry and heavy transport. 

The surge in refining margins can also create a feedback loop that keeps prices elevated. High margins caused by shortages encourage refiners to operate at or near full capacity, thus further increasing demand for available crude supplies. The resulting competition for crude helps support higher oil prices, even as refiners work to ease shortages of gasoline, diesel, and jet fuel.

What’s up with diesel?

Morgan Stanley recently warned that European diesel inventories were approaching multi-year lows. While the Middle East crisis has tightened supplies further, the market had also come under pressure after Russia imposed restrictions on diesel exports to protect its domestic market following Ukrainian drone strikes on refineries.

As a result, the US national average retail diesel price has surpassed $5.13 per gallon, up from pre-war baseline levels of $3.53. Average diesel prices across the EU have risen to around €1.84-€1.93 per liter.

Diesel is the backbone of freight transport, heavy industry, and agriculture. When supplies tighten and prices rise, transport companies pass higher fuel costs on to retailers, pushing up the price of everything from clothing and electronics to food.

Agriculture is particularly exposed. Tractors, harvesters, irrigation pumps, and other farm equipment run largely on diesel, meaning higher fuel prices raise the cost of planting, harvesting, and transporting crops, adding further pressure to grocery prices.

What about jet fuel?

While global jet fuel prices have retreated from their spring peaks, they remain highly volatile due to low inventories and elevated refining margins, broadly tracking the same trend as diesel. The two fuels are closely linked because both are refined from the same part of a crude oil barrel, forcing them to compete for limited refinery capacity.

European structural jet fuel reserves have fallen to less than a month’s supply, according to recent calculations by Reuters. This leaves airlines operating with virtually no safety buffer, forcing some carriers to cut or reroute flights as fuel prices remain highly volatile.

The global average jet fuel price stood at $149.40 a barrel as of July 17, up 17.6% from a week earlier, according to the IATA Fuel Price Monitor. However, because refiners can adjust output between diesel and jet fuel, the global diesel shortage is likely to increasingly divert capacity toward diesel production, where profit margins are higher. As fuel is typically an airline’s single largest operating expense, carriers would then pass those higher costs on to travelers through higher airfares and fuel surcharges.

How fares Russia?

The first phase of the US-Iran war, which sent global oil prices soaring, also drove the price for Russia’s Urals export crude from around $55 to a peak of $125 per barrel in early April. As a result, Russia’s monthly hydrocarbon revenues, which account for about one-fifth of federal budget income, surged from 393 billion rubles in January to 855.6 billion rubles ($10.9 billion) in April. Analysts estimate the conflict generated roughly 1.18 trillion rubles in additional energy revenue for Moscow between March and June.

The windfall gave the government greater fiscal flexibility, allowing the Kremlin to cancel planned 10% spending cuts to non-sensitive sectors and resume foreign currency purchases to replenish the National Wealth Fund.

After retreating in June, Urals prices climbed back to around $84.26 this week amid the latest escalation. Russian oil and gas revenues are estimated to rise by roughly 60% year-on-year in July.

While Ukrainian drone strikes on Russian refineries have reduced refining volumes and pushed up wholesale fuel prices, sustained higher oil prices are still expected to benefit Russia overall. Crude that cannot be processed at damaged refineries can instead be redirected to export markets. India and China continue to buy record volumes of Russian seaborne oil.

A Ford factory in Spain will be used by Chinese auto-giant Geely to build electric vehicles for the European market, Spanish Prime Minister Pedro Sanchez has announced, confirming earlier media reports.

The deal will give the automaker its first vehicle production site in the EU, allowing it to bypass the bloc’s tariffs on Chinese-made electric vehicles.

Geely will build vehicles on an idle assembly line at Ford Motor Company’s facility in Almussafes, Valencia, Sanchez announced on Thursday during a visit to the plant. He described the agreement as a way to preserve production and industrial activity at the facility.

Once Ford’s largest plant outside the US, it has been running at less than a quarter of its annual capacity of 450,000 vehicles, as Ford scaled back its European operations in 2023 after years of losses in its passenger-car business.

Several Chinese automakers have responded by localizing production in Europe. BYD is building a factory in Hungary, Chery has taken over Nissan’s former plant in Barcelona, SAIC is pursuing manufacturing plans in Spain, while Leapmotor assembled vehicles through its partnership with Stellantis in Poland and is now shifting production to Spain.

The agreement comes as Europe’s automotive industry grapples with weak demand, rising energy and labor costs, and the costly transition to electric vehicles.

The EU imported a record volume of liquefied natural gas (LNG) from Russia’s flagship Yamal project in the first half of 2026, ahead of a planned ban on supplies from Russia, the Financial Times has reported. 

Brussels has promised to ban imports of Russian LNG under long-term contracts from January 1, 2027 which would eliminate supplies that currently account for around 14% of the bloc’s imports of the fuel. Purchases under new short-term contracts are already prohibited.

The bloc bought 9.89 million tons from Yamal LNG, operated by Russian energy giant Novatek, up 18% year-on-year and absorbing nearly all of the Arctic facility’s output, months before the EU import ban is due to take effect, the outlet said on Monday citing data from energy analytics firm Kpler.

Meanwhile, Yamal LNG shipments to Asia dropped 74% year-on-year to just over 510,000 tons as Europe soaked up most of the project’s output.

