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U.S. to Release Millions More Barrels of Oil to Contain Gas Prices
The Department of Energy will release 15 million more barrels from the Strategic Petroleum Reserve and plans additional releases this winter.WASHINGTON — The United States plans to release millions of additional barrels of oil from the Strategic Petroleum Reserve in December and to make additional releases over the winter, White House officials said on Tuesday evening.The releases from the strategic reserve this year have been a dramatic step by the United States to contain its gasoline prices and stabilize energy prices around the world. The latest move comes three weeks ahead of the midterm elections and amid growing concern that inflation could worsen as winter approaches and the conflict in Ukraine drags on.Officials said the United States would release an additional 15 million barrels of oil from the reserve in December, exhausting the 180 million barrels that President Biden authorized to be sold earlier this year. The sales were intended to serve as a “wartime bridge” as domestic production in the United States ramps up, but White House officials said on Tuesday that Mr. Biden is prepared to authorize additional oil sales later this winter if needed.The reserve can hold about 700 million barrels of oil and has about 400 million remaining. White House officials say they intend to replenish the reserve when world oil prices decline to a range of $67 to $72 a barrel; they are now hovering around $90.Mr. Biden is expected to announce the plan on Wednesday. Officials said he would also call on refining companies not to gouge prices and to pass lower energy costs resulting from the oil releases onto consumers.Gas prices in the United States eased over the summer as the United States sold oil from the Strategic Petroleum Reserve and concerns about a global recession deepened. They have increased again in recent weeks after the Saudi-led OPEC Plus decided to scale back petroleum supplies on the market by up to two million barrels per day to bolster the price of oil.The move angered Mr. Biden, who said last week that “there will be consequences” for Saudi Arabia’s decision.The White House has faced criticism from Republicans for depleting the strategic reserve ahead of the midterm elections, even as Republicans have made the specter of rising gas prices a central campaign theme.“Draining our emergency supplies is a shortsighted and dangerous choice that imperils our energy security at a critical time of global uncertainty,” Senator Jerry Moran, Republican of Kansas, said last week.The Biden administration has defended the decision, insisting that all Americans benefit from lower gas prices and that energy prices around the world are elevated because of Russia’s war in Ukraine.“President Biden has said for months how he is committed to doing everything that he can, in his power, to address Putin’s price hike,” Karine Jean-Pierre, the White House press secretary, said on Tuesday. “Should the president not do everything that he can to lower prices?” More
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As Europe Piles Sanctions on Russia, Some Sacred Cows Are Spared
The European Union has been severing economic ties with Moscow to support Ukraine, but some countries have lobbied to protect key sectors.BRUSSELS — Eight months into the war in Ukraine, and eight rounds of frantic negotiations later, Europe’s sanctions against Russia run hundreds of pages long and have in many places cut to the bone.Since February, the European Union has named 1,236 people and 155 companies for sanctions, freezing their assets and blocking their access to the bloc. It has banned the trade of products in nearly 1,000 categories and hundreds of subcategories. It has put in place a near-total embargo on Russian oil. About one-third of the bloc’s exports to Russia by value and two-thirds of imports have been banned.But even now some goods and sectors remain conspicuously exempted. A look at just a few items reveals the intense back-room bargaining and arm-twisting by some nations and by private industry to protect sectors they deem too valuable to give up — as well as the compromises the European Union has made to maintain consensus.The Belgians have shielded trade in Russian diamonds. The Greeks ship Russian oil unimpeded. France and several other nations still import Russian uranium for nuclear power generation.The net impact of these exemptions on the effectiveness of Europe’s penalties against Russia is hard to assess, but politically, they have allowed the 27 members of the bloc to pull together an otherwise vast sanctions regime with exceptional speed and unanimity.“Ultimately, this is the price of unanimity to hold together this coalition, and in the grander scheme of things the sanctions are really working,” said Jacob Kirkegaard, a senior fellow in the Brussels office of the research group the German Marshall Fund, citing Russia’s diminished access to military technology as evidence.A Lukoil gas station in Priolo Gargallo, Italy, last month. The European Union has put in place a near-total embargo on Russian oil, but some sectors of trade remain conspicuously exempt from sanctions.Gianni Cipriano for The New York Times“We would love to have everything included, diamonds and every other special interest hit, but I am of the opinion that, if sparing them is what it takes to keep everyone together, so be it,” he added.The Ukrainian government has criticized some of the exemptions, with President Volodymyr Zelensky chiding European nations for continuing to permit business with Russia, saying they are skirting sacrifices.