Executive Summary
The Strait of Hormuz standoff deepened this week as ship traffic fell to eight vessels on Tuesday—roughly 90 percent below pre-war levels—while the International Energy Agency projected a global oil supply deficit of 1.8 million barrels per day in the third quarter, the deepest since late 2021. Ukraine struck the Russian port of Novorossiysk overnight, halting operations at three of Russia’s largest grain terminals and sending wheat futures up 4 percent in Chicago. In Colombia, the death toll from Monday’s 7.4-magnitude earthquake reached 265 with nearly 500 still missing as rescue crews raced against the 72-hour survival window. President Trump confirmed he was secretly moved from Air Force One to a smaller military aircraft while departing Turkey last month after intelligence warned of an Iranian plot to target his plane, a disclosure that prompted Senate Democratic Leader Chuck Schumer to demand an immediate congressional briefing.
Geopolitics & Security
Hormuz Traffic Plunges to Near Three-Month Low as U.S. and Iran Trade Control Claims
Ship traffic through the Strait of Hormuz fell to eight vessels on Tuesday, the lowest level since August 5 and roughly 90 percent below the pre-war average of 130 ships per day, according to data from the trade intelligence firm Kpler. The collapse came as President Trump asserted on Truth Social that “The U.S.A. has total control over the Strait of Hormuz,” describing the naval blockade as a “WALL OF STEEL,” while Iran’s Persian Strait Gulf Authority responded that the waterway “remains blocked and will not be reopened until Iran’s conditions are accepted.”
The standoff is forcing major oil producers to reroute exports. Saudi Arabia has more than doubled shipments through Egypt’s Sidi Kerir terminal to 2.3 million barrels per day in August, using the Sumed pipeline to bypass the Red Sea, where Houthi attacks have cut Saudi exports from Yanbu by nearly 90 percent. Matt Smith, an analyst at Kpler, described the shift as “a distinct change in strategy.”
The fiscal impact is most acute in Iraq, where 85 to 90 percent of the national budget depends on oil exports. Baghdad is struggling to pay public sector salaries, causing delays of more than 10 days for doctors and teachers and sparking small protests at universities and the Ministry of Electricity. The collapse of the June 17 interim deal—which had briefly raised ship crossings to 60 per day—leaves no clear path to reopening the strait, and a senior IRGC adviser, Mohammad Reza Naqdi, signaled Iran may pursue a strategy of attrition until Trump leaves office.
Ukraine Strikes Novorossiysk, Halting Russian Grain Terminals
Ukraine launched a massive overnight drone and missile strike on the Russian port city of Novorossiysk, damaging grain export terminals and hitting the last major Russian naval base on the Black Sea. The attack, which Ukrainian President Volodymyr Zelensky called a “unique operation,” killed three people, including an eight-year-old child, and injured 24 others. Three of Russia’s largest grain terminals—operated by United Grain, Demetra, and KSK—suspended operations due to structural damage, including a collapsed loading gallery and damaged silos.
Russia’s agriculture ministry said it was redirecting cargo flows to Baltic and Caspian ports, while global wheat futures jumped as much as 4 percent in Chicago, the biggest intraday advance in three weeks. The port serves as the primary hub for Russia’s Black Sea Fleet after it retreated from Sevastopol in Crimea, and it is also a critical export point for Russian grain, which accounts for more than a quarter of global wheat exports.
The attack coincided with Russia’s use of North Korean ballistic missiles against Zaporizhzhia, exploiting Ukraine’s shortage of Patriot interceptors. Zelensky also suggested Pyongyang could send up to 50,000 additional troops to support Moscow. Russian foreign ministry spokeswoman Maria Zakharova accused Kyiv of inciting “chaos in the global food market,” while Zelensky emphasized that “the occupying fleet and all the infrastructure that supports it will not be safe.”
Pentagon Review Finds U.S. Strikes Killed 153 Civilians in Yemen
A Pentagon review has concluded that U.S. airstrikes against Houthi militants in Yemen in April 2025 killed 153 civilians and injured 243 others, according to an unclassified assessment submitted to Congress. The review, part of the Pentagon’s annual civilian casualty report, found that three strikes “more likely than not” resulted in civilian harm. The deadliest attack, at the Ras Isa fuel port on April 17, killed 80 people and injured 171, while strikes on April 6 in Sanaa killed 5 and injured 25, and an April 28 attack near Saada killed 47 and injured 68.
The findings mark a sharp increase from 2024, when the Pentagon assessed two civilian deaths and two injuries from U.S. operations. Human Rights Watch and Amnesty International have called for investigations into the strikes as potential war crimes. The Pentagon has 15 additional incidents related to Houthi airstrikes under review.