The EU has faced soaring energy costs after scaling back imports of Russian energy following the escalation of the Ukraine conflict and pursuing an ambitious green transition. The situation has been exacerbated by the Middle East crisis, which disrupted LNG supplies from Qatar – the source of roughly a fifth of global exports. 

Having replaced much of its Russian gas with more expensive American LNG, the bloc has been particularly vulnerable to the resulting supply shock. Ivan Jimenez, the head of one of Europe’s largest LNG import hubs, the Port of Bilbao in Spain, urged Brussels last month to postpone its planned ban on Russian LNG, warning that the EU risks becoming overly dependent on US supplies.

The EU’s shift away from Russian energy has made the US its largest external gas supplier and has been hailed by Brussels as a step toward greater energy security. However, Washington has already begun leveraging its dominant position in Europe’s energy market. Last month, US Energy Secretary Chris Wright warned that American LNG exports would “flow somewhere else” if the EU refused to revise its planned methane emissions monitoring rules for imported gas, which are due to take effect in 2027.

Major European banks are suing a German industrial group for hundreds of millions of euros over its withdrawal from a Russian gas project due to EU sanctions, the Financial Times reported on Monday.

The dispute centers on a €10 billion ($11.4 billion) gas processing plant in Ust-Luga near St. Petersburg, agreed in 2021 between Gazprom-linked RusChemAlliance (RCA) and a consortium that included German engineering company Linde. After receiving more than €1 billion in advance payments, Linde halted work in 2022, citing EU sanctions. RCA sought compensation, prompting Russian courts to seize assets held by several European banks in Russia and target Linde’s Russian joint-venture interests.

According to the FT, Deutsche Bank is seeking about €260 million from Linde, while UniCredit has filed a separate claim worth roughly €450 million. Commerzbank is also suing the company for nearly €100 million.

The banks argue Linde is contractually obliged to reimburse them after they refused to honor guarantees issued for the project, saying payment would have violated EU sanctions. The guarantees had been issued after RCA advanced more than €1 billion to Linde.

The litigation could determine whether banks that issue guarantees remain liable for losses caused by sanctions or whether they can recover those costs from companies whose withdrawal triggered the claims, the FT said.

Linde said the Frankfurt lawsuit concerns “complex issues relating to a guarantee agreement” tied to a Russian industrial project that it terminated in compliance with EU sanctions. The company declined further comment because of the ongoing proceedings. It has disclosed contingent liabilities of about $1.2 billion related to advance payments received for the cancelled RCA projects.

Many international companies suspended operations or exited Russia after the EU and other Western nations imposed sweeping sanctions in 2022, triggering a wave of contractual disputes over projects, assets, and financial obligations.

EU regulators have accused US tech giant Meta Platforms of failing to protect users of Facebook and Instagram from features they say encourage compulsive use and harm wellbeing. Meta has rejected the allegations. 

The European Commission said on Friday that its investigation found Meta had failed to properly assess the risks posed by features such as autoplay, infinite scroll, push notifications, and highly personalized recommendation systems, particularly for children and other vulnerable users. Regulators said the company did not adequately consider nighttime use by minors or whether Reels and Stories could contribute to excessive engagement. 

The Commission also found Meta’s safeguards insufficient, saying links to mental health resources alone do not adequately reduce the risks. It urged the company to redesign key features, introduce effective screen-time breaks, and make its recommendation systems less engagement-driven. 

Meta rejected the findings, arguing they fail to reflect the measures it has already introduced to protect younger users.

If confirmed, the findings could result in a fine of up to 6% of Meta’s global annual revenue, more than $12 billion based on the company’s reported 2025 revenue. 

The Commission is also investigating whether Meta’s recommendation systems create so-called “rabbit hole” effects by repeatedly directing users toward similar content and exploiting the vulnerabilities of younger users. In a separate preliminary finding in April, regulators concluded the company had failed to do enough to prevent children under 13 from accessing its platforms. 

Global oil demand is on track to post its first annual decline since the Covid-19 pandemic as the US-Iran war has severely disrupted Middle Eastern oil production and exports, the International Energy Agency (IEA) has said.

The Middle East conflict, triggered by the US-Israeli bombing campaign on Iran in late February, has slashed Gulf oil production and exports, prompting the largest-ever emergency stock release by IEA member countries.

While exports have gradually resumed, production and inventories remain below pre-war levels. The lingering effects of the war, including disruptions in the Strait of Hormuz, have cut fuel demand by driving up prices, straining supplies, and weighing on economic activity.

The German government will introduce an energy levy to fund the construction of a national gas reserve. German industry, which is already struggling with soaring energy costs, will bear the brunt of the levy.

Germany’s Ministry of Economic Affairs confirmed this week that it will build a strategic gas reserve equivalent to 10% of the country’s storage capacity – two weeks of wintertime usage – in order to guarantee supplies if imports are cut off. The reserve will be filled over 2027 and 2028, and will cost €1.5 billion ($1.7 billion) to establish, and up to €310 million per year to maintain, according to Bloomberg. 

The reserve will not be funded by Germany’s federal budget, but by consumer levies. For households, this will translate to a €42 rise in energy bills, according to comparison site Verivox. For heavy industrial users, the levy could amount to millions of euros, Bloomberg reported.

Germany’s industrial energy costs are already the third-highest in the world, behind the UK and Japan. Once Europe’s industrial powerhouse, Germany abandoned cheap Russian gas imports in 2022, and combined with the phaseout of nuclear power in favor of renewables, this embargo has decimated the country’s industrial output.