“There are people for whom the diamonds sold in Antwerp are more important than the battle we are waging. Peace is worth much more than diamonds,” Mr. Zelensky said to the Belgian Parliament during an address by video link in late March.Keeping Diamonds ComingThe continued success of Belgium and the broad diamond sector in keeping the Russian diamond trade flowing exemplifies the sacred cows some E.U. nations refuse to sacrifice, even as their peers accept pain to punish the Kremlin.Exports of rough diamonds are very lucrative for Russia, and they flow to the Belgian port of Antwerp, a historically important diamond hub.The trade, worth 1.8 billion euros a year — about $1.75 billion — has been shielded in consecutive rounds of the bloc’s sanctions, despite being raised as a possible target soon after the Russian invasion of Ukraine in late February.The Belgian government has said that it has never asked the European Commission, the E.U. executive body that drafts the measures, to remove diamonds from any sanctions list and that if diamonds were added, it would go along.Diamonds being sorted in Mirny, Russia, at a facility operated by Alrosa, the Russian state-owned diamond company. Russian diamonds have been shielded in consecutive rounds of European sanctions.Maxim Babenko for The New York TimesTechnically speaking, that may be true. But the latest round of penalties, adopted this month, exposed the intensive interventions when a coordination error occurred among the various services in the bloc that are involved in the technical preparation of sanctions.The incident, described to The New York Times by several diplomats involved as “farcical,” shows how the lobbying works. The diplomats spoke anonymously in order to describe freely what happened.The European Commission over the course of September prepared the latest round of sanctions and left diamonds off that list.But the European External Action Service — the E.U.’s equivalent of a foreign service or state department, which works with the commission to prepare sanctions — did not get the memo that diamonds should remain exempted and included in its own draft listings Alrosa, the Russian state-owned diamonds company.Once Alrosa had been put on the draft document, removing it became difficult. Spotting the error, Poland and other hard-line pro-Ukraine countries in the bloc dragged out the negotiations over the package as much as they could on the basis that Alrosa should indeed face sanctions.In the end, the need for unanimity and speed prevailed, and Alrosa continues to export to the European Union, at least until the next round of sanctions is negotiated. In proposals for a fresh, ninth round of sanctions, presented by Poland and its allies last week, diamonds were again included, but formal talks on the new set of penalties have not yet begun.A spokesman for the European External Action Service declined to comment, saying it does not comment on internal procedures involved in preparing sanctions.The Tricastin nuclear power plant in the Drôme region of southeastern France. France is one of several E.U. countries that depend on Russian uranium to operate civil nuclear power facilities. Andrea Mantovani for The New York TimesNuclear PowerMost exemptions have not been as clear-cut as diamonds because they have involved more complex industries or services, or affected more than one country.Uranium exported from Russia for use in civil nuclear power production falls under this category. Nuclear power plants in France, Hungary, Slovakia, Finland and other countries depend on Russian civilian uranium exports.The trade is worth 200 million euros, or about $194 million, according to Greenpeace, which has been lobbying for its ban. Germany and other E.U. countries have supported the calls to ban civilian nuclear imports from Russia, making this another issue likely to come up in the next round of sanctions talks.In August, Mr. Zelensky also highlighted the persistent protection of the Russian nuclear exports to Europe just as Ukraine’s Zaporizhzhia nuclear power plant came under fire.Some supporters of keeping Russian uranium running say that France and the other countries’ ability to generate electricity by operating their nuclear power plants during an acute energy crisis is more important than the political or financial gains that could come from a ban through E.U. sanctions, at least for now.Tankers in the NightOne of the most complex and important lobbying efforts to protect a European industry from sanctions is the one mounted by Greek diplomats to allow Greek-owned tankers to transport Russian oil to non-European destinations.This has facilitated one of the Kremlin’s biggest revenue streams. More than half of the vessels transporting Russia’s oil are Greek-owned, according to information aggregated from MarineTraffic, a shipping data platform.Supporters of the Greek shipping industry say that if it pulled out of that business, others would step in to deliver Russian oil to places like India and China. Experts say lining up enough tankers to make up for a total Greek pullout would not be simple, considering the sheer size of Greek-interest fleets and their dominance in this trade.According to European diplomats involved in the negotiations, their Greek counterparts were able to exempt Greek shipping companies from the oil embargo in a tough round of talks last May and June.Since then, the E.U. has come around to a United States-led idea to keep facilitating the transport of Russian oil, in order to avert a global oil-market meltdown, but to do so at a capped price to limit Russia’s revenues.The Greeks saw an opening: They would continue to transport Russian oil, but at the capped price. The bloc offered them additional concessions, and Greece agreed that the shipping of Russian oil would be banned if the price cap was not observed.The Greek-flagged oil tanker Minerva Virgo. Greek diplomats have lobbied for Greek-owned tankers to be allowed to transport Russian oil to non-European destinations. Bjoern Kils/ReutersEven if the economic benefits of such exemptions are hard to define, from a political perspective, the continued protection of some goods and industries is creating bad blood among E.U. members.Governments that have readily taken big hits through sanctions to support Ukraine, sacrificing revenues and jobs, are embittered that their partners in the bloc continue to doggedly protect their own interests.The divisions deepen a sense of disconnect between those more hawkish pro-Ukraine E.U. nations nearer Ukraine and those farther away, although geographical proximity is far from the only determinant of countries’ attitudes toward the war.And given that the bloc is a constant negotiating arena on many issues, some warn that what goes around eventually will come around.“This may be a raw calculation of national interests, but it’s going to linger,” Mr. Kirkegaard said. “Whoever doesn’t contribute now through sacrifice, next time there’s a budget or some other debate, it’s going to come back and haunt them.” More
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French Refineries Strike May Presage a Winter of Discontent for Europe
