Hello, this is Anniek Bao writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

It was a weekend of stalled diplomacy, and Europe wakes up to the bill — a stalemate priced in oil.

Iran’s foreign minister ruled out any restart of talks with Washington while the U.S. blockade — now 55 redirected ships and counting — stays in place. Israel rejected a Gaza plan Hamas had accepted, refusing to withdraw military until Hamas is fully disarmed.

For a continent importing the bulk of its oil and gas, the returning war premium on crude is a tax on households and industry.

German inflation figures and U.K. GDP due this week will show just how deeply months of elevated energy costs have seeped into prices — and how much growth they have already taken off the table.

Iranian Foreign Minister Abbas Araghchi said Tehran is not in direct negotiations with the U.S. to end the war and reopen the Strait of Hormuz, saying that “messages are being exchanged through intermediaries.”

In a Sunday interview with Axios, U.S. President Donald Trump said that Washington is “low keying it” in negotiations with Iran. “We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact that they have no money,” the president said.

The U.S. military redirected 20 more commercial vessels away from Iranian ports last week, bringing the tally to 55 as of Sunday, up from 35 on Aug. 2 — with two ships disabled and two boarded, according to U.S. Central Command.

Meanwhile, Israeli Prime Minister Benjamin ⁠Netanyahu restated his rejection of Trump’s latest Gaza plan in televised remarks to his right-wing government on Sunday, even as Israel’s military has effectively halted attacks in the territory under pressure from ​Trump.

Trump announced last month that there had been a breakthrough in his plan to end the war, with Israeli forces withdrawing as Hamas disarms and an International Stabilization Force working with a new Palestinian police force to secure the enclave.

“Israel does not accept the 15-point document,” Netanyahu said at the start of a meeting ​with his cabinet ministers, saying the Israeli military will not withdraw until Hamas is disarmed.

Axios’ Barak Ravid reported that a senior U.S. official said the White House is “not bothered” by Netanyahu’s statement and sees it as part of the election season in Israel.

Brent crude futures jumped nearly 0.2% to $83.7 a barrel, while WTI futures edged up slightly to $78.21 per barrel, as traders moved to add back some risk premium as optimism over a Hormuz agreement dimmed

Asian equities traded broadly higher, with Japan’s Nikkei 225 up 2%. S&P 500 futures were flat while Nasdaq-100 futures added 0.4%. Dow Jones Industrial Average futures shed 24 points, or 0.04%.

Western Europe just logged its hottest June-July on record. The Copernicus Climate Change Service put the two-month average at 21.62°C, beating the 2022 benchmark.

Prolonged hot and dry conditions in western Europe led to the spread and intensification of extreme wildfires in July. The month also saw the highest sea surface temperature ever recorded for July across the extra-polar oceans, partly fuelled by developing El Niño conditions in the equatorial Pacific, according to the agency.

The extreme heat compounds an expensive summer for Europe, where the war has already pushed up energy costs.

Germany’s final July inflation reading, due Wednesday, is expected to confirm the preliminary estimate of 2.8%, ticking up from 2.6% in May and 2.3% in June, according to economists polled by Reuters.

The U.K.’s second-quarter and June GDP growth, due Thursday, are expected to show the economy still expanding, though more slowly than before.

Economists estimate the economy to have expanded 1.1% in the second quarter from a year earlier, but just 0.4% quarter-on-quarter — decelerating from 0.6% growth seen in the first quarter. For June alone, the U.K. economy is expected to have grown 0.8% from a year earlier, slower than May’s 1.3% growth.

— Anniek Bao

Inside the startup drone maker powering Ukraine’s deep-strike campaign

The CEO of Ukraine’s leading arms company says Kyiv has “learned the hard way” that military strength is an essential precursor to diplomacy, describing deep strikes into Russian territory as a core tenet of the country’s pressure campaign.

Missile and drone maker Fire Point, which says it currently facilitates more than 60% of Ukraine’s “long-range sanctions,” has scaled exponentially since being founded in response to Russia’s full-scale invasion in 2022.

The defense-tech startup produced around 200 drones that year, a feat CEO Iryna Terekh described as a “huge achievement.”

Since then, the Kyiv-headquartered startup has swelled from three founding members to more than 7,000 employees and Terekh says it “looks realistic” to expect the team to produce more than 100,000 drones by year-end.

— Sam Meredith 

Hello, this is Anniek Bao writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

Markets ended last week convinced that a Strait of Hormuz deal was nearing, while Iran spent the weekend insisting that it is not in the room negotiating with the U.S.

Trump told Axios that Washington is “low keying it” and “only semi-negotiating” with Tehran. Iran’s foreign minister says there are no direct talks, aside from messages passed through intermediaries. Oman is closing in on an agreement around transit routes, but Tehran has been careful to make it clear that a shipping arrangement is not the same thing as reopening the waterway.