Industry spokespeople have warned that additional levies will only hasten Germany’s deindustrialization. “Greater security of supply is a good thing – but making industry foot the bill for it is not,” German Chemical Industry Association Director Wolfgang Grosse Entrup told Bloomberg.

Before Germany’s self-imposed Russian energy embargo, Russia supplied 55% of the country’s natural gas imports. Germany now sources its gas from Norway (44%), the Netherlands (24%) and Belgium (21%), with American liquefied natural gas (LNG) accounting for most of the remainder. 

LNG prices almost doubled earlier this year when a fifth of the world’s supply was taken offline due to Iranian retaliatory strikes on Qatari energy infrastructure and the closure of the Strait of Hormuz. Without Russian imports to fall back on, the German government began discussing a strategic gas reserve several months ago, Bloomberg reported.

Germany has recorded its highest number of corporate bankruptcies in more than two decades, with nearly 5,000 companies filing for insolvency in the second quarter of 2026, according to the Halle Institute for Economic Research (IWH).

A total of 4,996 companies filed for insolvency in April-June, up 9% from the previous quarter and marking the highest second-quarter figure since 2005, the institute said in a report published on Thursday.

The increase spanned almost all major sectors, including construction, real estate, trade, hospitality, and services, affecting around 45,500 jobs.

In June alone, 1,702 companies filed for insolvency, 20% more than a year earlier and 80% above the pre-pandemic average for the month.

Steffen Muller, head of insolvency research at IWH, said corporate failures remained at an “exceptionally high level.”

Germany, the EU’s largest economy, has faced mounting pressure from high energy costs since phasing out Russian oil and gas imports following the escalation of the Ukraine conflict in 2022. The strain has been compounded by a recent spike in crude prices triggered by the US-Israeli war on Iran, adding to pressure on the industrial powerhouse.

The German economy contracted in 2023 and 2024, marking its first back-to-back annual decline in more than two decades, and is projected to grow by just 0.5% this year. Official data shows corporate insolvencies have risen sharply in recent years, increasing by more than 22% in both 2023 and 2024.

US liquefied natural gas exporters are cashing in on the Iran war as the supplies have been disrupted and prices driven higher, a new regulatory filing shows.   

Venture Global, the second-largest US LNG supplier, reported a 69% jump in its average liquefaction fee in the second quarter, according to a filing posted on Wednesday.  

The Middle East conflict, triggered by the US-Israeli bombing campaign on Iran in late February, has choked off supplies from Qatar, which accounts for roughly a fifth of global LNG exports, creating a supply gap US producers are well placed to fill. Washington has moved to replace lost Qatari cargoes after Iranian strikes crippled the Ras Laffan hub in March, helping push US exports to record highs. Asian spot prices more than doubled in the week after the initial attacks, while European prices remain nearly 50% above pre-war levels. The EU has been particularly exposed to the disruption after replacing much of its Russian pipeline gas with costly US LNG.  

The increase came amid the war-related disruption of LNG flows in the Middle East. Venture Global has greater exposure to the spot market than many of its US rivals, which sell a larger share of their LNG under long-term contracts. Spot cargoes allow exporters to benefit more quickly from spikes in global prices. 

Calcasieu Pass, the company’s first export terminal, entered commercial production in 2022 and helped establish Venture Global as one of the largest LNG exporters in the US.

Venture Global is not the only beneficiary. Analysts also point to US LNG major Cheniere Energy as another winner from the conflict, as uncertainty in the Strait of Hormuz continues to drive global gas prices higher.

One of Ukraine’s biggest shipping companies has been plagued by decades-long corruption and mismanagement to the point where it began losing market share and assets even under highly favorable conditions, the Kiev Independent reports.

The Ukrainian Danube Shipping Company (UDP), a state-owned enterprise that operates cargo transportation along the Danube River and carries out shipbuilding and repairs, has been reporting poor performance figures and losses over the past years, even though the river itself turned into a major export route for Ukrainian grain and iron during the conflict with Moscow, according to the Kiev Independent.

According to a letter written in May by a UDP supervisory board member, Benoit Pleska, addressed to the Ukrainian parliament and obtained by the Kiev Independent, the company reported a collapse of over 62% of its freight division and a decrease in its Danube freight market share from 3.11% to 1.1% from 2020 to 2024, even though the market itself grew by more than 19% over the same period.

“Such a divergence cannot reasonably be explained by external circumstances,” Pleska wrote. He also attributed the slide to “structural managerial failure,” as well as “corruption that has plagued the company’s assets for decades, systematically destroying the UDP fleet.” He requested a parliamentary probe into the issue.

The parliament’s transportation and infrastructure committee responded to the letter in June by calling its contents a source of “of significant current concern [that] undoubtedly requires a hearing and detailed review,” Kiev Independent reported, without specifying if any action was taken.

According to the outlet, the company’s management had elicited suspicion in the past. In 2017, 32 UDP vessels were allegedly lost in an embezzlement scheme causing damages of nearly $2 million. The Ukrainian anti-corruption authorities opened a probe, but the case is still pending.

In 2020, the company’s former director, Aleksey Khomyakov, was investigated over a suspicious attempt to transfer dozens of UDP vessels to another company based in Hungary. This investigation has not produced any tangible results as of July 2026 either, according to Kiev Independent.

The scandal also led to the resignation of Zelensky’s former chief of staff, Andrey Yermak, due to allegations of involvement. He was later briefly arrested in a separate money laundering case before being released on approximately $3.2 million bail in May.

