Drone Striking the Iron While Its Hot

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What we are following this week:

• Global Politics: Russia x Ukraine, Iran, Keir Starmer, Nigeria

• Special Section: Cuba

• Domestic Politics: Texas and Nebraska Senate Races, Sports Gambling Ads, Utah Data Center

• Economics: Oil, US x China Summit, Warsh Confirmed

Global Politics: Russia x Ukraine, Iran, Keir Starmer, Nigeria.

As Ukraine continues its campaign of drone strikes deeper into Russian territory, we take a look at the possible escalation in the Russia-Ukraine war. In the UK, Keir Starmer faces a possible ousting with other Labour Party figures already circling. Meanwhile, the President is again threatening further strikes on Iran if no deal can be reached soon. The US also executed a joint strike with Nigeria against ISIS on Friday. This week:

Russia x Ukraine

• 82% probability for at least one additional Ukrainian drone strike in Moscow in the next 14 days.

• 78% probability for Ukraine to conduct a drone strike on Russian energy infrastructure at least 500 km inland from the Russia-Ukraine border in the next 60 days.

• 5% probability for Russia to use a tactical nuclear weapon in Ukraine in 2026.

• 72% probability for the Russian military to significantly intensify strikes on major Ukrainian cities in the next 30 days.

  • The VICO model points to pressure from Ukrainian strikes as well as the announcement of Russian nuclear exercises as evidence of escalation that could result in an increase in strikes.

Iran

• 93% probability that the United States will conduct a limited military strike against Iran in the next month.

  • 38% probability that the United States will commit ground combat forces to Iran in the next month.

Keir Starmer

• 92% probability for Starmer to be out before August 1, 2026. (Kalshi: 51%)

  • The VICO model explains that over 100 MPs have already called for Starmer’s exit, meaning the 80 MPs needed to formally trigger a leadership contest can be reached if Starmer refuses to resign.

• 17% probability for Andy Burnham to become Prime Minister in 2026. (Polymarket: 47%)

  • Before Burnham can challenge for the Prime Minister spot, he must win an election to parliament. The VICO model gives a 58% chance for him to do so. (Kalshi: 68%)

  • The VICO model argues that Starmer’s allies campaigning against Burnham on ideological grounds may stifle his candidacy.

Nigeria

• 82% probability for the US to launch another solo or joint military strike against at least one terrorist organization in Nigeria in the next 90 days.

• 48% probability for Nigerian-based terrorist groups to conduct a kinetic attack on US or Nigerian military bases in retaliation in the next 90 days.

Special Section: Cuba

CIA Director Ratcliffe traveled to Havana on Thursday and warned Cuban officials against engaging in hostilities. On Wednesday, the DOJ unsealed an indictment of Raúl Castro. Cuba has acquired more than 300 military drones from Russia and Iran since 2023, with intercepts showing Cuban officials recently sought additional equipment and were studying Iranian tactics. Additional sanctions are expected this week.

Military Action

• 30% probability for the United States to engage in direct military action against Cuba in the next 90 days.

  • Ticker: VICOTZBK

• 52% probability for the United States to conduct a military intervention in Cuba similar to the operation used to remove Nicolás Maduro from power in Venezuela in the next 180 days.

• 72% probability for the United States government to formally designate Cuba’s drone program as a threat to national security in the next 90 days.

  • 3% probability that Cuba formally agrees to disarm or surrender its military drone program in the next 90 days.

Regime change?

• 62% probability for the current Cuban government to collapse or undergo a regime transition, with or without US involvement, in 2026.

US Politics

• 30% probability that Marco Rubio will be the official Republican Party nominee for President of the United States before August 14, 2028.

  • What if a full-scale Cuba operation succeeds? ↑ probability rises to 48%

• 88% probability that a major escalation in US-Cuba tensions will become a significant issue in US national politics in the next 180 days.

VICO Simulation: If the US conducts direct military intervention in Cuba, then:

• 80%: The probability for the US to impose a formal blockade on all oil shipments to the island within 30 days.

• 60%: The probability for Russia to deploy naval vessels to the Caribbean within 60 days.

• 50%: The probability for China to issue a formal red-line warning over Taiwan within 30 days.

• 40%: The probability for Cuba to lose internal territorial control in at least one province within 6 months.

Domestic Politics: Texas and Nebraska Senate Races, Sports Gambling Ads, Utah Data Center

In Texas, the President finally endorsed Ken Paxton just one week away from the Senate primary. In Nebraska, independent Dan Osborn received a boost to his chances as the winner of the Democratic Primary pledged to drop out after winning. On the hill, a bipartisan bill was introduced in the Senate to ban sports gambling ads to children. And controversy has erupted over Kevin O’Leary’s proposed $100 Billion data center in Utah. This week:

Texas Senate Race

• 29.6% → 35.2% probability for Ken Paxton to win the 2026 Texas Senate Election. (Kalshi: 54%)

  • Despite Trump's endorsement increasing Paxton’s probability, the model favors James Talarico (D) at 54%.

    • Ticker: VICONTHW

• 55% probability for Pete Ricketts to win the Nebraska Senate Election. (Polymarket: 60%)

  • The VICO model forecast dipped from just above 60% down to 55% after Democrats successfully consolidated around Osborn.

    • Osborn has pledged to caucus with neither party, meaning a Ricketts defeat in such a deep red state could lower the threshold for Democrats to stall certain Republican bills in the Senate.

Sports Gambling Ads

• 24% probability for Congress to ban digital gambling ads targeting minors in the next year.

• 16% probability for Congress to ban sports-related contracts on prediction markets.

  • What if Congress bans sports gambling ads targeting minors? 16% → 35%

  • The VICO model highlights that while the basic concept has bipartisan support, the exact scope of the ban remains elusive.

Utah Data Center

28% probability for the state or local government to disallow Kevin O’Leary’s proposed data center.

Economics: Oil, US x China Summit, Warsh Confirmed

Oil prices have stagnated as the market tries to interpret mixed signals from the President about future conflict in Iran. On the back of the China-US Summit last week, Treasury Secretary Bessent said the US is not eager to immediately extend the tariff truce, and instead may do so at a later summit. Kevin Warsh is set to be confirmed as Fed Chair on Friday. He will simultaneously inherit an inflating economy and demands for rate cuts from the President. This week:

Oil:

• 42% probability for Brent crude to exceed $130 in the next 60 days.

• 10% probability for Brent crude to sustain a price below $90 for seven consecutive days before the midterms.

US x China Summit

• 32% probability for the US and China to agree to a mutual reduction of tariff rates in the next 6 months.

• 68% probability for the US and China to formally extend the current tariff truce before it expires on November 10.

• 88% probability for another Summit between Presidents Trump and Xi before the tariff truce expires on November 10.

Warsh Confirmed

• 8% probability for the Federal Reserve to cut rates at least once in 2026.

• 62% probability for the Federal Reserve to raise rates at least once in 2026.

  • After the President’s big push for a more rate-cut-friendly Fed chair, the VICO model argues that the inflationary state of the economy is likely to keep the Fed from pursuing the President’s favored rate cuts. The VICO model even argues it may force the Fed to raise rates despite a cooling labor market.

About Us

• VICO empowers decision makers to quantify and navigate event risk. Forecast, simulate and monitor political, geopolitical and economic events.

• Learn more and obtain a beta account at www.vico.io or email us at inquire@vico.io

Methodology and Copyright Notes:

All percentage changes are over the last week except where noted.

Our proprietary AI models are rigorously backtested and do not rely on any betting market information.

All data and content are owned by and copyrighted by VICO Technologies Inc.