Bitten by inflation, workers are demanding a greater share of the surging profits of energy giants. It’s the kind of unrest leaders fear as they struggle to keep a united front against Russia.LE HAVRE, France — The northern port city of Le Havre is less than 25 miles away from two major oil refineries. But on Friday, the pumps at many gas stations were wrapped in red and white tape, the electric price signs flashing all nines. Little gasoline was to be had.Across France, a third of stations are fully or partly dry, victims of a fast-widening strike that has spread to most of the country’s major refineries, as well as some nuclear plants and railways, offering a preview of a winter of discontent as inflation and energy shortages threaten to undercut Europe’s stability and its united front against Russia for its war in Ukraine.At the very least the strike — pitting refinery workers seeking a greater share of the surging profits against the oil giants TotalEnergies and Exxon Mobil — has already emerged as the first major social crisis of Emmanuel Macron’s second term as president, as calls grow for a general strike next Tuesday.“It’s going to become a general strike. You will see,” said Julien Lemmonier, 77, a retired factory worker stepping out of the supermarket in Le Havre on a gray and rainy morning. He warned that if the port workers followed suit, “It will be over.”Striking employees of the Total refinery on Thursday.Andrea Mantovani for The New York TimesThe widening social unrest is just what European leaders fear as inflation hits its highest level in decades, driven in part by snarls in post-pandemic global supply chains, but also by the mounting impact of the tit-for-tat economic battle between Europe and Russia over its invasion of Ukraine.Economic anxiety is palpable across Europe, driving large protests in Prague, Britain’s biggest railway strike in three decades, as well as walkouts by bus drivers, call center employees and criminal defense lawyers, and causing many governments to introduce relief measures to cushion the blow and ward off still more turbulence. Airline workers in Spain and Germany went on strike recently, demanding wage increases to reflect the rising cost of living.For France the strikes have touched a long-worn nerve of the growing disparity between the wealthy few and the growing struggling classes, as well as the gnawing worry about making ends meet in the cold winter ahead.Workers at half of the country’s eight refineries are continuing to picket for higher wages in line with inflation, as well as a cut of the sky-high profits their companies made over recent months, as the price of gasoline has surged.“The money exists, and it should be distributed,” said Pascal Morel, the regional head of Confédération Générale du Travail, or CGT, France’s second-largest union, which has been leading the strikes. “Rather than laying claim to the striking workers, we should lay claim to their profits.”Pascal Morel, the regional head of Confédération Générale du Travail, one of France’s largest unions, which has been leading the strikes. Andrea Mantovani for The New York TimesSlow to notice at first, the country was rudely awoken to the strike’s effect this week, when pumps across the country ran out of fuel, forcing frustrated motorists to hunt around and then line up — sometimes for hours — at stations that were still open. Nerves quickly frayed, and reports of fistfights between enraged drivers buzzed on the news.In Le Havre, as in the rest of the country, residents revealed mixed feelings about the strikes. Some expressed solidarity with the workers, while others complained about how a small group was holding the entire country hostage. On both sides of the divide, however, many feared the strike would spread.The State of the WarA Large-Scale Strike: President Vladimir V. Putin of Russia unleashed a series of missile strikes that hit at least 10 cities across Ukraine, including Kyiv, in a broad aerial assault against civilians and critical infrastructure that drew international condemnation and calls for de-escalation.Crimean Bridge Explosion: Mr. Putin said that the strikes were retaliation for a blast that hit a key Russian bridge over the weekend. The bridge, which links the Crimean Peninsula to Russia, is a primary supply route for Russian troops fighting in the south of Ukraine.Pressure on Putin: With his strikes on civilian targets in Ukraine, Mr. Putin appears to be responding to his critics at home, momentarily quieting the clamors of hard-liners furious with the Russian military’s humiliating setbacks on the battlefield.Arming Ukraine: The Russian strikes brought new pledges from the West to send in more arms to Ukraine, especially sophisticated air-defense systems. But Kyiv also needs the Russian-style weapons that its military is trained to use, and the global supply of them is running low.“It’s going to bring France to a standstill and I assure you it doesn’t need that,” said Fatma Zekri, 54, an out-of-work accountant.On Thursday, workers echoed the call for a general strike next Tuesday originally issued by the CGT and later supported by three other large unions. And a long-planned protest by left-wing parties over the rising cost of living scheduled for Sunday threatens to become even larger.For Mr. Macron, the strike holds obvious perils, with echoes of the social unrest of the Yellow Vest movement — a widespread series of protests that started as a revolt against higher taxes on fuel. The movement may have dissipated, but its anger has not.In Le Havre, residents revealed mixed feelings about the strikes. Some expressed solidarity with the workers, while others complained about how a small group was holding the entire country hostage.Andrea Mantovani for The New York TimesThe protests paralyzed France for months in 2018 and 2019, led by lower-middle class workers who took to the streets and roundabouts, raging against a climate change tax on gas that they felt was an insulting symbol of how little the government cared about them and their sliding quality of life.The current strikes illustrated a longstanding question that continues to torment many in the country, said Bruno Cautrès, a political analyst at the Center for Political Research at Sciences Po University — “Why do I live in a country that is rich and I am struggling?”Speaking of the president, Mr. Cautrès said, “He has not managed to answer this simple question.”After winning his re-election last April, Mr. Macron promised he would shed his reputation as a top-down ruler and govern the country in a more collaborative way.