In June, the Ukrainian anti-corruption authorities announced that they uncovered another Energoatom graft scheme involving the alleged theft of at least $3.8 million in public funds that was also linked to Mindich.

Russia has long accused Ukraine and the EU of being linked by “unified corruption chains,” claiming that a significant portion of the Western aid to Kiev – financed by taxpayers – is embezzled and kicked back to Ukraine’s supporters.

European carmakers are facing one of the toughest crises in their history. Plant closures, layoffs, and shrinking profits have become increasingly common as Chinese electric vehicle manufacturers continue to expand their global footprint.

German luxury carmaker Porsche has become the latest victim. The company is expected to cut an additional 4,000 jobs, the Handelsblatt newspaper reported on Monday. In March, the sports car manufacturer reported a 93% drop in operating profits following a costly pivot away from its long-term EV strategy.

But these setbacks are only part of the story. Behind them lies a combination of soaring energy costs, mounting regulatory pressure, shifting supply chains, and intensifying international competition that is reshaping one of the region’s most important industries.

How bad is the crisis?

Since the Covid-19 pandemic and the global semiconductor shortage, European carmakers have been battered by weakening consumer demand and persistently high production costs, largely driven by elevated energy prices.

At the same time, expensive energy has left European manufacturers at a competitive disadvantage compared with many rivals in Asia and North America.

The strain is already triggering deep restructuring across the industry. Volkswagen, Mercedes-Benz, and BMW have announced job cuts and cost-cutting measures; Stellantis has reduced output at several European plants, particularly in Italy; Renault is continuing its restructuring in France; and the UK has seen factory closures as manufacturers struggle to contain rising costs.

Which countries have been hardest hit?

The crisis is weighing most heavily on countries where the automotive industry is a major source of jobs and economic growth. In 2019, the sector supported around 13.8 million jobs – 6.1% of total EU employment – and accounted for more than 7% of the bloc’s GDP.

Spain also remains heavily reliant on vehicle exports, while the Czech Republic, Slovakia, and Hungary are even more exposed, with much of their industrial output dependent on foreign-owned carmakers. As a result, even relatively small production cuts can have an outsized impact on jobs and regional economies.

Outside the EU, the UK also remains vulnerable. Although its automotive sector is smaller, it still supports around 200,000 manufacturing jobs and some 800,000 positions across the wider industry.

How much of the problem stems from energy prices?

Energy costs have become one of the key structural pressures on Europe’s auto industry. After the disruption of traditional energy flows, the shift away from relatively cheap Russian pipeline gas has increased reliance on more expensive alternatives, including liquefied natural gas (LNG) imports from the US. For an energy-intensive sector such as automotive production – where steel, aluminium, chemicals, and battery materials are essential inputs – this has raised costs across the entire value chain.

Combined with competition from regions with lower energy costs, this has eroded one of Europe’s traditional advantages: cheap and stable industrial energy. As a result, energy has shifted from a competitive strength to a persistent headwind for European automakers.

Why are European carmakers losing ground to China?

Europe’s weakening position in the global auto market is increasingly linked to the rise of China as the leading EV powerhouse. Chinese manufacturers have scaled up production rapidly, supported by fully integrated domestic battery supply chains – from raw materials processing to cell manufacturing – giving them a structural cost advantage over European rivals.

A vast domestic market also allows Chinese firms to produce at far larger volumes, lowering unit costs and speeding up innovation. By contrast, Europe’s market is fragmented across multiple countries and regulatory systems.

European automakers also face higher production costs, particularly for energy and labor, alongside heavier regulatory requirements linked to emissions targets and industrial policy. According to the International Energy Agency, China produced 12.4 million electric cars in 2024, compared with 2.4 million in the EU and around 80,000 in the UK – roughly five times the combined European output.

The green transition impact

The pressure has been amplified by slower-than-expected EV adoption across Europe. As demand lags behind targets, automakers are caught between costly EV investments and continued reliance on petrol and diesel models to sustain profits.

Several carmakers warn that both EU rules and the UK’s ZEV targets risk moving faster than consumer demand. Critics say regulation has outpaced market readiness, while supporters argue that slowing the transition would leave Europe trailing in the global shift to clean mobility.

Why aren’t Europeans buying new cars?

Years of high inflation have squeezed household budgets, making consumers more reluctant to make big-ticket purchases. Although the European Central Bank and the Bank of England have begun cutting interest rates, borrowing costs remain well above pre-2022 levels, keeping car loans and leasing expensive.

The transition to electric vehicles has added another obstacle. While EV prices are gradually falling, they remain higher than comparable petrol and diesel models, and concerns over charging infrastructure, driving range, and resale values continue to dampen demand.

Government policy has also weighed on sales. Several countries have scaled back or scrapped EV subsidies amid budget pressures. Germany, Europe’s largest car market, ended its purchase incentives in late 2023, contributing to a sharp decline in EV registrations.

What are European governments doing to tackle the crisis?

European governments are trying to support the auto industry without derailing the transition to cleaner transport, combining financial incentives, industrial investment, and more flexible climate rules.

The EU has invested in domestic EV and battery production, funding battery plants, critical raw materials, and charging infrastructure. It has also imposed tariffs on Chinese-made EVs over alleged unfair subsidies and relaxed CO₂ compliance rules by giving automakers more time to meet emissions targets. The UK has retained its ZEV Mandate while easing some compliance requirements and pledging further investment in domestic battery production and EV supply chains.