Traders now price a roughly 44% chance the Fed raises rates in September, down from 67% a week earlier, per CME’s FedWatch tool. But the CPI print due this week, or a collapse of a Hormuz deal, could push those odds right back up.

Iranian foreign minister Abbas Araghchi said Tehran is not in direct negotiations with the U.S. to end the war and reopen the Strait of Hormuz, saying that “messages are being exchanged through intermediaries.”

In a Sunday interview with Axios, U.S. President Donald Trump said that Washington is “low keying it” in negotiations with Iran.

“We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact that they have no money,” the president said. “It will work out. It always works out. It’s like a chess game.”

U.S. stock futures moved to price in the growing doubts over progress to reach a deal that reopens the Hormuz, with S&P 500 futures slipping about 0.2%, Nasdaq-100 futures holding flat, and Dow Jones Industrial Average futures losing 0.3%.

Investors will look for the consumer and producer price index readings due out this week for the latest insights on inflation.

Meanwhile, Israeli Prime Minister Benjamin ⁠Netanyahu restated his rejection of Trump’s latest Gaza plan in televised remarks to his right-wing government on Sunday, even as Israel’s military has effectively halted attacks in the territory under pressure from ​Trump.

Trump announced last month that there had been a breakthrough in his plan to end the war, with Israeli forces withdrawing as Hamas disarms and an International Stabilization Force working with a new Palestinian police force to secure the enclave.

“Israel does not accept the 15-point document,” Netanyahu said at the start of a meeting ​with cabinet ministers, saying the Israeli military will not withdraw until Hamas is disarmed.

Axios’ Barak Ravid said a senior US official told him the White House is not bothered by Netanyahu’s statement and sees it as part of the election season in Israel.

Berkshire Hathaway’s CEO Greg Abel, who took over from Buffett at the start of the year, appears determined to put the record cash hoard amassed by Warren Buffett to work on buybacks and stock purchases.

The conglomerate’s operating earnings climbed 16% to $12.98 billion in the second quarter, and it became a net buyer of equities with nearly $20 billion in net purchases.

Buybacks accelerated to roughly $4.5 billion in the second quarter, compared to just $235 million in the previous quarter, while the cash pile fell to $365.5 billion from a record $397.4 billion.

A parliamentary panel last Wednesday demanded an apology from Mark Zuckerberg within three days over the brief restriction of a post by Prime Minister Narendra Modi on Meta Platform‘s Facebook.

Failure to do so could result in revoking Meta’s safe harbor immunity, which would make Meta liable for the user-generated content on its platform.

Legal experts told CNBC it would be almost impossible for Meta to operate in India without that protection, though withdrawing it would require amending existing law.

China’s consumer inflation rose 0.5% year on year in July, decelerating from June’s 1.0% and missing the forecast of 0.8% — the slowest reading since January, while factory-gate producer prices jumped 3.5%, below the 3.8% economists expected.

Typhoon Dolphin, the most powerful cyclone to hit China this year, made landfall in the eastern coastal province of Zhejiang on Sunday, with more than one million people evacuated.

Authorities had moved offshore workers to safety, ordered vessels back to port and increased checks at reservoirs, mountain streams, landslide-prone areas, construction sites and tourist locations.

— Anniek Bao

How a small Israeli startup was linked to rogue AI hacks at OpenAI, Anthropic and Meta

Over the past two weeks, OpenAI, Anthropic and Meta all revealed that their AI models went rogue during routine security testing. In explaining what happened, the companies each mentioned the same small Israeli startup: Irregular.

Founded three years ago and based in Tel Aviv, Irregular is a niche player in artificial intelligence, backed with $80 million from Sequoia and Redpoint Ventures and valued last year at $450 million. Its technology serves as a sort of cybersecurity test bed for AI models.

With the leading models becoming ever more powerful, their ability to act in malicious ways is turning into a major threat for corporations and governments, especially as the risk involves hacking into critical computer systems and infrastructure. The recent exploits at OpenAI, Anthropic and Meta all involved their AI models accessing websites that should have been off-limits as part of the cybersecurity testing.

— Jonathan Vanian

Firefighters extinguished a blaze at a refinery belonging to Saudi Arabian oil giant Aramco early Sunday, the country’s government said. Iran-backed Houthi rebels in Yemen reportedly claimed responsibility for attacking the facility.

“The competent authorities are completing the necessary procedures to deal with the incident” at the Saudi Aramco refinery in Jazan, Saudi Arabia’s Ministry of Energy said in a statement on X, adding that no one was injured. The statement did not say what caused the fire.

Iran-backed Houthis reportedly said they carried out a drone strike on the facility.

“Yemen’s Armed Forces said they hit Saudi Arabia’s Aramco refinery in Jizan on Sunday, describing the drone strike as precise and carried out in response to Saudi drone violations of Yemeni airspace,” Iranian state-backed news agency Mehr said in a post on X.

CNBC has not independently verified the claim. The Houthis have claimed responsibility for a number of attacks on the Saudi Aramco facility since the start of the war.

