The Hill’s Morning Report — OPEC stiff arms Biden

by Alexis Simendinger and Kristina Karisch - 10/06/22 6:35 AM ET

Bad news for petroleum and energy prices in the West.

The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday agreed to steep cuts in oil production, which means less supply in an already tight market. That, in turn, means customers are likely to pay more.

Saudi Arabia, the group’s de facto leader, said the cut of 2 million barrels per day — which equals 2 percent of the global oil supply — was “necessary to respond to rising interest rates in the West and a weaker global economy” (Reuters).

The Saudi government denied any collusion with petroleum ally Russia when deciding on the cuts, an amount that could drive oil and gas prices back up after weeks of decline and thereby buoy Russia’s oil market amid the West’s punishing sanctions.

President Biden and his team on Wednesday challenged big oil companies, OPEC, Russia and just about any entity seen as contributing to higher energy costs at a time when U.S. inflation is both an economic problem and a political weapon (The Hill). The White House issued a statement criticizing OPEC’s decision and voicing Biden’s “disappointment.”

In July after a controversial meeting with Saudi Crown Prince Mohammed bin Salman, the president boasted that Saudi Arabia “shared” the urgency of the United States to increase oil supply, “which I expect will happen,” Biden said at the time. He attracted criticism for the trip and failed to get what he wanted.

White House national security adviser Jake Sullivan, joined by Biden economic adviser Brian Deese, modified a message on Wednesday.

“At a time when maintaining a global supply of energy is of paramount importance, this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices,” they said (The Hill).

Biden’s eagerness to see the global cartel’s production of fossil fuels rise stirs political friction among progressives who want to curb reliance on oil and natural gas as a way to battle climate change.

U.S. options to respond to OPEC’s decision are shrinking (Bloomberg News); more releases from the Strategic Petroleum Reserve, already at its lowest level since 1984, are expected (Reuters).

Recognizing that high U.S. gasoline prices contributed to Biden’s shaky job approval ratings, administration officials had been eagerly calling attention to the number of consecutive days during which U.S. gasoline prices dropped. Officials have worried that higher energy prices this winter in Europe could contribute to recession risks and weaken Western resolve against Moscow amid the war with Ukraine.

Biden said Wednesday he will continue to direct releases from the reserve “as necessary,” a shift from the White House’s previous comments that it would soon end the drawdown.

The administration early this year announced the sale of 180 million barrels for six months beginning in May. Last month it extended that historic sale because only about 155 million barrels had been sold. It now aims to sell 165 million barrels through November, according to Reuters.

▪ The Hill: Democrats excoriate Saudis over OPEC decision to cut oil production.

▪ NPR: Russia and Saudi Arabia agree to massive cuts to oil output. Here’s why it matters.

Europe, meanwhile, is gearing up for an even starker natural gas crisis next year, according to the head of the International Energy Agency. After Russia cut off gas supplies to the continent as a response to sanctions following the February invasion of Ukraine, European countries have filled up 90 percent of their gas storage tanks to deal with winter demand (Reuters).

“With gas storages almost at 90 percent, Europe will survive the coming winter with just some bruises as long as there are no political or technical surprises,” Fatih Birol, the executive director of the agency, said Wednesday.

Related Articles

▪ The Wall Street Journal: European Union likely to approve Group of Seven cap on Russian oil price in two steps.

▪ The New York Times: Western effort to drain funding from Russian President Vladimir Putin’s war machine faces global oil producers now making Russia’s crude more valuable on the world market.

▪ The New York Times: A strong dollar is wreaking havoc on emerging markets. A debt crisis could be next.

LEADING THE DAY

➤ POLITICS & INVESTIGATIONS

Arizona Republican Senate hopeful Blake Masters faces a critical moment in tonight’s televised debate against Sen. Mark Kelly (D-Ariz.), writes The Hill’s Caroline Vakil. Masters’ prospects have dimmed in the past few weeks as his hard-right views have raised concerns. A super PAC with ties to Minority Leader Mitch McConnell (R-Ky.) recently yanked millions of dollars from the race.