“The main risk is that he will not succeed in convincing people that the second term is dedicated to dialogue, to easing tensions,” Mr. Cautrès said.But even as he faced criticism that his government had allowed the crisis to get to this point, Mr. Macron sounded defiant on Wednesday night, saying in an interview with the French television channel France 2 that it was “not up to the president of the republic to negotiate with businesses.”The Total refinery, shuttered during a strike by workers.Andrea Mantovani for The New York TimesHis government has already forced some workers back to a refinery near Le Havre and a depot near Dunkirk.“I can’t believe that for one second, our ability to heat our homes, light our homes and go to the gas pump would be put at risk by French people who say, ‘No, to protect my interests, I will compromise those of the nation,’” he said.Still, Mr. Macron is treading a very fine line. The issue of “super profits” has become a charged one in Parliament, with opposition lawmakers from both the left and right demanding companies reaping windfalls be taxed, to benefit the greater population.Over the first half of the year, TotalEnergies made $10 billion in profit and Exxon Mobil raked in $18 billion. Western oil and gas companies have generated record profits thanks to booming energy prices, which have risen because of the war in Ukraine and allowed Russia to rake in billions in revenues even as it cuts oil and gas supplies to Europe. A recent OPEC Plus deal involving Saudi Arabia and Russia to cut production is likely to further raise prices.Earlier this week, Exxon Mobil announced that it had come to an agreement with two of four unions working at its sites, “out of a desire to urgently and responsibly to put an end to the strikes.” But the wage increase was one percentage point less than CGT had demanded, and half the bonus.In its own news release, TotalEnergies said the company continued to aim for “fair compensation for the employees” and to ensure they benefited “from the exceptional results generated” by the company.On Friday, two unions at TotalEnergies announced they had reached a deal for a 7 percent wage increase and a bonus. But CGT, which has demanded a 10 percent hike, walked out of the negotiation and said it would continue the strike.To date, Mr. Macron has been loath to tax the oil giants’ windfall profits, worrying it would tarnish the country’s investment appeal, and preferring instead that companies make what he termed a “contribution.”However, last week the government introduced an amendment to its finance bill, in keeping with new European Union measures, applying a temporary tax on oil, gas and coal producers that make 20 percent more in profit on their French operations than they did during recent years.On Thursday, France’s Finance Minister Bruno Le Maire also called on TotalEnergies to raise wages for salaried workers. And he announced that 1.7 billion euros, about $1.65 billion, would be earmarked to help motorists if fuel prices continued to rise.“It is a company that is now making significant profits,” Mr. Le Maire told RTL radio station on Thursday. “Total has paid dividends, so the sharing of value in France must be fair.”The pumps at gas stations were wrapped in red and white tape, the electric price signs flashing all nines. Andrea Mantovani for The New York TimesThe tangle of pipes and towering smokestacks of the hulking Total refinery in Gonfreville-l’Orcher, just outside of Le Havre, were eerily silent on Thursday, as union members burned wood pallets, hoisted flags and voted to continue the strike.Many believed their anger captured a building sentiment in the country, where even with generous government subsidies, people are struggling financially and are increasingly anxious about the winter of energy cutbacks. Inflation in France, though lower than in the rest of Europe, has surpassed 6 percent, jacking the prices of some basic supplies like frozen meat, pasta and tissues.“This era must end — the era of hogging for some, and rationing for others,” François Ruffin told the protesters on Thursday. Mr. Ruffin, a filmmaker turned elected official with the country’s hard-left France Unbowed party, rose to prominence with his satirical documentary film about France’s richest man, Bernard Arnault, and the loss of middle-class jobs to globalization.If anything should be requisitioned, it should be the profits of huge companies, not workers, many said at the protest sites.David Guillemard, a striker who has worked at the Total refinery for 22 years, said the back-to-work order had kicked a hornet’s nest. “Instead of calming people,” he said, “this has irritated them.” More
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Biden to ‘Re-Evaluate’ Relationship With Saudi Arabia After Oil Production Cut
Angered by the kingdom’s decision to team up with Russia to slash petroleum output, the president signaled openness to retaliatory measures proposed in Congress, including a halt to arms sales and a new antitrust measure.President Biden is re-evaluating the relationship with Saudi Arabia after it teamed up with Russia to cut oil production in a move that bolstered President Vladimir V. Putin’s government and could raise American gasoline prices just before midterm elections, a White House official said on Tuesday.“I think the president’s been very clear that this is a relationship that we need to continue to re-evaluate, that we need to be willing to revisit,” the official, John F. Kirby, the strategic communications coordinator for the National Security Council at the White House, said on CNN. “And certainly in light of the OPEC decision, I think that’s where he is.”Mr. Kirby signaled openness to retaliatory measures proposed by Democratic congressional leaders outraged by the oil production cut announced last week by the international cartel known as OPEC Plus. Among other things, leading Democrats have proposed curbing American security cooperation with Saudi Arabia, including arms sales, and stripping OPEC members of their legal immunity so they can be sued for violations of American antitrust laws.