What happens if Europe fails to reverse the trend?

With millions of jobs tied to the auto sector, a prolonged decline would extend far beyond factory gates, hitting suppliers, local economies, and entire industrial regions. Analysts warn that further shrinkage could reduce exports, deter investment, weaken one of Europe’s key manufacturing sectors, and increase pressure on public finances.

The crisis also carries strategic risks. As China strengthens its lead in EVs and battery technology, Europe risks losing its automotive edge and becoming more dependent on imported vehicles, batteries, and critical technologies.

Earlier this week, fuel loading began at the final unit of Slovakia’s Mochovce Nuclear Power Plant. This is the final step before the commercial launch later this summer. The project – construction for which was launched by the Soviet Union back in 1987, in a world long vanished – will propel Slovakia to the leadership position for nuclear power in the EU.

But the step, as positive as it may seem for Europe’s beleaguered energy sector, is not without an entirely predictable controversy. The nuclear fuel for the new reactor will be supplied solely by TVEL Fuel Co., a subsidiary of Russian state nuclear company Rosatom. This comes as the European Commission has proposed ending dependence on Russian nuclear fuel in the early 2030s at the latest – part of a plan to decouple from Russian energy entirely.

Uranium products are necessary for the operation of the nuclear power reactors that generate nearly one quarter of electricity in the European Union. Nuclear power, meanwhile, is expected to only grow in the coming years. 

The EU currently imports just under a quarter of its nuclear fuel from Russia, which through Rosatom controls a significant share of the global nuclear fuel supply chain. Europe is dependent on Russia at multiple stages in the process. 

RT sheds light on how this process actually works and examines the question of just how feasible it will be for the EU to sever yet another energy bond with Russia.

The uranium fuel cycle: Why ‘nuclear fuel’ is not one thing

Discussions of Europe’s dependence on Russian nuclear fuel often treat what is in fact a series of distinct industrial processes as a single category. The process is as follows: Uranium is mined, converted to a gas, enriched, and then manufactured into what are called fuel assemblies – the final product that actually goes in the reactor. It is these fuel assemblies that are capable of sustaining a nuclear fission reaction. 

The EU has dependencies on Russia that cover every step of the uranium fuel cycle. 

Raw uranium 

Uranium is mined in many countries and is widely distributed around the world. However, Europe is fully dependent on imported uranium. Although the origins of uranium imported into the EU are relatively diversified, around 40% of EU uranium imports still came from countries of the Commonwealth of Independent States – primarily Kazakhstan (25%) and Russia (15%).

Replacing the Russian supply of uranium ore would not necessarily pose a significant challenge for the EU given that Russia provides only a small share of global primary supply. 

Conversion services

Conversion is the process of transforming uranium into uranium hexafluoride, the chemical form required for enrichment.

The market for conversion services is concentrated, with only a handful of major providers globally. Russia holds a strong position in this segment. The EU meets about 20% of its needs for conversion services domestically. Conversion services sourced from Russia account for a similar share, although this figure has declined somewhat in recent years. 

Russian conversion services have historically been cheaper than Western alternatives. Expanding capacity is a stated goal for Europe, but conversion is a highly specialized industrial activity requiring dedicated facilities and significant capital investment. It cannot be done quickly.

Natural uranium, as found in the Earth’s crust, exists primarily as a mixture of two main isotopes: U-238 and U-235. The former is vastly more abundant, but it is U-235 that actually sustains a controlled nuclear chain reaction that releases massive amounts of energy.

The problem is that U-235 comprises only about 0.7% of mined uranium, whereas most reactors for electricity production require fuel where the share of U-235 is around 3–5%. The process of raising the concentration is called enrichment.

Enrichment is done through centrifuges, which are ultra-fast spinning tubes that exploit the fact that U-238 is slightly heavier than U-235. When spun thousands of times, the heavier isotope shifts outward very slightly more than the lighter one. This process is repeated in long cascades of machines until the desired concentration is achieved.

Enrichment capacity is where the bottleneck tends to be. Only a small number of countries can do enrichment at industrial scale, and even fewer can do it cheaply and consistently. Russia can do both. 

European utilities – including operators of Western-designed reactors – purchase Russian enrichment because it is available, competitive, and reliable. Russian-enriched uranium is sometimes contracted even for non-Russian reactors. 

This is possible because it makes no difference to the reactors where the enriched uranium comes from. The fuel simply needs to meet the required specifications. 

Replacing Russian capacity would require expansion of existing infrastructure, as well as new projects currently under consideration in Europe.

Russian enriched uranium exports to the EU rose sharply in early 2026, reaching €163.5 million ($185.9 million) in the period from January to the end of April, compared with €20.7 million in the same period the previous year, according to Eurostat data released in June. 

However, Euratom Supply Agency figures show that while Russian-origin deliveries increased in absolute terms, their share dropped slightly to 22.6% from 23.6%, while EU-origin enrichment deliveries increased their share to 72.9% from 64%. 

Because nuclear-fuel consignments are large and relatively infrequent, a single delivery or spot purchase can skew short-term comparisons. Nevertheless, it is widely acknowledged that Russia will remain an important supplier for the time being.

