What’s Behind the Latest Strategic Petroleum Reserve Release?

Happy Monday! About 6 percent of Americans think they could beat a grizzly bear in hand-to-claw combat, but college wrestler Kendell Cummings tested the question earlier this month when he tackled a grizzly mauling his friend. Cummings didn’t so much “win” as “survive by playing dead,” but both young men are expected to make a full recovery.

“Before this attack, I had thought that I could take on a bear easily,” Cummings warned that 6 percent. “Now I know that a bear is pretty legit.” 

Quick Hits: Today’s Top Stories

• Russian Defense Minister Sergei Shoigu this weekend called defense leaders from several NATO countries—including U.S. Defense Secretary Lloyd Austin, their second conversation in three days—to warn without evidence that Ukraine might detonate a radioactive “dirty bomb.” Russian forces have stepped up attacks on Ukraine’s power infrastructure in recent days, triggering blackouts, while Ukrainian troops have been shelling river crossings near occupied Kherson. Russian officers and medics have reportedly withdrawn from a nearby city, suggesting preparation for a retreat, while other troops are reportedly preparing for urban combat in Kherson.
• The 8th Circuit Court of Appeals on Friday temporarily blocked the Biden administration’s student debt cancellation plan while it considers a motion from six Republican-led states to scrap the program. Missouri District Court Judge Henry Autrey had ruled Thursday that the states failed to establish standing for their suit, while Supreme Court Justice Amy Coney Barrett on Thursday rejected a request by a Wisconsin taxpayers group to block the program. The White House said 22 million borrowers have already applied for relief and encouraged others to follow suit, promising the administration would continue reviewing applications.
• North and South Korea exchanged warning shots early Monday at their disputed western sea boundary, though no direct clash was reported. North Korea has launched more than 40 ballistic and cruise missiles this year, and South Korea is currently conducting annual defense exercises with the United States off the peninsula’s west coast.
• As expected, Chinese leader Xi Jinping on Sunday received an unprecedented third term as general secretary of China’s Communist Party. Xi also emerged from the weeklong party congress having stocked the Politburo Standing Committee—China’s top governing body—with proteges and allies. Xi has signaled his intention to keep China’s “Zero COVID-19” policy and accompanying lockdowns despite China’s growing economic weakness amid a struggling housing market, rising debt, and sinking exports.
• Iranian labor unions have called for strikes at oil facilities, schools, and factories amid ongoing protests over the death in police custody of 22-year-old Mahsa Amini, detained in September for violating the country’s religious dress code. So far, scattered workers’ protests haven’t been economically crippling but have become more political than previous, economically focused workers’ protests—on Sunday, teachers began a two-day strike to protest the deaths and detainments of students. Security forces have killed at least 23 children during the protests, according to Amnesty International.
• Traders estimate Japan’s government spent more than $30 billion to prop up the yen Friday after it hit a new 32-year low against the dollar—just weeks after Japan spent $20 billion on a similar intervention, its first since 1998. The yen has weakened against the dollar in part because Japan’s central bank has kept interest rates comparatively low while the United States’ Federal Reserve has hiked rates to combat inflation, attracting investors to the dollar for higher returns. Unless the Bank of Japan changes course, Japan’s interventions are unlikely to keep the yen strong.
• Boris Johnson on Sunday pulled out of the race to replace short-lived Prime Minister Liz Truss, who resigned Thursday after her quickly withdrawn tax cut and spending plan wreaked havoc on markets. The former prime minister’s dropout strengthens former chancellor Rishi Sunak’s already commanding lead in the race, which could end as soon as today if challenger Penny Mordaunt—leader of the House of Commons—can’t earn enough nominations from members of parliament to officially enter the race.
• The Department of Homeland Security announced Saturday that the number of Venezuelans found illegally crossing the southern border each day has dropped more than 85 percent since the administration on October 12 began immediately expelling illegal Venezuelan immigrants to Mexico without asylum proceedings. The administration also announced it would allow 24,000 Venezuelans to enter the U.S. via humanitarian parole—the program includes rigorous requirements for sponsorship, and migrants expelled after illegal crossing attempts aren’t eligible.
• Democratic Rep. Bennie Thompson—chair of the House committee investigating the January 6 Capitol attack—on Friday subpoenaed former President Donald Trump to testify about efforts to overturn the 2020 election. The subpoena is a largely symbolic step, since Trump is unlikely to testify before the panel dissolves at the end of this year. Also Friday, District Court Judge Carl Nichols—a Trump appointee—sentenced longtime Trump ally Steve Bannon to four months in jail and a $6,500 fine for defying his own subpoena to testify before the committee.

Don’t Call it Politics

When the White House announced yet another release from the Strategic Petroleum Reserve last week, Republicans immediately cried foul, declaring it a politically motivated move. 

“No, it’s not,” President Joe Biden insisted at a press conference. “It’s not politically motivated at all.” 

Case closed.

We won’t claim to be mind readers, but the circumstantial evidence that the White House timed this announcement for an electoral boost is pretty darn strong. We’re mere weeks from the midterms, and polling is growing increasingly grim for Democrats while Biden’s approval ratings slip back down toward 40 percent. Voters often punish a president’s party for high gas prices, and though pump prices have fallen from their peak in June, they’ve crept back up from about $3.69 a gallon on average last month to about $3.80 Sunday.

This latest release consists of 15 million barrels—the last batch of the largest-ever 180 million barrel drawdown Biden authorized in March—and leaves the SPR at its lowest level since the 1980s. It still has about 400 million barrels still available, per the White House. The barrels won’t actually be delivered until December, and Biden left the door open to order more.