“The president’s obviously disappointed by the OPEC decision and is going to be willing to work with Congress as we think about what the right relationship with Saudi Arabia needs to be going forward,” Mr. Kirby said. He sounded a note of urgency. “The timeline’s now and I think he’s going to be willing to start to have those conversations right away,” he said. “I don’t think this is anything that’s going to have to wait or should wait quite frankly for much longer.”The comments came just a day after Senator Bob Menendez, Democrat of New Jersey and chairman of the Senate Foreign Relations Committee, assailed Saudi Arabia for effectively backing Russia in its brutal invasion of Ukraine and called for an immediate freeze on “all aspects of our cooperation with Saudi Arabia,” vowing to use his power to block any future arms sales.The Biden PresidencyWith midterm elections approaching, here’s where President Biden stands.Diplomatic Limits: OPEC’s decision to curb oil production has exposed the failure of President Biden’s fist-bump diplomacy with the crown prince of Saudi Arabia.Defending Democracy: Mr. Biden’s drive to buttress democracy at home and abroad has taken on more urgency by the persistent power of China, Russia and former President Donald J. Trump.A Tricky Message: Even as he condemns Trumpism, Mr. Biden has taken pains to show that he understands that not all Republicans are what he calls extremist “MAGA Republicans.”Questions About 2024: Mr. Biden has said he plans to run for a second term, but at 79, his age has become an uncomfortable issue.“There simply is no room to play both sides of this conflict — either you support the rest of the free world in trying to stop a war criminal from violently wiping off an entire country off of the map, or you support him,” Mr. Menendez said. “The Kingdom of Saudi Arabia chose the latter in a terrible decision driven by economic self-interest.”Senator Dick Durbin of Illinois, the second-ranking Democrat in the Senate, said on Tuesday morning that Saudi Arabia clearly wanted Russia to win the war in Ukraine. “Let’s be very candid about this,” he said on CNN. “It’s Putin and Saudi Arabia against the United States.”.css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-ok2gjs{font-size:17px;font-weight:300;line-height:25px;}.css-ok2gjs a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Mr. Biden’s willingness to consider retaliatory measures represents a marked shift for a president who had sought to improve relations with Saudi Arabia in recent months and reflected deep anger in the White House about the decision last week by the Saudi-led OPEC Plus group to cut oil production by up to two million barrels a day.The president absorbed withering criticism for visiting Saudi Arabia in July and giving a fist bump to its crown prince, Mohammed bin Salman, despite a campaign promise to make the kingdom an international “pariah” for the killing of the Saudi journalist Jamal Khashoggi, a columnist for The Washington Post and a resident of the United States. The C.I.A. has determined that Prince Mohammed ordered the operation that led to the murder and dismemberment of Mr. Khashoggi in 2018.Overcoming his own reservations, Mr. Biden went along with advisers who argued that it was worth the political hit to restore ties with Saudi Arabia for a variety of reasons, including the need to bolster energy markets given the effort to isolate Russia, one of the biggest oil producers in the world. While no specific announcements were made during his visit to Jeddah in July, American officials said at the time that they had an understanding with Saudi Arabia that it would increase oil production in the fall and thus lower gasoline prices heading into the crucial congressional elections.The Saudi decision to do the opposite last week in defiance of American entreaties was a blow to Mr. Biden and opened him up to further criticism even from fellow Democrats who argued that Saudi Arabia should be punished. Three House Democrats announced legislation requiring the removal of American troops and defensive systems from Saudi Arabia and the United Arab Emirates.After falling for more than three months, gas prices are rising again, increasing by 12 cents a gallon on average over the last week to $3.92, according to AAA, although they remain far below the June peak of just over $5. The White House was counting on dropping gas prices to buttress Democratic efforts to keep control of both houses of Congress in the Nov. 8 election.The anger at Saudi Arabia in Washington was exacerbated in the last couple of days by Russia’s latest airstrikes against civilian targets across Ukraine. Democrats increasingly framed the dispute with Saudi Arabia less in terms of concern over domestic gas prices in a campaign season and more about the kingdom’s willingness to aid Mr. Putin’s aggression. More
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Gas Prices in U.S. Rise Amid West Coast Refinery Shutdowns
The gains could raise pressure on policymakers, but analysts say the higher prices may be short-lived as refineries in California and Washington restart production.Gasoline prices in the United States are creeping higher, reversing a monthslong streak of declines and chipping away at a potent talking point for the Biden administration, which had been emphasizing its success at easing pressure on drivers since the summer.Though the uptick has followed a rise in crude oil prices, analysts pointed to two new factors that are also pushing gasoline higher — a loss of refining capacity in California and Ohio, and rising demand in recent weeks.The national average price of regular gasoline stood at $3.891 a gallon on Friday, climbing for more than two weeks, according to data from AAA. That’s lower than the record of about $5.02 reached in June but still higher than usual for this time of year.Prices have made a particularly big leap in California. At about $6.39 a gallon, prices are close to the state’s June record of $6.44. Gas prices there and in other Western states, including Nevada and Arizona, jumped after several refineries in the region closed for maintenance.The rise, should it last, could increase pressure on the White House to act quickly to bring prices back down. A spike in gas prices, which followed a surge in crude oil and other energy costs after Russia’s invasion of Ukraine, became both a political liability and a policy headache as consumer prices rose across the board.The State of