The US says a submarine drone “malfunctioned” before it fell into Iranian hands, adding that it was an older model and not being used for sensitive operations.Iran earlier celebrated its capture of an American unmanned underwater vessel near the Strait of Hormuz, with Iranian state media publishing footage of the drone.Iran’s Revolutionary Guard claimed to have “trapped one of the most modern, intelligent and unmanned submarines of the terrorist American army at the entrance to the Strait of Hormuz”.It comes as the US military destroyed five Iranian oil tankers – four in the Gulf of Oman and one near Kharg Island – in retaliation for repeated missile strikes on a Navy warship.“The US warship successfully evaded the attempted Iranian attacks and continued to patrol regional waters. No American personnel were harmed”, the US military said.Meanwhile, the Iran-backed Houthi rebels have attacked several cities in Saudi Arabia, wounding at least 73 people and knocking operations at energy facilities offline, the Saudi-led coalition said on Tuesday in a further sign of the conflict spreading as diplomacy stalls. The coalition vowed a firm response to the attacks.Bryony Gooch9 September 2026 11:00European shares dip as oil nears $100European shares edged lower on Wednesday ahead of ⁠US inflation data, with Brent crude climbing to the cusp of key $100-per-barrel level as renewed tensions in the Middle East fanned inflation worries and curbed risk appetite.The ⁠pan-European STOXX 600 ​was ⁠down 0.4 per cent at 646.84 points, as of 0810 GMT. Germany's DAX edged 0.5 per cent lower, London's ⁠FTSE lost 0.2 per cent, while France's CAC 40 slipped ​0.6 per cent.The ⁠Middle East conflict escalated ‌this week after Iranian-backed Houthi forces in Yemen launched strikes on several Saudi cities, drawing a ‌key US ally further into ‌the war. The latest attacks threaten to deepen disruptions to Middle East oil supplies, already strained by strikes on ⁠regional energy infrastructure and key shipping lanes.Energy shares gained nearly 1 per cent as Brent crude prices traded close to $100, a level last seen in late July.The surge in oil prices has reignited inflation concerns, reinforcing expectations that central banks may have ‌to keep monetary policy tighter for longer.(Trading Economics)Bryony Gooch9 September 2026 10:30Pentagon reacts after Iran claims to capture droneA Pentagon spokesperson said an underwater drone had "malfunctioned more than a day ago” after Iran claimed to capture an unscrewed submarine drone."It was surveying regional waters in support of ongoing operations. The defective drone was an older ⁠model that neither collected sensitive data nor carried any classified sonar or radar equipment," the spokesperson said.Bryony Gooch9 September 2026 10:00Recap: IRGC 'captured' US submarine Iran's Revolutionary Guards said on Tuesday it had captured a US uncrewed submarine at the entrance to the Strait of Hormuz, offering a rare glimpse into how underwater drones are being used in military operations.Iranian state media said the vessel was ⁠a Dive-LD, a large autonomous underwater vehicle ​built ⁠by California defense firm Anduril. The 19-foot (5.8-metre) submersible can carry out missions including mine countermeasures, seabed mapping, intelligence gathering and the inspection of ⁠underwater infrastructure such as cables and pipelines, the company has said."We trapped one of ​the ⁠most modern, intelligent and unmanned submarines ‌of the terrorist American army at the entrance to the Strait of Hormuz. This submersible is equipped with the latest technologies," the Revolutionary Guards ‌Navy said in a statement carried by Iranian state ‌media.Bryony Gooch9 September 2026 09:40Japan urges Iran to exercise ‘maximum restraint’ in its vessel attacksJapan’s foreign minister Toshimitsu Motegi has urged Iran to exercise “maximum restraint” over its continued attacks on vessels during a phone call with his Iranian counterpart Abbas Araghchi on Tuesday. Motegi also expressed “deep concern” over renewed exchanges of attacks between the US and Iran and called on Tehran to show “maximum flexibility” to avoid prolonging the standoff with Washington, Mainichi reported. He also reportedly stressed the importance of restoring free and safe navigation through the Strait of Hormuz as soon as possible, without vessels incurring additional costs.Maroosha Muzaffar9 September 2026 09:00US issues new Iran-related sanctions targeting airlinesThe US has imposed fresh Iran-related sanctions on individuals and more than 30 entities, including several airlines.A notice posted on the treasury department’s website lists a number of commercial and private airlines targeted by the sanctions, including Iran’s Ava Airlines, Mehr Airways and Taban Air.Several foreign cargo service providers have also been sanctioned.“Let this be a warning to anyone doing business with Iran’s remaining airlines, all of which we sanctioned today: You are at risk of being cut off from the global financial system,” US treasury secretary Scott Bessent said. Maroosha Muzaffar9 September 2026 08:40Anduril confirms loss of US submarine drone vesselAnduril confirmed the loss of one of its vessels after a US submarine drone malfunctioned, but downplayed the significance of the incident."Dive-LD is an attritable autonomous system, meaning it is designed from the outset to operate in dangerous environments where loss of the vehicle is an expected possibility," a company spokesperson said.The US military is investing heavily in unmanned naval systems, including underwater and ​surface vessels, as it seeks cheaper ways to monitor vast areas ‌of ocean, gather intelligence and track ⁠adversary ships and submarines without putting sailors at risk.According to Anduril's ⁠website, Dive-LD can operate for up to 10 days without returning to base and is designed ‌to dive to depths ​of as much as 6,000 metres (19,700 ‌feet). Dive-LD units cost about $2.5 million each, ​U.S. military news site DefenseScoop reported in 2024.Bryony Gooch9 September 2026 08:33Iran says it captured US submarine near Strait of HormuzIran says it has captured a US Dive-LD unmanned submarine near the Strait of Hormuz.“We trapped one of the most modern, intelligent and unmanned submarines of the terrorist American army at the entrance to the Strait of Hormuz. This submersible is equipped with the latest technologies,” Iran’s Revolutionary Guard said.The Pentagon said the drone had “malfunctioned more than a day ago”.“It was surveying regional waters in support of ongoing operations. The defective drone was an older model that neither collected sensitive data nor carried any classified sonar or radar equipment,” the spokesperson said.“Dive-LD is an attritable autonomous system, meaning it is designed from the outset to operate in dangerous environments where loss of the vehicle is an expected possibility,” the California defence firm Anduril that makes Dive-LD said.Maroosha Muzaffar9 September 2026 08:20Iran signalling tougher response as US pressure mounts - reportIran is signalling a tougher military response to the US as economic pressure mounts, analysts tell The New York Times.“How do you regain the momentum? You escalate,” Farzan Sabet, an Iran analyst at the Geneva Graduate Institute, a research group told the outlet.“It’s highly damaging, but at the same time, they hope it raises global oil prices or fully re-closes the Strait of Hormuz,” he said.Mohammad Ali Shabani, an Iran analyst and editor of the regional news website Amwaj.media told the outlet: “All signs point to a make or break moment. I’m not sure the Iranians are going to wait until after the elections to be attacked if diplomacy fails.” Maroosha Muzaffar9 September 2026 08:00Iran’s Revolutionary Guard says it attacked 2 US vessels and 8 oil tankersIran’s Revolutionary Guard said on Wednesday that it had attacked two US vessels and eight oil tankers in the Gulf in response to what they described as a US attack on five Iranian tankers, Iranian state media reported.The Guard said they had also attacked 10 ships attempting to cross what they described as a “prohibited and unsafe” area of the Strait of Hormuz.Maroosha Muzaffar9 September 2026 07:40