Nobody Is Waiting for the Hormuz Deal to Work

Confidence: HIGH · Iran, Saudi Arabia, Middle East · Energy, Maritime, Insurance

The corridor deal exists on paper. The money says it won't hold.

Last week we told you Iran was turning its Hormuz blockade into a toll system. This week produced the headline: Iran and Oman agreed on coordinates for a restricted shipping corridor through the strait, and Brent crude, the international benchmark price for oil, fell from a wartime peak near $100 a barrel to near $79 on the news, before recovering into the low $80s by week's end.

The fine print explains why. Iran's Foreign Ministry, negotiating with Oman, says a full reopening still requires the US to lift its own naval blockade. Iran's parliament, on a separate track the Foreign Ministry doesn't control, is drafting a plan to ban vessels linked to the US or Israel outright while tolling everyone else, a plan Washington has already rejected. The Soufan Center, an intelligence analysis firm, assessed on August 6 that Iranian hardliners remain unconvinced the deal is worth accepting. Iran is negotiating against itself: one track running through its diplomats, a second and incompatible one running through its own legislature, and neither answers to the other. A deal signed by one doesn't bind the other.

That split is why the attacks never actually stopped. ADNOC, the Abu Dhabi National Oil Company, counts 15 vessel attacks tied to the strait, three of them this week alone, accelerating even as the diplomacy made headlines. On August 8, a missile reportedly struck a UAE-flagged ADNOC tanker; that account is single-sourced and unconfirmed. IMF PortWatch's independent shipping data, which predates the corridor announcement, shows actual transit through the strait still down 61 percent against normal traffic.

The Gulf states are reading the same split, and it shows in what they're buying rather than what they're saying. ADNOC just spent $1.3 billion on 11 supertankers. The immediate reason is a genuine export boom, UAE crude shipments have run near 3.6 million barrels a day since the country left OPEC's quota system, well above what its own overland pipeline to the Gulf of Oman coast can carry (that route caps out at under half of current volumes, so most of the growth still has to sail through the strait). Spending that kind of money to keep more oil moving through a contested chokepoint, in a tanker market already tight because of the same disruption, is not what a business does when it expects one faction's signature to hold for the whole country. Saudi Arabia is hedging from the other direction, absorbing roughly $5 a barrel to send crude overland on its own East-West Pipeline, from the oil fields on the Persian Gulf coast to the Red Sea port of Yanbu, skipping the strait rather than trusting anyone's signature on it. And on August 7, Turkey, Saudi Arabia, and Pakistan signed a mutual-defense pact in Mecca, explicitly modeled on NATO's Article 5: an attack on any one is treated as an attack on all three. None of that is what confidence in a single Iranian deal looks like.

The Takeaway: The negotiating table isn't the signal worth watching here. Gulf capital is. The region's most exposed players know Iran doesn't currently speak with one voice on this strait, so they're paying real money, tanker fleets, pipeline routing, a new defense pact, to stop depending on whichever voice wins.

Sources: Washington Post on the Iran-Oman corridor deal (paywalled) · OilPrice.com on ADNOC's 15 vessel attacks · gCaptain on ADNOC's $1.3 billion tanker purchase · Anadolu Agency on the Mecca mutual-defense pact · Soufan Center IntelBrief, August 6 · IMF PortWatch Hormuz chokepoint data

The Public Company That Built Its Business on Two Million Stolen Devices

Confidence: HIGH · Israel, United States, Global · Technology, Retail, Media

Two million devices got enrolled without anyone's permission. So far, nobody's been charged for it.

NetNut is a residential proxy service, the kind ad-verification firms, price-scraping operations, and market-intelligence vendors buy to make their web traffic look like it's coming from ordinary home internet connections instead of a data center. NetNut is run by Alarum Technologies, an Israeli company trading on NASDAQ under the ticker ALAR. Here's how the network actually got built, according to Qurium, a digital-forensics nonprofit that traced the code: someone installs an ordinary app, a torrent client, a VPN tool, a pirated streaming app, close to 5,000 different versions carried it, and buried inside is code that quietly turns their internet connection into a proxy relay for paying strangers. Qurium found the software has a consent prompt built into it. It's just never triggered. In their own words: "no registration for the service, no consent, nothing." That's roughly two million devices worldwide enrolled this way. The trail runs closer to home than a rogue app developer: one of the earliest companies distributing this code, a Latvia-registered outfit called NinjaTech SIA, was registered to a man who is now NetNut's own SVP of R&D and Alarum's Chief Strategy and Innovation Officer. He told Qurium that NinjaTech "ceased operations many years ago."