the 2022 Midterm ElectionsWith the primaries over, both parties are shifting their focus to the general election on Nov. 8.Standing by Herschel Walker: After a report that the G.O.P. Senate candidate in Georgia paid for a girlfriend’s abortion in 2009, Republicans rallied behind him, fearing that a break with the former football star could hurt the party’s chances to take the Senate.Wisconsin Senate Race: Mandela Barnes, the Democratic candidate, is wobbling in his contest against Senator Ron Johnson, the Republican incumbent, as an onslaught of G.O.P. attack ads takes a toll.G.O.P. Senate Gains: After signs emerged that Republicans were making gains in the race for the Senate, the polling shift is now clear, writes Nate Cohn, The Times’s chief political analyst.Democrats’ Closing Argument: Buoyed by polls that show the end of Roe v. Wade has moved independent voters their way, vulnerable House Democrats have reoriented their campaigns around abortion rights in the final weeks before the election.President Biden, who over the summer responded to the increase in gas prices by chiding energy companies for profiteering on consumers, released oil from strategic reserves and encouraged Saudi Arabia to produce more oil. Gas prices eventually started to decline, as global oil prices tumbled amid rising concern about the slowing global economy and demand eased.As the streak of declines stretched to 98 days, the White House regularly pointed to the drop and the savings it would offer to drivers.The recent jump means White House officials have been pressed to address the issue again. Brian Deese, the director of the National Economic Council, said on Thursday that energy companies needed to lower prices at the pump.“If you look at the gap between wholesale and retail prices, it has come down,” he said during a press briefing. “It hasn’t come down enough — right? — but it has come down.”Analysts say the refinery shutdowns will be temporary, and the fact that Americans tend to drive less in the winter could keep prices from climbing as sharply as they did in June. But a recent rebound in crude oil prices, which rose nearly 17 percent this week as the world’s major oil producers agreed to cut production, means predicting what’s next will be difficult.“This is not the Biden administration’s fault, but they know that if gas prices are back at $4.50 on Election Day, they’re in trouble,” said Tom Kloza, a founder of Oil Price Information Service, a price reporting agency, referring to the November midterm elections.Aside from the political consequences, a sustained rise in gas prices could affect how businesses and consumers view the economy. In July, falling gas prices were a key part of the better-than-expected reading of the Consumer Price Index, offering a brief glimmer of hope to those looking for signs that inflation has peaked.Among the West Coast refineries that have shut down is one in Washington State run by Phillips 66 and two near San Francisco that are run by Valero and Chevron. Not every shutdown is predictable. A fire at a BP-owned refinery near Toledo, Ohio, shuttered that facility in September. It may not reopen until early 2023, Bloomberg News reported late last month, citing unnamed sources. In Ohio, the average price of gas rose to $3.939 a gallon on Friday from $3.609 a month earlier.Chevron and Phillips 66 said they do not comment on the day-to-day operations of their refineries. BP and Valero didn’t immediately respond to questions about the refineries. The refineries do not typically release much detail about closings or when they expect to reopen, analysts said.Prices in California and other states have fallen slightly since Gov. Gavin Newsom said last week that the state could start producing its winter blend of gasoline early, which is cheaper for refiners to produce since it contains fewer of the additives that protect against environmental conditions in the summer. The introduction of the winter blend, paired with the potential for slowed demand in fall and winter driving seasons, could help bring prices back down, said Devin Gladden, a spokesman for AAA.On Friday, Mr. Newsom said on Twitter that he would call a special session of the California Legislature to weigh “a windfall profits tax” on energy companies that are profiting from high prices, a move that some Democratic lawmakers in Washington have also called for. Britain announced a similar tax on the “extraordinary” profits of oil companies in May.On Wednesday, the group known as OPEC Plus, which includes Saudi Arabia and Russia, said that it would slash oil production by two million barrels a day, a decision that drew an immediate condemnation from the Biden administration. On Thursday, Mr. Biden told reporters that he was “disappointed” by the decision, and the White House also said it would release more oil from the Strategic Petroleum Reserve, the country’s stockpile of crude oil.Though oil prices have climbed sharply this week, the recent increase in gas prices began in September, well before the OPEC Plus decision.The overall impact of the announcement remains “a big maybe,” Mr. Gladden said. It could lead to a short-term rise in prices, but whether or not it is sustained depends on how energy investors react to the cut, he said. Analysts have noted that several OPEC Plus members are already unable to meet production quotas.Crude oil prices account for more than half of the cost of gasoline. The price of West Texas Intermediate crude oil, the U.S. benchmark stood at about $93 a barrel on Friday, well below its peak of $130 in March but still up more than 23 percent since the beginning of the year.“This really hasn’t been about crude,” Mr. Kloza, the Oil Price Information Service founder, said of the most recent gain. “It’s been about the inability to refine a lot of that crude for various reasons.”Mr. Kloza said he did not think an “extraordinary spike” in prices was ahead, particularly one comparable to what consumers experienced earlier in the year. Still, prices are subject to several variables — many of which, including hurricanes or wildfires that lead to major refinery shutdowns, are unpredictable.“If we lost one of these big refineries that can run 500,000 barrels a day of crude or more, it can really haunt the markets,” Mr. Kloza said. More
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Biden’s Choice After OPEC Cuts: Woo Saudi Arabia, or Retaliate?