With five weeks remaining before the midterms, Republicans are banking on Masters — endorsed by former President Trump — to use the debate as an opportunity to appeal to a broader swath of voters in a crucial race.

Masters will debate Kelly and Libertarian Marc Victor on Arizona PBS at 9 p.m. ET.

▪ The Hill: Kelly leads Masters by 3 points in Arizona Senate poll.

▪ CBS News: Kelly has edge in Arizona Senate race that hinges on abortion, economy, immigration.

▪ CNBC: GOP megadonor Peter Thiel signals he is done helping Ohio Senate hopeful J.D. Vance and will fundraise for Arizona’s Masters.

Following a report earlier this week that he’d paid for an ex-girlfriend’s abortion in 2009, Georgia Senate candidate Herschel Walker’s campaign has been in turrmoil. The Republican — who has positioned himself as staunchly anti-abortion — denied the allegations, telling interviewers that he doesn’t know the woman he allegedly supported over a decade ago. But the woman has now told The Daily Beast that she’s not only Walker’s ex-girlfriend, she also had another child with him — one he’s publicly claimed as his own. Walker denied these allegations as well (Bloomberg News).

CNBC: Herschel Walker campaign says it raised over $500,000 after report Georgia GOP Senate hopeful paid for an abortion.

In the Senate, McConnell has been facing regular attacks from Trump, who once praised him as one of his staunchest allies in the Senate. Now the former president is calling on Republicans to oust him as leader, The Hill’s Alexander Bolton reports. Details from Trump’s first impeachment trial in 2020 show just how much his relationship with the minority leader changed.

McConnell led a coordinated defense of Trump during the 2020 impeachment proceedings, including encouraging Sen. Lisa Murkowski (R-Alaska) to vote against a push to prolong the trial by hearing from more witnesses, according to an excerpt from the new book “Unchecked” by Washington Post journalists Rachael Bade and Karoun Demirjian. Murkowski subsequently criticized McConnell for pledging to work in close coordination with the Trump White House during the trial, the book reveals, which didn’t sit well with McConnell, who scolded the Alaska senator by email and requested that she call him.

But, fast forward more than 2-1/2 years, and a McConnell-affiliated super PAC is now pouring money into Alaska to support Murkowski against her Trump-backed challenger Kelly Tshibaka.

Meanwhile, in the House, the hostility between Speaker Nancy Pelosi (D-Calif.) and Minority Leader Kevin McCarthy (R-Calif.), the man likely to succeed her should the GOP regain the chamber, has intensified.

As The New York Times reports, “She has called him a ‘moron.’ He has mused publicly — purely in jest, his aides later insisted — about wanting to hit her with the oversized wooden gavel used to keep order in the House.” Rivalries between lawmakers are nothing new, but rarely have feuds between the Speaker — who is elected by the whole House, as per the Constitution — and another member of Congress reached this level of disdain.

Progressives love Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), but they are increasingly realizing the two senators, who are 81 and 73 years old respectively, aren’t going to be their leaders forever. The Hill’s Hanna Trudo reports on debates within the left about who might succeed them as leaders of the progressive movement.

The Hill: Here are 10 of the potential 2024 presidential contenders with big stakes in the midterms.

📉 The Hill’s Data Deep Dive: When it comes to political views, a growing gender gap divides young men and women, The Hill’s Daniel de Visé reports. Women increasingly identify as liberal but men do not. Gallup poll data analyzed by the Survey Center on American Life in 2021 found 44 percent of young females described themselves as liberal, compared with 25 percent of young males. A decade earlier, roughly similar numbers of young men (27 percent) and young women (30 percent) identified as liberal. The gap widened in the 2000s during the George W. Bush administration. Trump’s presidential election in 2016 blew the gap wide open, in part because more young women than men said they disliked Trump. Also a factor: the #MeToo movement.

📚 Book bans are on the rise in the U.S., writes The Hill’s Alejandra O’Connell-Domenech. According to PEN America, more than 1,600 individual titles have been removed from classrooms this past year. And while book bans have been commonplace in libraries and schools over the decades, authors of recently banned books believe the attacks on their work are different in organization and intent.