Unlike enrichment, fuel assemblies – the fuel rods actually loaded into the reactor – are a highly specialized product tailored to specific types of reactors. This is also the EU’s most acute and locked-in dependency. Currently, 101 nuclear reactors are operating in the bloc, of which 19 are Russian-designed pressurized water reactors (VVER) units. Russia is the primary supplier for VVER reactor types across the world, including for the ones in Europe. 

There are two types of Russian-made reactors: the older VVER-440, developed during the 1960s and 1970s by the Soviet Union, and the newer VVER-1000. The VVER-440 has electrical output of roughly 440 MW per reactor (hence the name) and uses a distinctive hexagonal fuel assembly. There are still VVER-440s operating in Slovakia, Hungary, the Czech Republic, and Finland. 

The VVER-1000 is the later generation. Developed in the late Soviet period, the VVER-1000 is larger and more efficient. It also uses hexagonal fuel, but the assemblies are not interchangeable with those of the VVER-440. The VVER-1000 is by far the most common Russian reactor design internationally. 

The distinction matters because diversification has progressed at different speeds. Bringing to market alternate fuel assemblies for the VVER-440 has proven a slower process than for the VVER-1000, not least because there are fewer VVER-440 reactors still operating, making the commercial case for developing alternative fuel less attractive.

The North American company Westinghouse began developing alternative fuel for the VVER-1000 years ago but for the VVER-440 only more recently. It has developed alternative fuel designs and signed contracts with several European operators, but production capacity remains insufficient to meet full regional demand if Russian supplies were suddenly cut off.

In Slovakia, VVER-440 reactors generate 62% of the country’s electricity production (the new reactor at Mochovce is a VVER-440). In Hungary, the figure is 42%. As discussed above, fuel supply alternatives for this type of reactor are extremely limited and production capacity is constrained. Although countries tend to keep stockpiles of nuclear fuel to provide a buffer, any longer-term halt in Russian fuel supplies could thus risk serious electricity shortages across the region.

The path out of dependency on Russia goes through Russia

The other Western company involved in supplying VVER fuel is France’s Framatome. But it is not yet ready to produce entirely indigenous VVER fuel and is instead doing so under a license from TVEL. The two companies agreed to a long-term partnership to manufacture nuclear fuel in 2021 and also established a joint venture in France. 

Framatome is pursuing a plan to manufacture nuclear fuel rods and assemblies at a facility in Lingen, Germany for VVER-1000 reactors. The company argues that the project is key to EU energy security. But it would be based on the above-mentioned French-Russian joint venture using Russian components supplied by TVEL, although the Russian company would not be directly involved in operating the plant. 

Framatome has been lobbying intensely for Germany to sign off on the project. Lionel Gaiffe, senior vice president at Framatome, told Politico that the project would lead to “a truly European solution that is 100% sovereign,” adding: “Only Framatome can do that.” This is not a view of “100% sovereign” shared by everybody. 

The Lower Saxony Ministry of the Environment – where permission will ultimately have to be given – isn’t as impressed:

“How close license manufacturing and production with Russia – with Russian machines, expertise and finished fuel elements from Russia – can reduce dependence on Russian fuel elements is not clear to us.”

Nevertheless, in February 2026, Politico reported, citing people familiar with the matter, that the federal government had given Lower Saxony a conditional recommendation for approval.

How Russia achieved its market position 

During the Soviet Union, huge resources were allocated to strategic industries without short-term profitability constraints and where redundancy and scale were prioritized for national security reasons.

This led to vertically integrated nuclear systems – a legacy that post-Soviet Russia has maintained and developed further. Rosatom was the last Soviet-era ministry to be reorganized as a corporation, which took place over 2006-2008. It consolidated most of the industrial companies and many research centers in the nuclear sector, both military and civilian, under one umbrella. It also was tasked with becoming an export leader, a mandate it has fulfilled quite successfully. 

Rosatom is unusually vertically integrated by Western standards and can deliver projects with more ease of coordination. Western nuclear projects, meanwhile, are often delivered through complex consortiums. These can involve multiple contractors, utilities, financing institutions, and subcontractors. 

This fragmentation can seriously complicate coordination, particularly when projects face delays or cost overruns. Finland’s Olkiluoto 3 illustrates such risks. It experienced 14 years of delay, very large cost overruns, and extensive arbitration between the companies due to contractual disputes. 

Several EU countries are adding nuclear reactors in order to strengthen energy security without burning fossil fuels and thereby compromising on climate goals. This, of course, complicates the political objective of cutting Russia out completely. 

The technology does exist to decouple from Russia but the capacity is not there. It can be built but at great cost and over the span of years. This will require long-term commitment, sustained political will, and an acceptance of higher nuclear energy costs. It bears keeping in mind also that technical systems of this nature are slow-moving, whereas geopolitical narratives are fast-moving. 

Nevertheless, the Hague Institute concludes: “Despite these formidable challenges… full independence from Russian nuclear fuel services is technically achievable within a 2030-2035 timeframe, but success will require sustained political commitment and significant financial investment… the weak business case for alternative fuels is not likely to deliver results through competitive means alone, and a significant public involvement is required.”

These last words are significant. This, of course, ultimately means the taxpayer. The EU is a sprawling administrative bureaucracy with sophisticated channels for redistributing costs – including over time in the form of debt. The higher costs are not at absorbed at a single point but are dispersed throughout the system. In a system where financial capital is fungible, the real cost need not appear in one ledger. But that hardly means it doesn’t exist. 

Europe may well eventually achieve its aim of decoupling from the Russian nuclear fuel supply chain. Whether any benefits to Europeans will accrue from that hard-earned victory remains to be seen. 