The announcement by the Saudi-led OPEC Plus energy cartel that it would slash oil production was widely seen in Washington as a stab in the back of President Biden.WASHINGTON — President Biden faces a dicey choice following the decision by the world’s oil giants to slash production just weeks before critical midterm elections that could turn on the price of gasoline: Should he stick with his policy of wooing Saudi Arabia or take measures to retaliate?The announcement by the Saudi-led OPEC Plus energy cartel that it would pump two million fewer barrels a day was widely seen in Washington as a stab in the back of Mr. Biden, who just three months ago jettisoned his vow to make Saudi Arabia a “pariah” and traveled there to court the kingdom’s autocratic crown prince.The question now confronting Mr. Biden is what to do about this seeming betrayal. In intentionally bland comments, he told reporters on Thursday only that he was “disappointed” and considering unspecified “alternatives.” But fellow Democrats, frustrated by what they see as the president’s excessive deference to the Saudis and eager to demonstrate toughness before their constituents head to the polls, increased pressure on Mr. Biden to punish Riyadh.“He should just start withdrawing stuff,” Representative Tom Malinowski, Democrat of New Jersey, said in an interview, referring to the American military presence in Saudi Arabia. “That would get their attention. Action for action. Call their bluff. Do they really think they can trade their American security partner for a Russian security partner or a Chinese security partner? They know they can’t do that.”Senator Chuck Schumer of New York, the majority leader, said Saudi Arabia’s decision to ally with President Vladimir V. Putin’s Russia to shore up oil prices was a grave mistake.“What Saudi Arabia did to help Putin continue to wage his despicable, vicious war against Ukraine will long be remembered by Americans,” he said. “We are looking at all the legislative tools to best deal with this appalling and deeply cynical action.”Mr. Biden gave little indication of how far he would go.Asked about the production cut on Thursday, Mr. Biden said that “we are looking at alternatives” to oil from OPEC Plus countries. “We haven’t made up our minds yet,” he said.His administration counseled caution, holding out hope that at the end of the day, the cut in daily production would in reality amount to maybe half of the two million barrel goal because some oil producers were already not meeting their targets. Rather than penalizing Saudi Arabia, Biden aides appeared focused more on countering its move by releasing more oil from the Strategic Petroleum Reserve and possibly seeking rapprochement with oil-pumping Venezuela.“We are looking at alternatives” to oil from OPEC Plus countries, President Biden said on Thursday, adding, “We haven’t made up our minds yet.”Doug Mills/The New York TimesThe administration also appeared to be considering moves to pressure domestic energy companies to reduce retail prices, possibly including limits on the export of petroleum products. “We’re not announcing any steps on that front, but there are measures that we will continue to assess,” Brian Deese, the president’s national economic adviser, told reporters.The OPEC Plus decision could hardly have come at a worse time politically for Mr. Biden, who had staked his argument for the midterm campaign in part on falling gas prices. Ron Klain, the White House chief of staff, has methodically tracked the price at the pump for months as it has declined, and Democrats felt renewed momentum as a result.The State of the 2022 Midterm ElectionsWith the primaries over, both parties are shifting their focus to the general election on Nov. 8.Standing by Herschel Walker: After a report that the G.O.P. Senate candidate in Georgia paid for a girlfriend’s abortion in 2009, Republicans rallied behind him, fearing that a break with the former football star could hurt the party’s chances to take the Senate.Democrats’ Closing Argument: Buoyed by polls that show the end of Roe v. Wade has moved independent voters their way, vulnerable House Democrats have reoriented their campaigns around abortion rights in the final weeks before the election.G.O.P. Senate Gains: After signs emerged that Republicans were making gains in the race for the Senate, the polling shift is now clear, writes Nate Cohn, The Times’s chief political analyst.Trouble for Nevada Democrats: The state has long been vital to the party’s hold on the West. Now, Democrats are facing potential losses up and down the ballot.But gas prices had already begun inching back up even before the Saudi-led move, in part because of refinery issues on the West Coast and in the Midwest. The national average rose by seven cents to $3.86 since Monday as demand increased and stocks fell, although it remained far below the peak topping $5 a gallon in June.The Saudis maintain that the production cut was not meant as a shot at Mr. Biden and have sent papers and charts to administration officials justifying it. With the price of oil falling just below $80 a barrel in recent days, the Saudis told American officials that they worried it would slide further into the $70s and possibly the $60s, making their own energy-dependent budget unsustainable..