Once the network existed, criminals started using it too. Google counted 316 distinct groups, ordinary cybercriminals and espionage operators alike, routing their own attacks through NetNut's exit nodes in a single week in June to hide where the traffic was really coming from. On July 2 the FBI, working with Google, Lumen, Shadowserver, and IRS Criminal Investigation, seized hundreds of NetNut's domains. No one has yet been criminally charged. No US law bans a residential-proxy business outright, so prosecutors would have to prove the company knowingly enrolled devices without consent and knowingly let criminals use what it built, a harder case than an administrative shutdown. Alarum's own public statement says NetNut places "significant emphasis on appropriate notice and consent mechanisms." Qurium's analysis of the actual code says otherwise. The market didn't wait for a verdict: Alarum's stock lost 67 percent of its value in a week and is down roughly 95 percent from its 2024 peak, the company is cutting close to a third of its workforce, and a securities class action is now pending with an October 5 deadline. It remains listed and trading on NASDAQ.

None of this was hidden. Alarum filed public financial statements and traded on a major exchange the whole time. Ordinary due diligence would have found a real company with real revenue, not a shell. The gap wasn't visibility. It was nobody asking how a residential proxy network actually gets its residences.

The Takeaway: Buying NetNut's service isn't the exposure that matters most here. Any smart TV, streaming box, or other consumer device sitting on your own network, a break room, a lobby, an executive office, could already be enrolled in a pool exactly like this one, quietly relaying someone else's traffic under your network's IP address. Google's own count found actual espionage operators among the 316 groups using these exit nodes. That's an asset-inventory question for whoever owns IT this month: what consumer-grade devices are connected, and can you actually see what's running on them, not a procurement question reserved for whoever buys proxy or scraping services.

Sources: Krebs on Security: FBI Seizes NetNut Proxy Platform, Popa Botnet · Qurium Media Foundation forensic report, "Finding Popa" · Google Cloud Threat Intelligence on the NetNut disruption · BleepingComputer on the 2 million infected devices · StockTitan: Alarum workforce cuts and investigation update · Faruqi & Faruqi securities class-action notice

The Verification Step That Existed Only on Paper

Confidence: MODERATE · United States · Defense, Public Sector

The Army admits the AI got it wrong. It says that didn't matter.

Trax International Corporation is suing the Army in the US Court of Federal Claims, the federal court that hears money claims against the government, over a $450 million mission-support contract at White Sands Missile Range, awarded instead to Southwest Range Services. Trax's complaint alleges the Army used an AI evaluation tool that hallucinated: the "weakness" assigned to Trax's proposal cited references that don't actually appear anywhere in what Trax submitted, invented citations attached to a real, costly penalty, and nobody on the Army's own Source Selection Evaluation Board caught it before the award went out. The Army already conceded, during the earlier GAO protest, that this specific weakness was erroneous. In court filings released July 31, the Army lays out its defense: FAST TRACK, the internal AI platform used in the evaluation, didn't drive the outcome, it argues, because the disputed weakness wasn't what tipped the award toward Southwest Range in the first place. Trax puts a number on what the error cost regardless: without the disputed weakness, it says it would have held a $29.4 million price advantage over Southwest Range's bid.

This isn't Trax's first attempt to challenge the award. The Government Accountability Office, the federal watchdog that reviews contract-award disputes before they can reach a court, denied Trax's protest on May 14. GAO agreed an evaluation error existed, but ruled it didn't change the outcome, finding the Army's actual award decision leaned on Southwest Range's technical strengths rather than the disputed weakness against Trax. Trax is now asking a federal court to take a second look.

