However the drama wasn't done as Hamilton totally lost to power, confirming a double retirement for Mercedes on a disastrous day for the constructor.
The Finn temporarily slipped behind Verstappen and Raikkonen for fourth, but made his way back past both drivers with a daring move around the outside of Turn 4 on the first lap.
In the ensuring virtual safety vehicle period, Ferrari and Red Bull cars pitted but Mercedes didn't.
Driving on his team's home course, Red Bull driver Max Verstappen of the Netherlands took advantage of a catastrophic day for Mercedes to win the Austrian Grand Prix. "We had the right auto, today, some points were a little bit hard, but it was a good day for the team".
The next - and bigger - problem was tire wear.
Ricciardo, already a double race victor this season, slowed in a bid to get Verstappen to go past but the youngster maintained position instead, with the team urging both men to hurry up.
With the following grand prix at Silverstone, where Hamilton has been dominant with four wins from the past four races, extending his lead further at the Red Bull Ring would put him in a commanding position going into the final European races, where he has traditionally been strong.
For Bottas, his retirement from a race he won last year was another bitter blow, especially having beaten Hamilton to pole, and especially after the disappointment of Baku earlier in the year, where he lost an nearly certain win to an unlikely late puncture.
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"There are things you can do to override decisions from the pit wall", Hamilton told Sky Sports when asked about the decision not to pit under the virtual safety vehicle.
Talking of the strategy call, Hamilton stated that he has to trust the members of the pit wall as they can see the bigger picture of the race. They have a much better. they have the picture.
"I had plenty of people coming to see me before the start and saying, 'This was going to be a walk in the park, 1-2, you have the quickest vehicle'". "The whole weekend, it was awesome to see so much orange".
It was the first session since qualifying at the Canadian Grand Prix in which Vettel had out-performed fellow four-time champion Hamilton in their yo-yo scrap this year. He retook the lead in the driver standings by one point over Mercedes-AMG Petronas Motorsport's Lewis Hamilton.
Of his own early retirement, Bottas was equally disappointed.
Ricciardo's teammate Verstappen, who started fourth, held off a late charge from Kimi Raikkonen in the other Ferrari to celebrate his fourth career victory and first of the season.
"The development race is always tight", he said, after confirming that in addition to the upgraded engine introduced last weekend at Le Castellet, he and Mercedes team-mate Valtteri Bottas will have several chassis and bodywork upgrades this weekend. I just had to drive around the issue. "We need to find a bulletproof method to move forward for strategy because if our auto had kept going it was an easy win for us, we were comfortably ahead". Going into Turn 3, I could recover two places and was back in second place. "I anticipate it being probably one of the closest qualifying sessions that we've had this season".