In Tehran, Iranian Foreign Minister Abbas Araghchi said it is not currently in direct talks with the U.S.

A brief hiatus in fighting between the U.S. and Iran after a June 17 memorandum of understanding was followed by weeks of Iranian drone and missile attacks on shipping in the Strait of Hormuz and neighboring Gulf countries, and counterstrikes by the U.S. on Iranian targets.

Araghchi said Sunday that his country is not engaging in talks with the U.S., but added that “messages are being exchanged through intermediaries,” according to news agency Mehr.

Oman has been a key interlocutor, especially on the thorny issue of the Strait of Hormuz, a crucial gateway for about a fifth of the world’s energy supplies before the U.S. and Israel began attacking Iran on Feb. 28.

“Talks with Oman do not mean the Strait of Hormuz will be reopened. An agreement may be reached, but reopening the strait depends on other conditions conveyed through intermediaries,” Araghchi was quoted as saying.

The foreign minister said a day earlier that Iran and Oman, which border the waterway, were close to reaching an agreement on navigation, “specifically the determination of a transit route.”

U.S. Treasury Secretary Scott Bessent told CNBC on Tuesday that an agreement to open Hormuz with freedom of movement could come as soon as Wednesday. President Donald Trump and Secretary of State Marco Rubio had also indicated that an agreement was imminent.

On Saturday, Iran laid out sweeping demands to the U.S. for reopening the Strait of Hormuz, according to media reports.

The Secretary of Iran’s Supreme National Security Council, Mohammad Bagher Zolghadr, said Saturday that reopening the strait would require Washington to lift its naval blockade and sanctions, withdraw U.S. military forces from the region, pay war reparations, and release frozen Iranian assets.

The council also called for an end to U.S. attacks on Iran’s regional allies and to threats against Iran, according to the reports.

CNBC has not independently verified the demands. The White House did not immediately respond to a request for comment.

According to the interim deal signed in June between the U.S and Iran, a schedule to end sanctions and a compensation plan would be part of the final deal, as would negotiations to address frozen assets. The end of a 60-day period agreed to negotiate a final deal will come in just over a week.

Iran and Oman are working on an agreement to define transit routes through the strait, according to media reports. Inbound traffic would transit Iranian waters while outbound traffic would go through Omani waters.

But Iranian state media published a draft plan Thursday that would restrict traffic through Hormuz. The plan is under review by Iran’s parliament, according to the state outlet Fars.

Under the draft plan, Iran would ban U.S. and Israeli ships from transiting the Strait. Other nations that have harmed Iran would not be allowed to transit until compensation is paid, according to the draft.

Oil prices rose Friday as investors waited for an agreement. Ship traffic through Hormuz was down 33% on Friday compared to the day prior, with most vessels using the Iranian route, according to the trade intelligence firm Kpler.

Brent crude futures, the international benchmark, gained more than 1% to close at $83.55 a barrel. U.S. West Texas Intermediate advanced about 1% to settle at $78.18 per barrel. Prices fell more than 7% for the week.

— CNBC’s Tanaya Macheel contributed to this story.

Iran on Saturday laid out sweeping demands to the U.S. for reopening the Strait of Hormuz, according to media reports.

The Secretary of Iran’s Supreme National Security Council, Mohammad Bagher Zolghadr, said Saturday that reopening the strait would require Washington to lift its naval blockade and sanctions, withdraw U.S. military forces from the region, pay war reparations, and release frozen Iranian assets.

The council also called for an end to U.S. attacks on Iran’s regional allies and to threats against Iran, according to the reports.

CNBC has not independently verified the demands. The White House did not immediately respond to a request for comment.

According to the interim deal signed in June between the U.S and Iran, a schedule to end sanctions and a compensation plan would be part of the final deal, as would negotiations to address frozen assets. The end of a 60-day period agreed to negotiate a final deal will come in just over a week.

The statement came shortly after Abu Dhabi’s National Oil Company (ADNOC) said one of its vessels was targeted by a missile while transiting the Strait of Hormuz earlier in the day. ADNOC said in a statement that the incident “resulted in no injuries, and the situation has been brought under control.”

The United Arab Emirates, of which Abu Dhabi is the capital, said in a post on X that it “condemns in the strongest terms the targeting of an ADNOC-affiliated tanker while it was passing through the Strait of Hormuz.”

Separately, Iran said it was close to reaching a deal with Oman to manage the strait, the Associated Press reported. Iranian Foreign Minister Abbas Araghchi earlier Saturday said the two countries, which border the waterway, were close to reaching an agreement on navigation, “specifically the determination of a transit route.”

Oman said in a statement that the discussions were ongoing “in a positive and constructive atmosphere,” and condemned attacks on ships on the strait.