“This is a more organized effort,” said Ellen Hopkins, who is the most frequently banned author in the U.S. according to PEN America. “The ultimate goal is to dismantle public school education.”

Experts are bracing for renewed discussions of civil war, as the Nov. 8 midterm elections approach and political talk grows more urgent and heated. Social media mentions of the phrase skyrocketed after the FBI’s search of Mar-a-Lago, and again when Biden made a speech calling out “MAGA Republicans.” With the midterms on the horizon, some experts worry about an increase in threats of violence online (The New York Times).

First reported by Bloomberg News, the thousands of documents seized from Trump’s Florida home “included a mix of government, business and personal affairs, including analysis about who should get a pardon, call notes marked with a presidential seal, retainer agreements for lawyers and accountants, and legal bills, according to newly disclosed logs created by federal investigators.”

The logs, apparently unsealed in error, are part of a filing that has since been removed from the court docket (The Hill).

▪ The Washington Post: What the FBI took from Trump, according to an accidentally unsealed list.

▪ Bloomberg News: Trump says a U.S. agency packed top-secret documents. These emails suggest otherwise.

▪ The Hill: Court agrees to fast-track DOJ’s appeal in Trump special master case.

IN FOCUS/SHARP TAKES

➤ ADMINISTRATION

Biden on Wednesday met with Gov. Ron DeSantis (R) in Florida to survey the damage caused by Hurricane Ian, which swept through the state last week and left 109 dead and countless with destroyed and flooded houses, and no electricity (CNN).

Biden and DeSantis put their political rivalry on hold as they toured Fort Myers, one of the cities impacted by the storm, write The Hill’s Alex Gantigano and Brett Samuels, projecting unity in Ian’s aftermath.

“Today we have one job and only one job. That is to make sure the people of Florida get everything they need to fully recover,” Biden said in prepared remarks, flanked by DeSantis. Biden said the governor has “done a good job” responding to the storm, adding, “We have very different political philosophies, but we’ve worked hand in glove.”

Before arriving, Biden issued an amended disaster declaration for Florida that doubled the eligibility window for fully covered federal aid from 30 to 60 days. In Fort Myers, he spoke about using aid to provide temporary housing, insurance assistance, food, water and other critical supplies. DeSantis repeatedly thanked the whole federal government for cutting through red tape to expedite assistance before, during and after Hurricane Ian made landfall.

▪ CNN: Biden and DeSantis put political rivalry aside — for now — as president toured hurricane damage.

▪ The Guardian: Hurricane Ian “ends discussion” on climate crisis, Biden says on Florida visit.

▪ The Washington Post: Ian is probably Florida’s deadliest hurricane since 1935. Most victims drowned.

▪ The New York Times: During Biden’s visit to Florida, he and DeSantis put politics (largely) on hold.

A federal appeals court on Wednesday ruled that the Obama-era Deferred Action for Childhood Arrivals policy violates U.S. immigration law. It left intact the program created in 2012 to cover some 600,000 immigrants who came illegally to the United States as children through no fault of their own.

A three-judge panel for the 5th Circuit Court of Appeals affirmed a 2021 ruling that prevented the Biden administration from enrolling new immigrants in the program, but left the enforcement waiver policy in place for current beneficiaries (CBS News).

Biden on Wednesday expressed his disappointment about the ruling.

“The court’s stay provides a temporary reprieve for DACA recipients but one thing remains clear: the lives of Dreamers remain in limbo,” the president said in a statement. “Today’s decision is the result of continued efforts by Republican state officials to strip DACA recipients of the protections and work authorization that many have now held for over a decade… It is long past time for Congress to pass permanent protections for Dreamers, including a pathway to citizenship.”

The Washington Post: Vice President Harris, driven in Washington by the Secret Service on Monday, had to switch vehicles after a minor accident immobilized the SUV when the driver hit a curb. The Secret Service initially described the accident as a “mechanical failure” before correcting the details.