Set the specific contract aside and the mechanism is one many organizations already run somewhere. An AI tool flags something about a document. That flag enters the decision process carrying the weight of a reviewed finding. Nobody actually checks it. Real money or a real opportunity moves. Hallucination is a known, documented property of these tools; what's alleged here isn't that the AI was wrong, it's that whatever step was supposed to catch it didn't. And the exposure runs both directions: as the organization relying on the tool, or as the bidder, candidate, or claimant the tool quietly downgraded without ever finding out.

The Takeaway: If your organization uses AI to score vendors, proposals, claims, or resumes, the harder question isn't just whether someone checks the output before a decision ships. It's whether you can show what the tool actually scored and why, because the person or company on the losing end, a bidder in a sealed process, a candidate cut from a resume pile, usually has no way to know an AI made that call until a lawsuit or an audit forces it into the open. The AI can't be held responsible for getting it wrong. Someone in your organization has to be, by name, before a court asks you who that is.

Sources: Defense One: Did AI blow a $450M Army contract decision? · Nextgov/FCW on the Trax complaint · GAO decision B-424271.3 · ENR: US Army says experimental AI did not influence $449M White Sands contract award

The DOJ Pulled the 39-Year-Old Shield Under the Proxy Advice Duopoly

Confidence: HIGH · United States · Financial Services, Professional Services

For 39 years, ISS had the Justice Department's word it wouldn't come after it. That word is gone.

Institutional Shareholder Services, ISS, does something specific: before a company's annual meeting, it reviews everything on the ballot, who's nominated for the board, how much the CEO would get paid under a new plan, whether a merger should go through, and publishes a recommendation on each item, vote for this director, vote against this pay package. Large institutional investors, pension funds, mutual funds, index funds holding stock in thousands of companies at once, often follow those recommendations closely because they can't research every ballot themselves. In 1987, ISS asked the Justice Department a direct question: if we build a business doing this, will you come after us for having too much market power? DOJ wrote back with what's called a business review letter, a formal statement that it had no plans to bring an antitrust case, on the condition that ISS stuck to that voting advice and stayed out of companies' actual business operations. On August 5, DOJ took that assurance back. Its stated reason: ISS has grown well past voting advice into corporate consulting, exactly the kind of expansion the original letter didn't cover.

The reason this is worth knowing comes down to how much power ISS actually has. ISS and its main rival, Glass Lewis, together decide the recommended vote on more than 90 percent of shareholder ballots at US public companies. Losing DOJ's assurance doesn't mean ISS broke the law today. It means the Justice Department can now investigate or sue ISS over that market dominance without ever having promised in writing that it wouldn't, a real change in legal exposure for a firm nearly every US public-company board already depends on.

The Takeaway: If your company is public, or headed toward an IPO, the firm grading your ballot items now carries real antitrust exposure for the first time in decades. Whoever handles governance at your company, general counsel or corporate secretary, should check now whether you also pay ISS for consulting work alongside its voting recommendations, since that's the exact overlap DOJ just flagged as the problem.

Sources: US Department of Justice: Justice Department Withdraws Business Review Letter Issued to Proxy Advisory Firm · Investment Executive: DoJ signals anti-trust concern in proxy voting

Your Vendor's Code Just Became Your Breach

Confidence: MODERATE · Global · Retail, Media, Technology

You can do everything right and still serve malware, because your website runs code you don't control.

Adform is an advertising-technology firm whose tracking code runs on roughly 1,800 customers' websites and enabled some 1.5 billion ad impressions a day across 180-plus countries last year. On July 27 it detected that its core JavaScript file, served from its own domain, had been compromised and was quietly delivering malicious code alongside its normal function. That code watched visitors' clipboards and swapped any copied Bitcoin, Ethereum, or Tron wallet address for an attacker's own. It rechecked every few seconds, so even a careful visitor who caught the swap and pasted the correct address again just watched it get swapped right back: the standard advice, double-check before you send, didn't work against this. It also quietly reported every page a visitor looked at back to a server the attackers controlled. Independent researcher Kevin Beaumont spotted the activity about a week before Adform found it on its own. Adform hasn't said how many sites carried the file, how long it actually ran, or whether any funds were stolen; it says it has no evidence visitor data left its systems but concedes that "may have been possible."