The US Strategic Petroleum Reserve (SPR) is at a growing risk of failing to respond effectively to future energy crises because of aging infrastructure and record-low inventories, the Government Accountability Office has warned.

The US Congress created the SPR in 1975 after the Arab oil embargo to provide the US with an emergency buffer against severe supply disruptions. The reserve, which in theory can hold more than 700 million barrels of crude oil in underground salt caverns along the Gulf Coast in Texas and Louisiana, has been tapped heavily in recent years.

The report, made public by the Government Accountability Office (GAO) earlier this week, found that as of December 2025, SPR's effective oil withdrawal capability had fallen to about 61% of original design capacity, while refill capability stood at 56%. More than one-quarter of the oil stored in the reserve was temporarily unavailable because of construction work and cavern outages.

The emergency stockpile has supplied more than 500 million barrels of crude oil since 1985, with nearly 70% of that volume drawn down between 2014 and 2025. A 180-million-barrel emergency withdrawal in 2022 following the escalation of the Ukraine conflict put the SPR’s capabilities to the test.

The watchdog warned that the nation’s emergency crude stockpile may not be able to meet future drawdown directives if significant upgrades are not made.

Much of the SPR's infrastructure is more than four decades old. Many critical components, including pumps, pipelines and valves installed when the reserve was built in the late 1970s and 1980s, are now operating well beyond their intended service life.

It also said the Department of Energy has not updated its long-term strategy for the SPR since 2016, despite major upheavals in global energy markets and repeated large-scale emergency drawdowns.

The GAO pointed to the decade-long, $1.4 billion Life Extension Phase 2 project to modernize the SPR's aging facilities, which has been plagued by delays and scope reductions. The current maintenance backlog alone would cost around $230 million to address, according to DOE estimates from December 2025.

US President Donald Trump reported more than $1.4 billion in income from cryptocurrency ventures last year, according to his latest annual financial disclosure, which shows the scale of his family’s move into digital assets since his return to the White House.

The 927-page filing, released on Tuesday by the US Office of Government Ethics, shows that Trump’s crypto-related earnings far outpaced much of his traditional real estate and resort income.

The largest single item was $635 million in royalties linked to a licensing agreement with Celebration Coins. The $TRUMP meme token was launched shortly before his inauguration in January 2025 and briefly surged to a multibillion-dollar market value before collapsing. It is now down by more than 95% from its peak, leaving many late investors with steep losses even as Trump reported hundreds of millions of dollars in related income.

The president also reported holding “more than $50 million” in bitcoin and “between $5 million and $25 million” in ethereum, but the disclosure gives only a partial view of Trump’s wealth. US ethics rules allow officials to report asset values in broad ranges, with the highest category listed only as ‘over $50 million’, making it impossible to calculate the full value of his holdings.

The crypto haul nevertheless appears to have become the dominant source of Trump’s income. By comparison, he reported $121 million from Trump National Doral, up from $110 million a year earlier, and $77 million from Mar-a-Lago, up from $56 million.

The White House rejected conflict-of-interest concerns, with spokeswoman Anna Kelly saying Trump “proudly made the United States the crypto capital of the world” through executive actions and legislation supporting the industry. She insisted that neither Trump nor his family have engaged in conflicts of interest, calling the claims a “tired, false narrative.”

The filing also shows that First Lady Melania Trump earned millions from licensing agreements, including more than $10 million tied to her self-titled documentary and more than $6 million from NFT and collectible sales.

The European Union risks entering the coming heating season with its lowest gas reserves in 15 years, potentially driving up energy costs for households and businesses, the Financial Times reported on Monday, citing projections by consultancy Wood Mackenzie.

The bloc has faced soaring energy prices since scaling back Russian oil and gas imports following the escalation of the Ukraine conflict four years ago. The shift away from relatively cheap Russian pipeline gas has left Europe increasingly reliant on more expensive liquefied natural gas (LNG), particularly from the US.

EU gas storage sites are expected to be just 76% full by the end of the April-to-October restocking season, the lowest pre-winter level since 2011, according to Wood Mackenzie.

The outlook is further clouded by the EU’s planned ban on Russian LNG from January 1, which would eliminate supplies that currently account for around 14% of the bloc’s imports of the super-chilled fuel. Additional strain has come from disruptions to LNG shipments through the Strait of Hormuz during the recent US-Iran conflict, as well as lower production in Qatar and the UAE, the FT said.

EU storage facilities were only 28% full at the start of the refilling season after an unusually cold winter, well below the seasonal average, the FT noted. They have since reached an average fill level of 48%, according to industry trackers.

Earlier this year, Politico reported that roughly a quarter of the EU’s gas imports came from the US. The outlet cited diplomats warning that Washington could use Europe’s growing dependence on American fuel to advance its foreign policy goals. Last week, the US warned it could redirect LNG exports elsewhere unless Brussels softens planned methane emissions rules.

Volkswagen is considering closing four German factories and cutting up to 100,000 jobs, Reuters has reported. Amid soaring energy costs and competition from China, the company’s profits have plummeted in recent years.

Should the cuts go ahead, Volkswagen will close factories in Hanover, Zwickau, and Emden, as well as an Audi plant in Neckarsulm, Reuters reported on Friday, citing sources within the company. These closures would result in the loss of 45,000 jobs, on top of the 50,000 layoffs agreed upon with trade unions in 2024.