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-ok2gjs{font-size:17px;font-weight:300;line-height:25px;}.css-ok2gjs a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Biden administration officials fear the real crisis might come in December when a price cap organized by the United States to restrict Russian oil profits goes into effect and a European Union ban on the purchase of Russian crude is set to begin.Mr. Biden’s options to counter the production cut are limited and carry trade-offs. He has already ordered more oil to be released from the Strategic Petroleum Reserve, but since the reserve is now at its lowest level in four decades, that risks shortages in case of war or a natural disaster like another hurricane.He could push to limit exports of processed fuels like gasoline and diesel, which would expand supplies and lower prices domestically. But that would harm trading partners, particularly the European allies attempting to wean themselves off Russian energy and amplify global inflationary pressures.The administration could open more federal lands and waters to drilling and soften regulations on drilling, exploration and pipeline laying to increase domestic production, although that could incite a backlash among environmentalists.“They need to loosen regulations, they need to release all those permits sitting on someone’s desk for drilling on federal lands, and they need to allow the Keystone XL pipeline to come down to deliver the Canadian oil sands to American consumers,” said Darlene Wallace, a board member of the Oklahoma Energy Producers Alliance. “And the president needs to encourage investors to invest in the oil business.”Easing sanctions on Iran and Venezuela could free up more than a million barrels of oil a day, which would help lower prices and potentially replace some of the Russian barrels now sold to Chinese and Indian refineries. But nuclear talks with Iran have stalled with scant hope of a breakthrough, and the prospects of a deal with Venezuela are murky.Prince Abdulaziz bin Salman, the Saudi energy minister, at the OPEC Plus meeting on Wednesday. The Saudis have said they are worried about further drops in oil prices making their energy-dependent budget unsustainable.Christian Bruna/EPA, via ShutterstockThe Wall Street Journal has reported that the Biden administration was preparing to scale down sanctions to allow Chevron to resume pumping in exchange for a move toward elections in 2024. But in a statement, the White House emphasized that “there are no plans to change our sanctions policy without constructive steps from the Maduro regime.”In brief comments with reporters on Thursday, Mr. Biden did not deny a possible change toward Venezuela. “There’s a lot of alternatives,” he said. “We haven’t made up our mind yet.” Asked what Venezuela would have to do to persuade the United States to ease sanctions, Mr. Biden said, “A lot.”The president defended his decision to travel in July to Saudi Arabia, where he exchanged a fist bump with its de facto ruler, Crown Prince Mohammed bin Salman, despite a campaign pledge to isolate the kingdom for the killing of Jamal Khashoggi, a Saudi journalist and United States resident killed on what the C.I.A. said were Prince Mohammed’s orders.While not formally announced, American officials said privately at the time that they had an understanding that Saudi Arabia and other energy powers would ramp up production by fall.But Mr. Biden insisted again on Thursday that he had other goals in going to Saudi Arabia, such as encouraging diplomatic relations with Israel.“The trip was not essentially for oil,” the president said. “The trip was about the Middle East and about Israel and rationalization of positions.”“But it is a disappointment,” he added about the production cut, “and it says that there are problems.”Mr. Malinowski and other Democrats said the president should go further than just expressing disappointment. He introduced a bill with Representatives Sean Casten and Susan Wild, Democrats from Illinois and Pennsylvania, requiring the removal of American troops and defensive systems from Saudi Arabia and the United Arab Emirates.The bill was more a statement than anything else since Congress is out of session until the election, but Mr. Malinowski said he patterned it after a similar measure introduced by Republicans in 2020 and used by President Donald J. Trump to pressure Saudi Arabia to decrease production at a time when low oil prices were a concern.Mr. Malinowski said Mr. Biden should similarly use the legislation to push the Saudis. “The point of our bill is to give him the ammunition he needs. I hope he uses it,” Mr. Malinowski said. “He took a risk. He put himself out there for this relationship, and this is not how a friend should respond. So maybe they should find some new friends.”Clifford Krauss More
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Is It the Gas Prices, Stupid?
A simpler explanation for a Democratic turnaround.Democratic fortunes have improved markedly over the last few months, with the party overtaking Republicans on the generic congressional ballot in the aftermath of the Supreme Court’s decision to overturn Roe v. Wade.But there’s another, simpler explanation for a Democratic turnaround, one that lines up nearly as well as abortion: gas prices.The price of gas fell for 98 straight days beginning June 14 — 10 days before the court’s Dobbs decision on Roe. At the time, the average price of gas nationally was over $5 per gallon. Prices were at $3.67 by the end of the streak.While few would dispute that the Dobbs decision helped energize Democratic voters, it seems clear that falling gas prices have helped as well. After all, voters say that the economy and inflation — not abortion — are the most important issues facing the country. There’s a longstanding relationship between economic performance and the president’s standing. As James Carville once said: It’s the economy, stupid.So is it the gas prices, stupid? It’s hard not to wonder after looking at this chart by my colleague Francesca Paris.Tracking Biden’s approval and gas prices More