The review provides official confirmation of significant civilian casualties from U.S. military operations under the Trump administration, intensifying congressional scrutiny and raising legal and reputational questions about the conduct of the campaign against the Houthis. Congressional hearings are expected in the coming weeks, along with public pressure on the Pentagon to explain the civilian toll and provide condolence payments.
Trump Confirms Secret Plane Switch Over Iran Threat
President Trump confirmed on Tuesday that he was secretly moved from Air Force One to a smaller military aircraft while departing Turkey last month, following what he described as instructions from the Secret Service and military after being warned of a “greater risk” on his original plane. The acknowledgment came after The Washington Post first reported that Trump was transferred via an airport catering truck to an Air Force C-32A, which flew him to Britain, while senior administration officials and journalists remained aboard the decoy aircraft.
The Wall Street Journal reported that Israeli intelligence warned of an Iranian plot to target Trump’s aircraft with shoulder-fired missiles. Senate Democratic Leader Chuck Schumer immediately demanded a full congressional briefing, calling the operation “unacceptable” and accusing the administration of keeping lawmakers “in the dark.” Schumer also called for Congress to reassert its authority and end the six-month conflict with Iran, referencing bipartisan war powers resolutions.
Defense Secretary Pete Hegseth publicly stated that “Iran tried to kill President Trump, and President Trump got the last laugh,” citing the killing of an Iranian assassination unit leader. Former national security adviser H.R. McMaster said “it seems like the system worked,” endorsing the Secret Service’s response. The White House has provided few details about the specific threat.
North Korea Fires Missile Ahead of U.S.-South Korea Drills
North Korea launched a ballistic missile from the Wonsan area into the waters off its east coast on Wednesday at approximately 6 a.m. local time, according to South Korea’s Joint Chiefs of Staff. The missile flew more than 700 kilometers before landing in the Sea of Japan, outside Japan’s exclusive economic zone. This was the second such launch in less than a week, following a short-range ballistic missile test on August 6.
The launch came just two days after Seoul and Washington announced their annual Ulchi Freedom Shield military exercises, scheduled to begin on August 17 and run for 11 days, involving 18,000 South Korean troops. South Korea’s National Security Council held an emergency meeting and condemned the launch as a provocation, while Japan’s Defence Minister Shinjiro Koizumi called it a threat to regional peace.
Analysts suggest the missile test may be linked to upgraded weapons exports to Russia amid the Ukraine war. The timing, just before joint drills, underscores Pyongyang’s pattern of responding to perceived threats, while the potential connection to Russian weapons exports adds a geopolitical dimension that could affect regional and global security dynamics.
Economy & Markets
IEA and EIA Warn of Prolonged Oil Supply Losses
The International Energy Agency and the U.S. Energy Information Administration both released forecasts this week showing that the closure of the Strait of Hormuz will cause deeper and longer-lasting disruptions to global oil markets than previously expected. The IEA now projects a global supply deficit of 1.8 million barrels per day in the third quarter of 2026, the deepest since late 2021, and has slashed its 2026 supply forecast to a decline of 4.3 million barrels per day.
The EIA, in its latest Short-Term Energy Outlook, raised its third-quarter Brent forecast by $11 to $85 per barrel, though Brent was already trading near $89, and estimated that 600,000 barrels per day of Middle East production will remain offline through the end of 2027. Global oil demand is now expected to contract by 1.6 million barrels per day in 2026, a 510,000 barrel per day deeper cut than July’s forecast.
U.S. crude stockpiles fell below 300 million barrels, the lowest in over four decades. Middle East production remained 8.3 million barrels per day below pre-war levels in July, with Hormuz flows falling to 12 million barrels per day. The IMF has already cut global growth forecasts to 3 percent.
Yen Slide Persists Despite U.S.-Japan Intervention
The Japanese yen has weakened to over 159 per dollar, erasing roughly half of the gains from a historic U.S.-Japan intervention in late July, according to CNBC. The joint action, the first since 1998, briefly strengthened the currency from near 164 to 155, but fundamental pressures—chiefly the yield gap between Japan and the U.S.—are reasserting themselves. Goldman Sachs estimates Tokyo deployed as much as $85 billion in the first two days of the operation, near record size, and argues Japan retains ample capacity for further intervention.
Jesper Koll, expert director at Monex Group, said intervention “has scared markets, but has not stopped the laws of finance,” noting that carry trades will re-emerge as long as Japanese borrowing costs remain below overseas returns. Higher Treasury yields and elevated oil prices, which hit energy-importing Japan particularly hard, are restoring macro forces favoring the dollar.