Volkswagen executives will discuss the cuts at a meeting next month. According to a separate report by Germany’s Manager Magazin, the company is also weighing a 15% cut in investment over the next five years.

A spokesperson for the world’s second-largest carmaker said that they would not comment on “confidential documents,” but admitted that “the entire group, including its brands and subsidiaries, must undergo far-reaching change.”

Volkswagen already closed one automobile assembly plant, in Dresden, last December – the first time it had closed a factory in Germany in its nine-decade history. BASF, Bosch, Continental, and more than a dozen other German manufacturers have closed one or more facilities over the last four years.

With energy costs eating into Volkswagen’s profits, the company’s electric vehicles are no longer able to compete with offerings from its Chinese rivals. Once the dominant automaker in China, Volkswagen now sells fewer vehicles there than domestic brands BYD and Geely. In Europe, BYD and fellow Chinese brands Chery, SAIC, and Leapmotor have all doubled their market share over the last year.

Back in Germany, Volkswagen’s internal union and the IG Metall metalworkers’ union have vowed to resist the job cuts. “Should such plans go ahead, we would do everything in our power to prevent them,” the organizations said in a joint statement on Friday.

The US has warned the EU that American liquefied natural gas (LNG) could be diverted elsewhere unless Brussels eases planned methane emissions regulations. The move signals a growing willingness by Washington to leverage its dominant position in Europe’s energy market.

The EU replaced much of its Russian pipeline gas with American LNG following the escalation of the Ukraine conflict in 2022 and the imposition of sanctions on Moscow. The shift made the US the bloc’s largest external gas supplier and was hailed by its leaders as a step toward greater energy security.

Europe’s energy crisis has worsened since then, with gas and electricity prices soaring to record highs.

Speaking to Bloomberg on Thursday, US Energy Secretary Chris Wright said American exports would “flow somewhere else” if the EU refused to change the rules, which are due to take effect in 2027.

“Without a meaningful reform of that rule, it is going to cause serious pain into Europe and that’s unnecessary,” Wright said.

The US has joined Qatar, Algeria and Nigeria in urging the EU to amend or delay the legislation. Exporters argue there is no practical way to comply because America’s sprawling network of gas fields, pipelines and processing facilities makes it difficult to measure methane emissions for individual LNG cargoes. They also say uncertainty over potential penalties is already discouraging long-term contracts with European buyers.

EU Energy Commissioner Dan Jorgensen rejected calls to weaken the legislation, insisting the bloc would not compromise its environmental standards despite pressure from suppliers. The bloc’s energy ministers were due to discuss the issue at a meeting in Luxembourg on Friday.

The standoff highlights a striking reversal in the EU’s energy relationship with its main supplier. Before abandoning most Russian gas imports, Western governments frequently accused Moscow of using energy exports as a geopolitical tool, a charge the Kremlin consistently denied. Now, with the bloc heavily dependent on American LNG, Washington is openly linking future gas supplies to changes in policy.

Hofbrauhaus Wolters, one of Germany’s oldest breweries, dating back to 1627, has filed for bankruptcy, citing soaring operating costs and a sharp decline in beer consumption.

Germany’s economy has faced mounting pressure from high energy prices since Berlin began phasing out Russian oil and gas imports after the Ukraine conflict escalated in 2022. The strain has been compounded by the recent spike in crude prices triggered by the US-Israeli war on Iran.

Under self-administration insolvency proceedings, the brewery will remain under its current management while a court-appointed administrator oversees its restructuring. Employees will retain their jobs as Hofbrauhaus Wolters seeks to reinvent itself as a producer of non-alcoholic beverages rather than a traditional brewer.

Alongside a nationwide slump in beer consumption, which fell to a record low in 2025, the company cited rapidly rising operating costs as a key reason for its insolvency. According to the Braunschweiger Zeitung, skyrocketing energy prices have placed particular pressure on German breweries.

At the same time, Berlin continues to devote substantial resources to arming Ukraine as well as its own military buildup. Since 2022, Germany has committed to providing more than €96 billion ($109 billion) in military support to Kiev, while launching a €100 billion rearmament drive of its own.

Last year, Germany’s central bank warned that a record budget deficit was looming, citing increased military spending as one of the main drivers.

China’s LineShine has been named the world’s fastest supercomputer at the International Supercomputing Conference in Hamburg, Germany, surpassing the US-built El Capitan. It marks the first time since 2017 that a Chinese machine has topped the TOP500 ranking of the world’s most powerful supercomputers.

Supercomputers are used for complex scientific tasks ranging from climate modeling and human brain simulations to cryptography and advanced research.

According to rankings released on Tuesday, LineShine, developed by the National Supercomputing Center in Shenzhen, can perform nearly 2.2 quintillion (billion billion) calculations per second. It outperformed Lawrence Livermore National Laboratory’s El Capitan by more than 20% in a key benchmark. The American system had held the top spot in the twice-yearly TOP500 rankings since November 2024.

LineShine also stands out for relying entirely on standard central processing units (CPU) rather than the graphics processing units (GPU) used by most leading supercomputers.

GPUs, prized for handling large numbers of simultaneous calculations, are critical to advanced AI systems and have become a focal point in the technological rivalry between the US and China. Seeking to slow China’s progress, the administration of US President Donald Trump has imposed restrictions on exports of advanced chips.

“China can adapt to develop its own version of technology as good as – or maybe even better than – existing technology, despite US export controls,” Dongarra said.