U.S. Vice President JD Vance, in an interview with Fox News on Saturday, said Iran and its Gulf neighbors, particularly Oman, have been discussing how to ensure the safe flow of traffic through the strait. Plans include a traffic scheme, demining the waterway, and a commitment from Iran not to fire on commercial vessels, he said.

“We don’t trust. We verify,” Vance said, adding that the U.S. would judge Iran by its actions rather than its words.

Tehran’s ability to effectively close the strait — an open, untolled international waterway before the U.S.-Iran war started on Feb. 28 — has triggered a global energy supply shock that has driven up gas prices, exacerbated inflation and raised alarms about oil reserves.

Oil prices rose Friday as investors waited for an agreement teased by the Trump administration earlier this week to open the strait to freedom of navigation.

“The reopening of the Strait of Hormuz is subject to the specific mechanism and conditions of the Islamic Republic of Iran and has nothing to do with the negotiations between Iran and Oman,” Sardar Mohbi, a spokesman for Iran’s Islamic Revolutionary Guard Corps, said in a statement on Telegram translated by Google.

Treasury Secretary Scott Bessent told CNBC on Tuesday that an agreement to open Hormuz with freedom of movement could come as soon as Wednesday. President Donald Trump and Secretary of State Marco Rubio had also indicated that an agreement was imminent.

But a deal still has not been announced yet. Meanwhile, ship traffic through Hormuz was down 33% on Friday compared to the day prior, with most vessels using the Iranian route, according to the trade intelligence firm Kpler.

Iran and Oman are working on an agreement to define transit routes through the strait, according to media reports. Inbound traffic would transit Iranian waters while outbound traffic would go through Omani waters.

But Iranian state media published a draft plan Thursday that would restrict traffic through Hormuz. The plan is under review by Iran’s parliament, according to the state outlet Fars.

Under the draft plan, Iran would ban U.S. and Israeli ships from transiting the Strait. Other nations that have harmed Iran would not be allowed to transit until compensation is paid, according to the draft.

Brent crude futures, the international benchmark, gained more than 1% to close at $83.55 a barrel. U.S. West Texas Intermediate advanced about 1% to settle at $78.18 per barrel. Prices fell more than 7% for the week.

A brief hiatus in fighting between the U.S. and Iran after a June 17 memorandum of understanding was followed by weeks of attacks and counterstrikes between the U.S. and Iran, with Tehran targeting several of its Gulf neighbors with missiles and drones.

On Thursday, Iran’s chief negotiator accused Trump of staging “theater diplomacy,” as Washington and Tehran offered conflicting accounts of bilateral engagement aimed at ending their monthslong hostilities.

“‘Massive attack coming … wait, never mind, they want to negotiate.’ That’s theater diplomacy on loop,” Mohammad Bagher Ghalibaf, Iran’s parliament speaker and top negotiator, wrote in a post on X on Thursday in an apparent gibe at Trump.

The remarks came days after Trump called off planned strikes and said the outlines of a deal had already been settled with Tehran. Iranian officials have rejected the claim, saying no talks were underway.

The conflict is meanwhile broadening across the region, with Gulf energy infrastructure and key shipping choke points under renewed threat.

— Anniek Bao, Kevin Breuninger, Emma Graham, Spencer Kimball, Justina Lee and The Associated Press contributed to this story.

The chief executive of Ukraine’s leading arms company says Kyiv has “learned the hard way” that military strength is an essential precursor to diplomacy, describing deep strikes into Russian territory as a core tenet of the country’s pressure campaign.

Missile and drone maker Fire Point, which says it currently facilitates more than 60% of Ukraine’s so-called “long-range sanctions,” has scaled exponentially since being founded in response to Russia’s full-scale invasion in 2022.

The defense-tech startup produced around 200 drones that year, a feat CEO Iryna Terekh described as a “huge achievement.”

Since then, the Kyiv-headquartered startup has swelled from three founding members to more than 7,000 employees and Terekh says it “looks realistic” to expect the team to produce more than 100,000 drones by year-end.

“We have to understand that we live, unfortunately, in the same timeline with a completely barbarous, imperialistic neighbor and we can expect whatever,” Fire Point CEO Iryna Terekh told CNBC by video call.

“Unfortunately, I was in that naïve state of mind before the full-scale invasion that we will find a way to de-escalate the situation and find a diplomatic way to deal with this, but from what we can observe, this is not something that is possible.”

Russia’s Foreign Ministry did not respond to CNBC’s request for comment. Russian President Vladimir Putin has previously framed the conflict as a pursuit to reverse Russia’s post-Soviet retreat and revive Moscow’s superpower status.

From Siberia to occupied Crimea, Ukraine’s drone campaign appears to have revived hopes that the war could be shifting in Kyiv’s favor, although commentators have warned that efforts to raise the cost of the conflict for Russia risk further escalation.

Some analysts have also questioned whether Ukrainian drones alone can force Putin to the negotiating table, with the Atlantic Council’s Christopher Isajiw suggesting that progress toward peace may only become possible when continuing the war becomes more costly for the Russian president than ending it.

