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The Morning Dispatch: Biden’s Oily Situation
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The Morning Dispatch: Biden’s Oily Situation

The White House signals an aggressive response to OPEC cutting oil production.

Happy Friday! It’s the last day to enter Crocs’ “Croctober” giveaway. We initially didn’t feel the need to sign up for the drawing, but then we learned the fashion-forward foam clogs we have our hearts set on retail for $70.

Wish us luck!

Quick Hits: Today’s Top Stories

  • President Joe Biden on Thursday pardoned everyone convicted under federal law of simple marijuana possession—an estimated 6,500 people from 1992 to 2021, not including those convicted in Washington, D.C.—and urged state governors to follow suit, which would affect many more people. Biden also directed the Department of Health and Human Services and the attorney general to review marijuana’s classification under federal law, potentially moving cannabis to a lower level on the Controlled Substances Act or descheduling the drug.

  • The Pentagon’s Central Command announced Thursday that U.S. forces had killed three ISIS officials in two separate operations—an airstrike and a helicopter raid—in northern Syria, as part of broader U.S. efforts with allies to prevent ISIS from planning and executing attacks. Syrian Kurdish forces, for example, arrested about 300 ISIS operatives living in a detention camp in northeastern Syria three weeks ago, according to Central Command.

  • The Treasury Department announced another sanctions package against Iranian officials on Thursday in response to the regime’s internet restrictions and violent crackdown on ongoing protests. According to Oslo-based Iran Human Rights, at least 154 people have died in protests that began last month in response to 22-year-old Mahsa Amini’s death after her detention for alleged dress code violations. The death of 16-year-old Nika Shakarami, who went missing September 20 while attending a demonstration, has sparked additional protests.

  • A former police officer facing a drug charge killed at least 37 people—including more than 20 children—at a daycare in Thailand on Thursday before killing his wife and child and himself in the deadliest mass shooting and stabbing in the nation’s history. And in Mexico, gunmen from two criminal groups on Thursday killed 20 people—including the mayor and several local officials—in a coordinated attack on a municipal hall and home in the southern town of San Miguel Totolapan. Police and military officials transferred three injured people to a hospital.

  • The Washington Post reported Thursday that FBI and IRS investigators have gathered what they believe is sufficient evidence to charge President Biden’s son Hunter with tax crimes and a false statement connected to a gun purchase, when he claimed not to be using drugs on a federal form to purchase a handgun (but he wrote in his memoir that he was addicted to crack cocaine during the year he purchased the gun). The U.S. attorney in Delaware—David Weiss, a Trump administration appointee—will decide whether to file the charges. Hunter Biden’s international business dealings—particularly his work for a Ukrainian gas company and Chinese energy company—have invited allegations of corruption against both him and his father.

  • North Carolina Proud Boys leader Jeremy Bertino pleaded guilty on Thursday to seditious conspiracy for his role in organizing the January 6 Capitol attack. The charge, which carries a maximum penalty of 20 years imprisonment, is the most serious that prosecutors have so far leveled against people involved in the attack. Bertino wasn’t present during the Capitol riot—he’d been stabbed at an event in December—but participated in an encrypted chat with other Proud Boys leaders in the weeks before the attack and said in his plea documents that the group planned to disrupt the Electoral College vote certification.

  • U.S. District Court Judge Glenn Suddaby on Thursday temporarily blocked several provisions in a recently passed New York gun-control law, including a requirement that concealed carry applicants prove “good moral character” and submit social media records for review—a rule Suddaby deemed too subjective. The judge also blocked the establishment of some gun-free zones—including subways and Times Square—writing that the state can’t ban people from carrying guns in certain public places. Tish James, New York’s Democratic attorney general, vowed to appeal the ruling.

  • Sen. Ben Sasse of Nebraska is expected to resign his seat—just two years after being elected to a second term—to accept a job as president of the University of Florida. The school announced Thursday that he’s the sole finalist for the position, pending final approval over the next few weeks. Sasse, a Republican, previously ran Midland University, a small Christian school in Nebraska, and taught at the University of Texas at Austin. Under Nebraska law, Gov. Pete Ricketts will appoint a replacement for Sasse once the senator formally tenders his resignation, and a special election will fill the seat in 2024.

  • The Centers for Disease Control and Prevention announced Thursday that travelers entering the U.S. after spending time in Uganda will be redirected to one of five airports where they can be screened for Ebola. Uganda has been battling an outbreak of the disease, with 63 confirmed and probable cases and 29 deaths as of Wednesday, according to the World Health Organization.

  • Hackers from the pro-Kremlin group Killnet claimed responsibility on Wednesday for temporarily taking down state government websites in Colorado, Kentucky, and Mississippi, as well as a congressional website in July. The group typically conducts similar temporary, politically-motivated attacks.