Japan’s producer price index rose 7.2 percent year-on-year in July, slightly below the 7.4 percent expected and down from a revised 7.3 percent in June. Despite high wholesale inflation, consumer inflation remains subdued—headline at 1.9 percent and core at 1.6 percent in June—partly due to government subsidies from the Takaichi administration. The Bank of Japan’s September policy meeting is now the focal point for whether the yen’s reprieve holds.
Science & Innovation
WHO Warns DR Congo Ebola Outbreak May Become Deadliest
The World Health Organization warned on Wednesday that the Ebola outbreak in the Democratic Republic of the Congo is on track to become the deadliest on record, surpassing the 2014-2016 West Africa epidemic that killed at least 11,000 people. WHO Director-General Tedros Adhanom Ghebreyesus said that at its current pace, the 2026 outbreak would eclipse that toll. The outbreak, declared on May 15, has already recorded more than 4,300 cases and over 2,000 deaths, making it the fastest-moving Ebola outbreak ever documented.
The outbreak is caused by the rare Bundibugyo strain of Ebola, for which no approved vaccine or therapeutic drugs exist. Containment efforts are severely hampered by ongoing conflict near the borders with South Sudan, Uganda, and Rwanda, as well as weak infrastructure, under-resourced clinics, misinformation, and strikes by health workers over unpaid wages. WHO Africa director Dr. Mohamed Janabi said health workers are reaching only about 30 percent of cases, noting, “We are chasing the virus, the virus is ahead of us.”
Genetic sequencing later revealed the virus had been circulating since February, initially misdiagnosed as malaria or typhoid. WHO’s moderate projection has the outbreak peaking within six months, while a more severe scenario could stretch it to nine to twelve months.
Regional Developments
Colombia Quake Toll Hits 265 as Rescue Efforts Enter Final Phase
The death toll from Monday’s 7.4-magnitude earthquake in western Colombia has risen to at least 265, with nearly 500 people still missing and more than 3,500 wounded, according to President Abelardo de la Espriella. Rescue crews are racing against the 72-hour mark, the period when survivors are most likely to be found alive, with the hardest-hit cities of Cali, Pereira, Manizales and Quibdo still picking through collapsed buildings. Cali Mayor Alejandro Eder said the next 20 hours are the most critical, though he acknowledged that survivors could still be found afterward.
The quake, the strongest to hit Colombia this century, has destroyed more than 9,550 homes and affected over 25,800 families, according to official figures. Dramatic rescues include a baby pulled alive from rubble in Cali after 48 hours and a woman rescued after 36 hours in Pereira. President de la Espriella has declared an economic emergency and promised an emergency fund for rebuilding.
The disaster has struck just days after a new president took office, testing his government’s disaster response capabilities. The discrepancy between official and civilian missing-person counts—civilian databases suggest more than 4,100 missing—raises concerns about the accuracy of the government’s assessment.
Midwest Storms Kill 3, Cut Power to 991,000
A powerful storm system swept across the U.S. Midwest on Tuesday, leaving at least three people dead and cutting power to nearly 1 million customers across Illinois, Indiana, Ohio, and Kentucky. The National Weather Service confirmed the system qualified as a derecho, with a wind gust of 99 mph recorded in Gary, Indiana, and numerous other locations reporting winds of 80 mph or more.
In Indiana, a four-year-old child died after a tree fell on a home in Geneva Township, and a person died in a suspected weather-related house explosion in Portage. Ohio Governor Mike DeWine reported one death in Roseville, where flooding obstructed first responders, and declared a state of emergency in Perry and Muskingum counties.
Power outages peaked at more than 991,000 customers across four states, with over 500,000 in the Chicago area alone. All flights were temporarily halted at Chicago’s two major airports; 45 percent of O’Hare flights were delayed and 10 percent canceled. At least two suspected tornadoes tore through suburbs south of Chicago and northwest Indiana, causing structural damage.
Federal Judge Blocks Trump Mail-In Voting Order
A federal judge in Massachusetts on Tuesday blocked the U.S. Postal Service from implementing Section 3 of President Donald Trump’s executive order on mail-in voting, which would have barred the agency from delivering ballots to voters not on government-compiled citizenship lists. The preliminary injunction, issued by U.S. District Judge Indira Talwani, applies to the November midterm elections and follows a June ruling that blocked other parts of the order in 23 states and Washington, D.C.
The Trump administration, via Solicitor General D. John Sauer, asked the Supreme Court to intervene promptly, warning that delays would “run out the clock” on implementation. The Supreme Court is expected to rule soon on the administration’s appeal, potentially deciding the fate of the mail-in voting order for the midterms.