🚀 NASA and SpaceX on Wednesday sent four astronauts on a journey to the International Space Station with a schedule to dock this evening close to 5 p.m. ET. Roughly an hour and 45 minutes later, the space station’s hatch will open ahead of a welcome ceremony.

The crew of four includes two American astronauts, one astronaut from Japan and a Russian cosmonaut. Despite tensions between the U.S. and Russia over Ukraine, cooperation continues between NASA and Roscosmos, the Russian space agency (The New York Times).

At 8:15 p.m. the seven astronauts already aboard the space station will help the new crew settle in before a separate spacecraft will bring four of the seven back to Earth. Crew-5, the current group heading into orbit, is expected to return home in about five months (CNN).

OPINION

■ IMF-World Bank meetings are the last stop before a coming economic storm, by Larry H. Summers and Masood Ahmed, opinion contributors, The Washington Post. https://wapo.st/3SXQrAy

■ There are two Americas now: One with a B.A. and one without, by Thomas Edsall, columnist, The New York Times. https://nyti.ms/3CxEXhU

■ Russia’s nuclear threat: Who’s bluffing who? by Melanie Amann, editorial writer, Der Spiegel. https://bit.ly/3e7y6Cr

WHERE AND WHEN

The House meets Friday at 1:30 p.m. for a pro forma session. Members are scheduled to return to the Capitol on Nov. 14.

The Senate convenes Friday at 10 a.m. for a pro forma session. Senators also are scheduled to return for work on Nov. 14.

The president will arrive in Poughkeepsie, N.Y., at 11:40 a.m. to tour IBM at 1:20 p.m. ahead of a 2 p.m. speech focused on semiconductors and technology. (IBM will announce it will invest $20 billion in tech over the next decade in the Hudson Valley region). Biden will fly from Poughkeepsie to Red Bank, N.J., for a Democratic National Committee fundraiser at 5 p.m. The president will fly from New Jersey to New York City for a political reception at 8 p.m. to benefit the Democratic Senatorial Campaign Committee. He will depart New York to arrive back at the White House shortly before 11 p.m.

The vice president at 4 p.m. will ceremonially swear in Arati Prabhakar to be director of the White House Office of Science and Technology Policy (OSTP).

Secretary of State Antony Blinken is in Lima, Peru, to lead a U.S. delegation at the General Assembly of the Organization of American States.

Treasury Secretary Janet Yellen will speak at 11 a.m. at the Center for Global Development ahead of the International Monetary Fund and the World Bank Group meeting about challenges in the global economy and the role of multilateral development banks.

First lady Jill Biden arrives in San Francisco at 5:15 pm. PT for events today and Friday (SFist).

Economic indicator: The Labor Department at 8:30 a.m. will report on filings for unemployment insurance during the week ending on Oct. 1.

🖥 Hill.TV’s “Rising” program features news and interviews at http://digital-stage.thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here.

ELSEWHERE

➤ INTERNATIONAL

The Zaporizhzhia nuclear power plant in Ukraine is caught in a diplomatic seesaw between Putin and opponents in Kyiv, with the International Atomic Energy Agency occupying a risky middle ground. On Wednesday Putin issued a decree nationalizing the plant with intentions that Russia control it, while the head of Ukraine’s state nuclear energy company said that he was taking charge, The New York Times reported.

Today, Rafael Mariano Grossi, the director of the International Atomic Energy group, which is under the umbrella of the United Nations, headed to Kyiv to continue advocating for a nuclear safety zone around the plant (The New York Times).

Meanwhile, in the southern city of Zaporizhzhia Thursday, a Russian missile demolished a five-story apartment block and left one woman dead while trapping other residents (Reuters).

The Ministry of Foreign Affairs of Ukraine condemned Russia’s attempt to take control of the plant in the southern city and urged that the European Union, the Group of Seven industrialized countries “and other partners” impose sanctions against Russia’s state nuclear power corporation, Rosatom. The ministry also called on member countries of the International Atomic Energy Agency to limit cooperation with Russia. Energoatom, Ukraine’s state energy company, said on Wednesday that Putin’s decree nationalizing the plant has no practical significance.

▪ The New York Times: New Russian recruits will not be ready for months, according to a NATO official.