The mechanism is what earns this a slot: every company whose site loaded the tag inherited the exposure automatically, with no mistake of its own, and an unverified but real possibility that visitor data left through a vendor's code can trigger breach-notification obligations even though the compromise lived on infrastructure the company never controlled.

The Takeaway: Most organizations cannot produce, today, a complete list of the third-party scripts running on their own website. That gap is the finding. Build the inventory this month, ad-tech tags, analytics, chat widgets, A/B testing tools, then find out how each vendor actually responds when their code gets compromised, and be ready to replace the ones whose answer isn't good enough.

Sources: The Hacker News: Hackers Poison Adform Script to Swap Crypto Wallet Addresses

One Week from Presidential Order to Binding Rule, Three Weeks to a Closed Export Door

Confidence: HIGH · United States · Manufacturing, Automotive, Defense

You can still buy this material from anywhere. You just can't sell it anywhere but here.

On July 30 the President signed an order under the Defense Production Act, the Korean War-era law that lets the government direct how private industry handles production and supply during a declared emergency. Two materials got covered. Black mass is the shredded remains of used lithium-ion batteries, still holding real amounts of lithium, cobalt, and nickel worth recovering. Tungsten scrap is a dense metal used in weapons, cutting tools, and electronics. Neither is technically a "rare earth" in the strict geological sense, but both sit in the same category the government is now moving to keep at home. On August 6, the Commerce Department turned the order into a binding rule. Starting August 27, any US person selling either material has to sell all of it to a US buyer. This is a restriction on selling, not buying: nothing here stops a US company from still importing black mass or tungsten scrap from overseas. What ends is the other direction, a US seller shipping either material abroad, something companies could do freely before. No public hearing or comment period happened before the rule took effect, and the rule's text doesn't say what happens to contracts that were already signed.

The speed is what should get your attention: a presidential order to a binding federal rule in one week, and a real supply channel closed off in three, by administrative action rather than a negotiated trade rule with time built in to prepare for it.

The Takeaway: This cuts two ways depending on which side of the transaction you're on. If your company sells recycled battery material or tungsten scrap, your export customers are gone as of August 27, you can only sell domestically now. If your company buys either material, more of the supply that used to leave the country is now required to stay here, so this is a good month to check whether a US seller can meet demand you've been sourcing overseas. Either way, confirm your position before the deadline, not after.

Sources: Federal Register: DPAS Directive Allocation Order · Recycling Today: Commerce Department moves to restrict black mass, tungsten scrap exports · Resource Recycling: New federal rule restricts black mass, tungsten scrap exports · National Association of Manufacturers on the export restriction

The Panama Canal Is Cutting Capacity Without Ever Closing

Confidence: HIGH · Latin America · Logistics, Maritime, Retail

A drought is quietly cutting how much cargo ships can carry through the Panama Canal.

The Panama Canal Authority has cut the maximum authorized draft for its largest Neopanamax locks, the wider set built in the canal's 2016 expansion to handle today's biggest container ships, twice already this summer, from 49.5 feet in early July to 49.0 feet on July 24, the level in effect today. Three more reductions are already scheduled: 48.5 feet on August 15, 48 feet on August 26, and 47.5 feet on September 3. Draft is how deep a loaded ship sits in the water. Gatun Lake, the rain-fed reservoir that feeds the canal's locks, keeps falling as El Niño, the periodic Pacific Ocean warming cycle that disrupts rainfall worldwide, strengthens, and a fully loaded ship would sit too deep to clear the locks safely. So operators either offload cargo before transiting, adding cost and time, or load less to begin with. The Authority says daily transit counts won't change, and that's precisely the trap: the same number of ships move, each carrying less freight, a capacity cut with no closure headline to trigger anyone's contingency plan. It's a structural echo of the Hormuz story above, a second global chokepoint constricting this month, this one by weather rather than weapons.

The Takeaway: If anything you ship travels through the canal on a large vessel, budget for a part-load surcharge and a longer queue through at least September. Two cuts are already in effect and three more are already scheduled. Don't treat this as a one-time hit.

Sources: gCaptain: Panama Canal to Tighten Draft Limits Again as Water Levels Continue to Fall · Panama Canal Authority: New Draft Adjustments for Neopanamax Locks · Port Technology International on the draft cuts

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