The ruling and ongoing litigation determine whether the Trump administration can impose new restrictions on mail-in voting before the November elections, affecting millions of voters. States and election officials are preparing for potential last-minute changes to mail-in ballot procedures.
From the Timeline
Grok 4.6 Launch Sparks Frontier Model Debate
The release of Grok 4.6 dominated AI discussion this week, with @elonmusk touting it as “smart, fast & amazing bang for buck” and claiming it is “objectively #1 when considering intelligence, speed & cost.” @EMostaque endorsed the release, calling GDPVal “probably the most important benchmark” and congratulating the SpaceXAI team on topping it at a competitive price. However, @tobi reported a strange anomaly: “I have no idea why but Grok-4.6 just totally freaked out doing some maintenance tasks when it saw my low github id,” suggesting the model may have unexpected behavioral quirks despite its benchmark performance. The pricing strategy drew attention too, with @EMostaque noting that SuperGrok Heavy now bundles a free X Premium Plus membership, though the onboarding process for claiming it is “not very intuitive.”
Linux’s Open-Source Advantage in the Agent Era
@dhh made a bold prediction that “Linux adoption among programmers is about to go parabolic,” arguing that AI agents can now recreate any missing app and that “nobody is going to be waiting for Apple to sign their shit.” He also showcased the new native Codex app running on his Omarchy Linux distribution, praising OpenAI’s work. @ClementDelangue reinforced the local AI trend from a different angle, announcing that Transformers.js has crossed 10 million monthly downloads—“close to 10x from just six months ago”—and arguing that local AI is essential “at a time of compute shortage & increased cyber-attack risks.”
The Agentic Economy Takes Shape
@brian_armstrong amplified a provocative thesis: that the first one-person billion-dollar company will be a crypto prop trading firm, because “AI takes care of the trading. Crypto takes care of the rest.” He followed up by announcing that Coinbase Business now accepts AI agents as customers with stablecoin payments. @garrytan contributed his own agentic development, revealing that GBrain v0.45.6.0 added 17 new “brain skills” hardened through his personal OpenClaw agent trained on “hundreds of thousands of markdown files.” The throughline: infrastructure for autonomous agents is moving from speculation to shipping product.
Founders Grapple with AI Uncertainty and Longevity
@paulg acknowledged that many founders he talks to are worried about AI—“So am I frankly”—but argued they’re “better off than anyone else” because a small, fast-moving company is the safest place when the world gets turned upside down. He also shared advice from a founder who’s been at it since 2011: “The biggest test is your own psychology. Can you keep going despite all the obstacles you face?” @ID_AA_Carmack offered a more sobering perspective on resource allocation in research, advising researchers to “visualize the stack of $100 bills being set on fire with each run and weigh it against the knowledge sought.”
Wisconsin Primary Exposes Polling Failures
The Wisconsin Democratic primary result—where Crowley narrowly beat heavily favored Hong—triggered sharp reactions. @chamath asked bluntly: “Were the polls actually completely off or did a bunch of mainstream media decide to lie and try to push Wisconsin towards socialism?” @Noahpinion offered a sardonic congratulations to “Mr. David AnyoneButHong,” while @garrytan simply endorsed the winner: “Crowley is smart. Listen to Crowley.” The polling miss—with margins of +18 to +29 for Hong in final polls—has become a flashpoint for broader distrust of media and polling institutions.
California Governance and MAGA’s Decline
@garrytan pointed to a damning investigation of LA mayoral hopeful Nithya Raman’s homelessness record, arguing “California can be 10x better without any asset seizure just by having the state stop lighting money on fire.” The report detailed $358M routed through an ineffective agency and one $62.6M program that housed just three people. On the national stage, @Noahpinion declared “MAGA is dying because it built nothing,” calling it “a blast of incoherent online rage” rather than “a civilizational project.” @wolfejosh pushed back implicitly by amplifying a poll showing Republican Bruce Blakeman could unseat New York Governor Hochul, insisting “not ‘could’. WILL.”
Google Zero and the Publisher Revolt
@zerohedge surfaced a Goldman Sachs note on the “Google Zero” moment, reporting that some publications are seeing traffic drops of more than 40% as Google Search stops sending visitors to third-party sites. Major outlets including USA Today, Reddit, Politico, and Reuters are “openly considering or preparing to restrict Google’s access,” while Cloudflare plans to block multi-purpose crawlers by default from mid-September. The note concludes that “the old model in which publishers had no real alternative to Google’s rules is cracking.” This represents a structural shift in the web’s power dynamics, with publishers finally gaining leverage as AI training data becomes a negotiating chip.