Ukraine has stepped up attacks on Russia’s Amazon-style retail giant Wildberries in recent weeks, seeking to squeeze a critical piece of Russia’s consumer economy and create a new pressure point for Putin.

Russian forces, meanwhile, have increased the number of missile strikes on Ukrainian cities, likely seeking to exploit Kyiv’s shortage of ballistic missile interceptors.

Known for flagship products such as the FP-1 series of deep-strike drones and the FP-5 Flamingo cruise missile, Fire Point’s CEO said the company is doing whatever it can to support Ukraine’s deep-strike ambitions.

“I’m very proud and I feel a huge responsibility to be a big part of this. We have to understand that the whole war doctrines are changing live in the moment,” Terekh said.

President Volodymyr Zelenskyy singled out Fire Point as putting Siberia “within reach of Ukrainian precision” following an attack on a major oil refinery in the Russian city of Omsk last month.

The attack was seen as further evidence of Kyiv’s long-range drone capabilities in the run-up to a crunch NATO summit in Turkey, where U.S. President Donald Trump told Zelenskyy that the U.S. would allow Ukraine to produce ballistic missile interceptors.

The U.S. president has since cast doubt on plans to allow Kyiv to manufacture Patriots domestically and in Europe, however, raising alarm among Ukrainian officials who fear a winter assault could pose the country’s toughest challenge of the war yet.

Zelenskyy has repeatedly called on international partners to expedite the supply of ballistic missile interceptors to Ukraine, saying that the technology could have saved the lives of those killed in Kyiv on Aug. 5.

Fire Point aims to produce a ballistic missile interceptor for a fraction of the cost of a U.S.-made Patriot. However, Terekh said these efforts require the company to achieve in a few years a program that usually takes two to three decades.

A hold-up in European funding has also prevented the company from maximizing production of its Flamingo cruise missile, Terekh said.

“The production of Flamingo is not running at full power [at] the moment because we were waiting for the funds for a European loan to come in but we expect to ramp it up to expected maximum capabilities that we named when we started the Flamingo production.”

Terekh has previously compared European bureaucracy to the security threat posed by Russian forces.

“Probably I put a little bit too much drama in this phrase, but I really wanted it to be heard because we need to understand that whatever Fire Point achieved, and as well as other Ukrainian manufacturers, would be never possible in any [other] European country, simply because of bureaucracy,” Terekh said.

“You take the same people, the same money, the same factories, they would simply not be working in Europe for one simple reason, because of the hold of regulations and I would love to inspire European politicians to review how the bureaucracy should work under such a huge threat that we are all facing now,” she continued.

“When we compare these two threats, so the Russians and the bureaucracy, with the Russians you can fight with drones and missiles but how do you fight with bureaucracy when you cannot receive a paper that you need very much to do some job?”

A spokesperson for the European Commission, the EU’s executive arm, declined to comment.

Alongside diplomatic, financial, military and humanitarian support for Ukraine, the EU recently introduced its largest sanctions package against Russia in four years, targeting almost 220 individuals and entities as it seeks to squeeze the country’s economy and its capacity to prolong its full-scale invasion.

“Ukrainians were pretty imaginative in trying an alternative strategy,” Alex Kolyandr, director for Europe at the Eurasia Group, a consulting firm, told CNBC.

“I’m not entirely sure it was the right decision to strike Russian oil facilities in March and April … but then I think it was extremely smart to target refining facilities and the main retail company,” Kolyandr said, referring to Kyiv’s attacks on Wildberries warehouses.

“I understand there was a twofold aim in all that. First of all, to force some economic damage and then to broadcast the message that this is not some kind of faraway colonial war, but it is something much closer to home. And honestly, they are quite successful in that,” he added.

Volkswagen‘s top investor and controlling family shareholders on Friday issued their clearest message yet to management as the German auto giant weighs the prospect of what could be the most radical overhaul in the firm’s 89-year history.

Europe’s biggest carmaker has confirmed that it is looking to cut up to 100,000 jobs, twice as many as previously stated, as it seeks to counter a profit slump amid billions of euros in tariff costs and intensifying competition from Chinese car brands.

“The Volkswagen Group is at a historic crossroads,” Hans Dieter Pötsch, chairman of the board of management of Porsche SE, said in a statement.

“The decisions that Volkswagen makes now will determine its future. For the sake of the company and its sustainable competitiveness, everyone must now step up and take responsibility.”

Pötsch warned that the longer decisions are delayed, the bigger the firm’s problems will become. “The focus must now be solely on what is necessary from a business and economic perspective. All other considerations must be secondary,” he added.

Johannes Lattwein, member of the board of management responsible for finance and IT at Porsche SE, said it is “imperative” for Volkswagen to reduce excess capacity, significantly lower costs and strengthen the group’s decision-making and execution capabilities.