▪ The New York Times: Russia capitalized Wednesday on flatbed truck-launched “kamikaze” drones supplied by Iran to break through Ukrainian defenses near Kyiv.

Putin appeared to concede Russia’s military setbacks in Ukraine during a televised video call on Wednesday with Russian teachers. “We are working on the assumption that the situation in the new territories will stabilize,” he told them. Ukraine has advanced in the east and south against Russian forces, and Putin’s troops have been retreating under pressure on both fronts, confronted by fast moving and nimble Ukrainian forces supplied with advanced Western-supplied artillery systems (The Guardian and The Moscow Times).

In a twist of international intrigue, the U.S. intelligence community says it believes Ukraine was behind a car bomb assassination plot in Russia that killed the daughter of ultranationalist Alexander Dugin in August. American officials said they were not aware of the plan that killed Daria Dugina, adding that the U.S. subsequently admonished Ukraine for the bombing. Some U.S. officials believe the operatives who carried out the plot targeted Dugin and thought, mistakenly, as it turned out, that he would be in a vehicle with his daughter. U.S. officials would not say who in the Biden administration delivered the admonishments or to whom in the Ukrainian government they were delivered. It was not known what Ukraine’s response was. It is unclear if Ukrainian President Volodymyr Zelensky signed off on the operation, The New York Times reported.

The 44-nation European Political Community meets for the first time today in Prague as the brainchild of French President Emmanuel Macron, who envisions a unifying alternative to the 27-nation European Union (The New York Times).

North Korea on Thursday launched two short-range ballistic missiles after the United States redeployed an aircraft carrier near the Korean Peninsula in response to Pyongyang’s previous launch of a nuclear-capable missile over Japan. Upshot interpretation: North Korean leader Kim Jong Un is determined to continue with weapons tests aimed at boosting his nuclear arsenal in defiance of international sanctions (News Wires).

➤ PANDEMIC & HEALTH

One in 7 Americans are diagnosed with Type 2 diabetes and experts say medical care alone isn’t enough to treat and prevent the disease. Improving people’s environments and communities, including walkability, housing, access to better food and health care, and “reframing the epidemic as a social, economic and environmental problem” help address the disease’s causes, they say (The New York Times).

“Our entire society is perfectly designed to create Type 2 diabetes,” Dean Schillinger, a professor of medicine at the University of California, San Francisco, told the Times. “We have to disrupt that.”

Insurance prices are likely to increase next year at faster rates than medical costs, according to some Wall Street analysts, Bloomberg News reports. According to a survey by Bank of America Global Research, health insurance benefits brokers expect rate increases of 6 to 12 percent.

Politico: Biden’s Operation Warp Speed revival for vaccines and treatments stumbles out of the gate.

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,061,490. Current average U.S. COVID-19 daily deaths are 330, according to the Centers for Disease Control and Prevention.

THE CLOSER

Try Our Morning Report Quiz

And finally … 🏛️ It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Alert to the lineup of high court justices, we’re eager for some smart guesses about the Supreme Court’s new term, which began Monday.

Email your responses to asimendinger@digital-stage.thehill.com and/or kkarisch@digital-stage.thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

Justice Ketanji Brown Jackson made her debut and reporters noted she did which of these during oral arguments about a wetlands case?

Remained silent throughout
Posed pointed questions about Congress’s intent
Interrupted the chief justice
Winked with a thumbs-up for her family members

The Onion filed a 23-page petition to the Supreme Court in a particular case on behalf of what?

Vegetables
Gerrymandered congressional districts
Third grade
Parody (and humorists)

Something disappeared outside the court ahead of the new term. News reports this week recounted Chief Justice John Roberts’s comment last month that seeing _____ when arriving at the court was “gut-wrenching every morning”?

Demonstrators with megaphones
Barricades
Overflowing garbage bins
Flocks of geese

Gallup reported last week that Americans’ opinions of the Supreme Court are ____?

The best they’ve been in six years
The worst they’ve been in 50 years
Markedly unchanged throughout the past decade
Heavily influenced by C-SPAN coverage

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