  • The Labor Department reported Thursday that initial jobless claims—a proxy for layoffs—rose by 29,000 week-over-week to a seasonally adjusted 219,000 last week, the highest level in more than a month. Still, the measure has fallen nearly every week since early August and remains near historic lows, signaling the labor market—though cooling—is still tight.

Ope, There Goes OPEC

(Carolyn Cole / Los Angeles Times via Getty Images)

Isn’t it just the worst when complex geopolitical and economic forces align to hamper your domestic political prospects?

“Disappointment” is the word President Joe Biden used Thursday when asked by a reporter about a decision announced one day earlier by the Organization of Petroleum Exporting Countries and its allies (OPEC+) to cut output by 2 million barrels of oil per day (2 mb/d) starting in November. His national security adviser and National Economic Council director labeled the move “shortsighted,” and his press secretary said it was “clear” the bloc is “aligning with Russia.”

The Biden administration’s top energy and national security officials had reportedly been lobbying their counterparts in Saudi Arabia, Kuwait, and the United Arab Emirates for weeks in an effort to stave off the decision by OPEC, a group of mostly Middle Eastern and African nations that together account for about 40 percent of global oil production. With just 32 days until the midterm elections, the White House can ill afford for prices at gas pumps to begin approaching anything close to what we saw in June. They had already begun to creep back up last week due in part to planned refinery maintenance on the West Coast. But oil prices overall have been on the rise since late last month and jumped another 1 percent on Thursday, after OPEC+’s meeting.

The news has birthed its fair share of unfounded conspiracy theories, including one that alleges former President Donald Trump coordinated with Saudi Arabian Crown Prince Mohammed bin Salman to stick Democrats with rising gas prices as voters head to the polls. Setting aside the fact that—as the Washington Post’s Megan McArdle notes—Trump has shown minimal interest in actually helping the GOP win in November, there’s a much simpler explanation for OPEC’s behavior: self-interest.

“I don’t like the fact that everyone is framing this as a U.S. vs. Saudi Arabia issue, or Saudi Arabia siding with Russia. That’s not the correct framing,” Ben Cahill, senior fellow at the Center for Strategic and International Studies’ Energy Security and Climate Change Program, told The Dispatch. “OPEC+ is looking after its own interests. Saudi Arabia and Russia and the rest of them, they have a lot of economic interests that are aligned.”

The bloc—whose moves are more or less dictated by major players Saudi Arabia, Kuwait, and the United Arab Emirates—cited the “uncertainty” surrounding the global economic outlook in its statement announcing the cuts, arguing producers need to be “proactive and preemptive” to ensure stability in the oil market. The price of Brent and WTI crude have steadily fallen from their mid-June peaks—both measures hit levels in late September that hadn’t been seen since early January, before Russia’s invasion of Ukraine—and as the likelihood of a global recession grows, producers have become increasingly spooked they’ll be left holding the bag when the bottom falls out in aggregate demand. As we noted a few weeks ago, adjusting oil production levels isn’t as easy as turning a spigot, so OPEC countries—like U.S. oil companies—are hesitant to invest in production capacity they may not need later on.

The Biden administration, in its entreaties, has undoubtedly made the case to the Saudis and other OPEC members that, by decreasing production and raising energy prices around the world, they will worsen inflationary pressures (and the interest rate hikes necessary to tame them), thus helping bring about the very recessions they claim to fear. But the pitch evidently wasn’t persuasive enough.

Analysts also see OPEC’s move as a means of reasserting itself after a year in which oil-consuming countries experimented with an unprecedented amount of market manipulation in an effort to bend conditions in their favor. “The OPEC+ countries are very wary of some of the interventions in the market by the big consuming states,” Cahill said, referring both to the hundreds of millions of barrels of oil being released from nations’ strategic reserves and European/U.S. efforts to impose a price cap on sales of Russian oil. “If the price cap works, that’s basically a coalition of buyers targeting exports from a certain country and reducing its revenues. At a very basic level, that’s threatening to the OPEC states. And so they’re sending a message: You guys think you can intervene in the market? Let’s show you what that actually looks like.

On paper, the 2 mb/d cut in production—about 2 percent of global daily supply—is the bloc’s largest since April 2020, when COVID-19 lockdowns brought the world to a standstill. But the actual effect of Monday’s move is likely to be more muted, as the decrease is based on August targets that many OPEC countries had already been failing to meet. Ultimately, actual production is expected to drop from current levels by somewhere between 800,000 and 1.1 million barrels per day, bringing OPEC output back near where it was in the spring.