“As the majority holder of Volkswagen AG’s ordinary shares, Porsche SE therefore supports the group board of management and its proposals. Competitiveness is the goal,” Lattwein said.

“Competitiveness is the goal. Every option must be considered in pursuing it. Otherwise, Volkswagen risks permanently losing ground to its international competitors,” he added.

The Porsche and Piëch families control Volkswagen through their holding company, Porsche SE, which is the single largest shareholder of Volkswagen. It owns 31.9% of Volkswagen’s equity and 53.3% of its voting rights.

The statements come as Porsche SE reported adjusted half-year earnings after tax of 949 million euros ($1.1 billion), reflecting a 14.5% drop compared to the same period a year ago.

A spokesperson at Volkswagen told CNBC that the statements from Porsche SE confirm the auto giant’s position “on all aspects of the presented future plan and the urgency of its implementation.”

On a call after the company reported half-year results, Volkswagen CEO Oliver Blume said the company already has a clear strategy, a concrete plan and strong teams.

“What we do not have is time. That is why we have already started work in many areas and are implementing measures from our future plan,” Blume said on July 24.

“I can assure you that we have one unequivocal objective: We want to secure the long-term competitiveness and future of our unique Group,” he added.

Shares of Volkswagen were little changed on Friday. The stock is down around 27% year-to-date.

Speaking to CNBC’s Annette Weisbach late last month, Volkswagen Chief Financial Officer Arno Antlitz said the auto industry has faced several challenges over the last 12 months, citing the heavy burden of tariff costs and the growing number of car exports from Beijing to Europe, among other examples.

Antlitz also addressed whether the company may look to outsource plant capacity to the defense industry to stave off possible plant closures.

“There are various options. And look, I’m not looking for job cuts per se and I’m not looking for plant closures per se,” Antlitz said on July 24.

He continued: “We want to reduce our cost structure and we want to increase productivity and increase the capacity utilization of our plants. And if there are better options then we will obviously look into that.”

Tensions are high between Meta Platforms and Indian regulators after the company came under fire in the country twice in short succession.

The tech behemoth briefly restricted a Facebook post by Prime Minister Narendra Modi addressing students during the Gen Z protests in July, just days after regulators summoned the company over concerns about child-abuse content. While it later said the restriction was due to an “error,” initially the post reportedly indicated the content was blocked due to a “legal request.”

A parliamentary panel on Wednesday demanded an apology from Mark Zuckerberg within three days for the restriction on Modi’s post — failing which it recommends revoking the social media giant’s safe harbor immunity in the country. This would make Meta liable for the user-generated content on its platform.

India is a key market for Meta, with the largest user bases for WhatsApp, Instagram, and Facebook, and legal experts told CNBC that it would become almost impossible for Meta to operate in the country if the safe harbor protection is withdrawn.

They added, however, that India would need to amend the broader legal framework to remove the safe harbor rights of the platform.

Meta, though, is keen to assuage concerns of the regulators, especially those around Modi’s post.

Joel Kaplan, Meta’s chief global affairs officer, who was in a meeting with India’s Information Technology Minister Ashwini Vaishnaw on Wednesday, said he “apologized” to the minister “for the error restricting PM Modi’s post,” the company said in a press statement.

But local media reports the same day, quoting government sources, said that it was Meta’s founder and CEO Zuckerberg who made the apology for the presence of child abuse content, deepfake material and errors in operating the platform.

Meta did not comment on the authenticity of these claims in the official statement shared with CNBC.

In an interview with ANI on Wednesday, Nishikant Dubey, the chair of a parliamentary panel on communications and information technology, wrote to India’s information technology and home ministry, demanding an apology from Zuckerberg himself.

“Zuckerberg must apologize within three days” for deleting Modi’s video addressing students, Dubey said, saying the platform was misusing the privilege of safe harbor protection — adding that if it is revoked “there could be a nationwide flood” of formal police complaints against Meta, he added.

During the Gen Z protests in India last month, Instagram, Meta’s short video app, became a popular platform for public discourse in the country. Modi started to make reels to appeal to the young protesters.

But this growing influence is also exposing the U.S. company to intense government scrutiny over lapses in content moderation and concerns over user privacy. The Indian government last month issued a stern warning to Instagram to remove child abuse ads on its platform that followed a warning to WhatsApp over the rollout of a username feature.

Meta’s global team will remain in India to conduct “three to four” additional meetings with the ministry that will assess whether the social media company is complying with Indian laws, Indian news agency ANI reported on Thursday.

Meanwhile, Saurav Das, spokesperson of the Cockroach Janta Party which steered the Gen Z protest in India, said that Meta was restricting access to his content and claimed it was succumbing to “high-handed pressure from the government.”

India’s Ministry of Electronics and Information Technology didn’t respond to CNBC’s calls and emails seeking comment on the proposal to withdraw Meta’s safe harbor immunity.

Safe harbor protection grants conditional immunity to social media companies, explained Udit Mendiratta, technology and disputes partner at Argus Partners.

He added that this immunity can be removed if a social media platform has abetted an unlawful action, if it has failed to remove content “expeditiously” after a court or government order, and if it fails “due diligence obligations” in removing child sexual abuse material, deepfakes and hate speech.

However, he said that under the existing Indian law, “loss of immunity is content specific,” and the law would need to be amended to remove the safe harbor immunity of an entire platform.

While the Indian government is yet to take any official action, experts said any decision affecting safe harbor would be monitored by the technology industry because it will alter the liability framework.

“Safe harbor protection is the cornerstone of digital regulation dating back to the earliest days of the internet,” Vikram Jeet Singh, partner at law firm BTG Advaya, told CNBC, adding that the loss of this immunity might expose social media companies to further civil and regulatory actions.

China’s exports rose more than expected in July, though growth eased from June’s blistering pace, with global demand for high-tech components helping absorb the country’s goods.

Exports grew 23% in U.S. dollar terms in July from a year earlier, official customs data showed Friday, topping Reuters-polled analysts’ forecast for a 22.2% growth. That slowed from June’s 27% surge, which was the fastest pace since October 2021.

Imports rose 27.5% last month, just shy of Reuters estimates of 27.9% in a Reuters poll, slowing from June’s 36% jump — the quickest in five years.

A worldwide build-out of AI infrastructure has helped support the world’s second-largest economy through a year of geopolitical shocks, keeping growth on track even as domestic consumption has been subdued.

China’s integrated circuit exports by value nearly doubled this year as of end-July, from the same period last year, according to official data compiled by Wind Information. In July alone, chip exports surged 117% from a year earlier.

Exports of mechanical and electrical products accounted for more than 60% of China’s total shipments in the first seven months this year, according to China’s customs authority, driven by demand for electric vehicles, lithium battery and wind power generating equipment. Among the other fast-growing export categories were 3D printers and industrial robotics.

Chinese exporters had also been racing goods onto U.S.-bound ships ahead of an anticipated increase in tariffs. Washington applied a new 12.5% levy on Chinese products in late July, replacing a temporary 10% rate that had lapsed.

Shipments to the U.S. grew around 17% from a year ago, quickening from about 14% in June, according to Wind, while imports increased 15%. China’s exports to the European Union continued to grow, expanding 16% year on year in July, while imports from the bloc shrank 1%.

The trade surplus came in at $112.5 billion, exceeding analysts’ estimates of about $107 billion, while narrowing from $125.6 billion in June, customs data showed.

China’s export engine is likely to remain strong in the third quarter, said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

Beijing’s massive trade surplus, which exceeded $1 trillion last year, has become a standing grievance for its trading partners, including the U.S. and the European Union, where officials have pressed China to rebalance its economy toward boosting consumption.

“I expect intense negotiations between China and the major trading partners in the coming months on what can be done to make trade more balanced,” said Zhang, ahead of the expected U.S.-China summit in September and the EU-China meeting on economic relations in October.

Chinese authorities reaffirmed support for the slowing economy during a policy-setting meeting in late July, including accelerated fiscal rollout and timely monetary adjustment, while stopping short of announcing concrete steps to boost household spending.

China’s economy in the second quarter expanded at its weakest pace since the fourth quarter of 2022, with gross domestic product growth coming in at 4.3% in the April to June period.

Retail sales eked out 1% growth in June, a thin rebound from May’s 0.6% contraction. Consumer inflation cooled to 1% in June from 1.2% in May, while factory-gate prices rose 4.1%, the strongest growth since July 2022.

Ukraine’s military on Thursday struck two Russian oil refineries hundreds of miles from its border, Ukrainian President Volodymyr Zelenskyy said, as Kyiv continues to target the country’s energy infrastructure.

Ukraine’s armed forces struck the Bashneft-Novoil refinery in Bashkortostan and the Slavneft-Yanos refinery in the Yaroslavl region, Zelenskyy said.

In a post on social media, Zelenskyy said Ukraine’s long-range sanctions had “once again worked to limit Russia’s oil revenues, which it uses to finance the war and the killing of Ukrainians.”

The Slavneft-Yanos facility in Yaroslavl, which is situated hundreds of miles from the Ukraine border and about 170 miles (274 kilometers) northeast of Moscow, is one of Russia’s biggest oil refineries. It has previously been targeted by Ukraine’s military throughout the conflict.

The facility employs more than 3,500 people and makes about 15 million tons of crude oil each year, according to its website. Its products include fuel for cars, jet fuel and a wide range of oils.

Mikhail Evraev, governor of the Yaroslavl region, said on Thursday that the region had faced its largest-ever drone attack, with air defense and electronic warfare destroying 93 drones.

“Falling debris hit the oil refinery’s storage tanks. Emergency services are working to extinguish the fire,” Evraev said via Telegram. There were no casualties, but four people sustained injuries, he added.