Still, that hasn’t stopped the Biden administration—embarrassed by the president’s July trip to Jeddah (and fist bump) yielding little fruit—from vowing an aggressive response. In addition to announcing another 10 million more barrels of oil from the United States’ Strategic Petroleum Reserve will be sold in November, the U.S. may be considering tapping into Venezuelan oil again. A Wall Street Journal report this week indicated that the administration may ease Trump-era sanctions that would allow Chevron to begin pumping oil again.

“We’re looking at what alternatives we may have,” Biden told reporters yesterday reacting to the OPEC decision. “It is a disappointment, and it says that there are problems.”

Worth Your Time

  • With Ben Sasse seemingly on his way to the University of Florida, now’s as good a time as any to shamelessly plug the profile of him Sarah and Declan wrote for Deseret News this summer—focusing on his passion for higher education. “He holds degrees from both Harvard and Yale—and studied abroad at Oxford, where, in what he described as his ‘finest hour,’ he was chosen to quarterback the American football team—but thinks we devote entirely too much time and energy on a handful of elite schools that collectively service less than 1 percent of the 31 million people in the United States between the ages of 18 and 24,” they write. “He’s a historian by training who will answer a journalist’s question by referencing Mark Twain, Christina Hoff Sommers, and Abraham Kuyper—‘the, you know, Dutch prime minister at the turn of the 20th century’—but considers Khan Academy founder Salman Khan to be ‘the most significant algebra teacher in the history of humanity.’ He’s been a professor at a massive public university and the president of a tiny Christian one. He homeschooled his three kids on and off with his wife Melissa—a former inner city high school teacher and administrator—but believes the factory model school is ‘terrible for human souls.’ He’s a strong believer in the importance of the liberal arts, but some of his most memorable parenting advice centers on manual labor—his then-teenage daughter spent a month in 2016 working on a cattle ranch in exchange for room and board. ‘We just believe in work,’ he said at the time. But he also believes in education. ‘We need to be thinking broadly about that 18- to 24-year-old cohort, and what it looks like to create a civilization of lifelong learners for the first time in human history,’ he said. ‘Nobody’s ever had to solve this particular riddle. The historian in me is always skeptical of ‘unprecedented’ kind of language, but … this is unprecedented!’”

  • Why is everyone stealing parrots? “Everyone” might be pushing it a bit, but parrot thefts—including “small-time parrot robberies and major parrot heists; planned-out parrot capers and cage-smash parrot grabs; parrot thefts of passion, parrot thefts of vengeance, and parrot thefts of odd compulsion”—are an oddly common crime. To find out why, Daniel Engber contacts convicted parrot smugglers, robbed parrot purveyors, and even consults the transcript of an interview with a kidnapped parrot. “Parrots comprise some 350 different species, and according to my notes, parrot thieves are equally diverse,” Engber writes for The Atlantic. “If men with guns can steal a parrot from your patio, a pregnant woman with a stroller might steal one from your boat. And when someone takes away your bird, they might decide to leave a smaller one behind. ‘It’s as if they’ve got fed up with the parakeet and swapped it for my African Grey parrot,’ that particular victim told reporters at the time. ‘It’s bonkers.’”

Presented Without Comment

 Also Presented Without Comment

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Toeing the Company Line

  • In Thursday’s edition of The Current (🔒), Klon tries to answer all your questions about Vladimir Putin’s potential nuclear escalation. What types of weapons could Russia use? Where would it aim them? What can the U.S. do to deter such a step?

  • On today’s episode of the Dispatch Podcast, Sarah, Jonah, David, and Declan break down what the Herschel Walker scandal means for both the Republican Party and the pro-life movement before turning to a broader midterms update and a preview of the new Supreme Court term.

  • On the site today, Price St. Clair explains why the strongest dollar in a generation matters (and not just for Americans abroad getting great exchange rates), Kevin D. Williamson reflects on our current politics of demonization, Nick Catoggio examines why Ron DeSantis’ friendliness toward Joe Biden following Hurricane Ian won’t be a political liability, and Daniele Pletka argues Biden should be cautious of conciliatory gestures from Iran.

Let Us Know

Sen. Ben Sasse told National Review yesterday he is leaving the Senate because he wants to “get back to building stuff.” Do you think he will have a larger impact on the country as a university president than he does in his current perch?

Clarification, October 9, 2022: This newsletter originally included week-old statistics about the number of COVID-19 cases and deaths recorded in the United States. They have been removed.

Declan Garvey's Headshot

Declan Garvey

Declan Garvey is the executive editor at the Dispatch and is based in Washington, D.C. Prior to joining the company in 2019, he worked in public affairs at Hamilton Place Strategies and market research at Echelon Insights. When Declan is not assigning and editing pieces, he is probably watching a Cubs game, listening to podcasts on 3x speed, or trying a new recipe with his wife.

Esther Eaton's Headshot

Esther Eaton

Esther Eaton is a former deputy editor of The Morning Dispatch.