Alongside mid- and long-range drone attacks on energy infrastructure, Ukraine has stepped up attacks on Russia’s Amazon-style retail giant Wildberries in recent weeks, seeking to squeeze a critical piece of Russia’s consumer economy and create a new pressure point for President Vladimir Putin.

Russian forces, meanwhile, have increased the number of missile strikes on Ukrainian cities, likely seeking to exploit Kyiv’s shortage of ballistic missile interceptors.

Ukraine’s Zelenskyy also said the country’s armed forces had responded to Russian attacks on ships in the Black Sea by striking two military patrol boats and shadow fleet vessels.

One person was killed and three others were injured in a Russian attack on a foreign-flagged ship loaded with Ukrainian wheat in the Black Sea, according to Odesa regional governor Oleh Kiper.

A fire broke out on the Guinea-Bissau-flagged ship, Kiper said via Telegram on Thursday, and the crew was evacuated.

Hello, this is Priyanka Salve, writing to you from Singapore.

Welcome to the latest edition of “Inside India“ — your one-stop destination for stories and developments from the world’s fastest-growing large economy.

The Indian government has been rushing to sell stakes in state-owned companies this year. So far, it has pared its stake in 10 public sector companies, raising more than 620 billion rupees ($6.5 billion) this year. This week, I unpack what’s driving India to meet its often-missed disinvestment target.

Any thoughts on today’s newsletter? Share them with the team.

It can be difficult to be the world’s fastest-growing large economy when inflationary pressures and fiscal constraints threaten to put the brakes on government spending.

But India cannot afford to lose its growth edge as it competes for the attention of global investors who have already put the country on the back burner as they focus on artificial intelligence-driven plays — something the South Asian country’s growth story has been missing.

So, to keep its growth engine running amid a widening fiscal deficit, the country is ramping up stake sales in state-owned companies, with the government offloading shares in 10 firms since the start of the year, despite dull market conditions.

The government has sold shares in several companies including Cochin Shipyard, Indian Railways Finance Corp, NHPC, and Coal India this year and, on Wednesday, it completed one of its biggest stake sale.

It raked in $3.3 billion by selling a 6.5% stake in the country’s top life insurer, Life Insurance Corporation of India. The share sale was priced at a 10% discount to attract buyers — unsurprisingly, it was oversubscribed.

While the government does have an obligation to reduce its stake in these businesses to comply with listing regulations, there has been a sudden and sharp rise in transactions this year.

The last time the Indian government met its disinvestment goal — target for stake sales in state-owned firms — was in the financial year ending March 2019.

Excluding LIC, India has sold stakes in 9 state-owned firms in 2026 and raised nearly 270 billion rupees ($2.8 billion), its highest in more than 10 years, according to Indian market intelligence provider Prime Database.

And LIC alone surpasses that number by a good margin, signaling the state’s increasing proclivity toward raising funds without widening the fiscal deficit.

The government is well on its way to achieving its annual target of raising 800 billion rupees ($8.4 billion) through stake sales in state-owned enterprises, experts said, adding that these funds will be crucial for India as it faces deepening macroeconomic headwinds. The country has now met over 65% of its annual disinvestment target.

“Tapping into the divestment proceeds is a very good strategy,” Anubhuti Sahay, head of India economic research at Standard Chartered Bank, told CNBC, adding that the government is facing a downside revenue risk and an upside expenditure risk due to a higher subsidy burden.

India did not meet its disinvestment targets for years as it was in a “comfortable fiscal situation,” she said, adding that right now the stake sale is akin to tapping into “family silver” in times of need.

For the quarter ending June, the country’s goods and services trade deficit was $37.4 billion. Its fiscal deficit at the end of June was 3.1 trillion rupees, or 18.2% of the budget estimate for the financial year ending March 2027.

While this is not unusual for India, the country has also seen strong capital outflows from foreign investors, which limits its ability to cover the rising import expenses. The capital outflows have led to currency weakness and tighter domestic financial conditions, experts said.

The acceleration of government stake sales reflects “greater fiscal pressure,” Alexandra Hermann Prasad, lead economist at Oxford Economics, told CNBC, adding that these funds will “provide useful non-debt revenue as strong expenditure growth makes the deficit target harder to achieve.”

Non-debt revenue is the income earned by a government that does not have future repayment liabilities.

Global brokerage Citi, in a report on Monday, called it a “favorable” trend, adding that during the quarter ended June, India’s fuel, food and fertilizer subsidies had increased 37% on year but the South Asian country has not scaled back its capex spending.

Higher-than-expected proceeds from disinvestment are likely to ease the fiscal pressures arising from GST rationalization in September 2025, as well as costs associated with the policy response to the Middle East shock, Christian de Guzman, SVP, Sovereign Risk Group at Moody’s Ratings, told CNBC. 

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Coming up

Aug. 10: IPO of Bain Capital-backed Dhoot Transmission opens.

Aug. 12: CPI Inflation data for July.