The administration credits previous SPR releases with loosening the market enough to bring gas prices down by as much as 40 cents a gallon this summer, and while this last batch is too small to make that much of a dent in the market, it could help convince voters the president is trying to relieve their pain at the pump. The announcement also gave the White House another chance to blame high prices on the war in Ukraine and greedy fuel companies keeping profits high  at consumers’ expense.

The Biden White House would hardly be the first to use the SPR for electoral expedience. In a particularly egregious example, then-President Bill Clinton ordered a 30 million barrel release shortly before the 2000 presidential election—right after Al Gore made it a campaign issue in his presidential bid. And the SPR has a long history as a piggy bank: Congress has for decades required non-emergency SPR selloffs, in some cases to raise money for modernizing the reserve’s storage or to test its readiness for emergencies, but often simply to raise revenue. 

But the SPR release isn’t the only oil news Biden has been explaining away of late. It comes on the heels of revelations that the administration pushed Saudi Arabia to delay announcing OPEC production cuts for a month—which would have helped ensure that the resulting oil price spike didn’t hit until after midterms.

Administration officials insist their motives are pure and market-based. “We presented Saudi Arabia with analysis to show that there was no market basis to cut production targets, and that they could easily wait for the next OPEC meeting to see how things developed,” said John Kirby, National Security Council spokesman. Biden has threatened unspecified “consequences” for Saudi Arabia over OPEC’s decision to go ahead with the announcement, characterizing it as support for Russia—higher energy prices benefit the oil exporter and OPEC+ member. Saudi Arabia has dismissed those accusations but hasn’t soothed frustrations—Democratic Sen. Chris Murphy, a longtime Saudi Arabia critic, suggested freezing military aid to the kingdom. 

Regardless, releasing oil and pushing for more is a weird look for a president who once promised to “end fossil fuel.” Swamped by politically deadly inflation—gasoline has been a major contributor—Biden has been talking out both sides of his mouth on oil. He’s quietly tried to pause oil and gas leases on public lands, then loudly scolded oil and gas companies for not drilling enough. Biden took advantage of the SPR release to take another shot at the industry. “My message to the American energy companies is this: you should not be using your profits to buy back stock or for dividends,” he said. “You should be using these record-breaking profits to increase production and refining.”

But oil and gas companies know Biden ultimately wants to decrease their role in the energy market, and today’s high prices aren’t enough to incentivize pricey investment in more production and refinement capability. They need the promise of future demand at profitable prices—and the global economy’s slide toward recession isn’t encouraging on that score.

The White House did try to address that concern—and assuage critics worried that the SPR is running too low—with a promise to refill the reserve at $67 to $72 a barrel, below current prices of about $94 a barrel for Brent crude, a global benchmark. That guarantees demand at a soft price floor even if economies cool. “We’re giving you more certainty,” Biden said. “So you can act now to increase oil production now.”

But the industry may not be any more moved by this—ultimately temporary—measure than it has been by Biden’s shame game. “We urge caution in continuing to rely on short-term efforts that are no substitute for sound long-term policies that enable American energy leadership,” American Petroleum Institute head Mike Sommers said in a statement after the SPR release announcement.

Analysts aren’t that impressed, either. “Throwing away emergency oil stocks to raise revenue or douse pump prices is a classic example of a short-sighted and expensive policy mistake,” said Robert McNally—a former White House energy adviser and founder of Rapidan Energy Group. He praised the administration for planning to refill the SPR and acknowledged the initial release in March was necessary when it appeared Russian supply might suddenly dry up, but argued the U.S. should hold off on draining it further. 

“Don’t use the SPR to stabilize global oil prices, much less defend a price floor or ceiling,” McNally said. “We’ll pay later when geopolitical disruptions hammer consumers with even bigger oil price spikes.”

Worth Your Time

• Western officials love to criticize China’s aggressive style of diplomacy and at-times predatory infrastructure projects in developing economies. But while partisan sniping in the U.S. leaves American ambassadorships empty for years, China is planting flags in the developing world, Nahal Toosi writes in an in-depth report for Politico. “Panama is an example: The country’s current government is wary of Beijing and has held up or nixed some Chinese projects, but Washington hasn’t taken advantage of the moment,” Toosi reports. “When U.S. diplomats stop by, they typically come with lectures about cleaning up Panamanian corruption and warnings about China, while U.S. military leaders publicly raise security concerns about Chinese projects along the canal.” The Biden administration recognizes the problem, but its proposed solutions will take years to make a dent and risk derailment by new administrations. Meantime, in Panama, “the Americans offer few, if any, tangible alternatives to the trade, infrastructure projects and other assistance Beijing is willing to offer.”
• An Afghan couple has accused a U.S. Marine of abducting their baby—while the Marine insists he’s adopted a war orphan. “The baby had been rescued two years earlier from the rubble of a U.S. military raid that killed her parents and five siblings,” Associated Press reporters write. “After months in a U.S. military hospital, she had gone to live with her cousin and his wife, this newlywed couple. Now, the family was bound for the United States for further medical treatment, with the aid of U.S. Marine Corps attorney Joshua Mast. When the exhausted Afghans arrived at the airport in Washington, D.C., in late August 2021, Mast pulled them out of the international arrivals line and led them to an inspecting officer, according to a lawsuit they filed last month. They were surprised when Mast presented an Afghan passport for the child, the couple said. But it was the last name printed on the document that stopped them cold: Mast. They didn’t know it, but they would soon lose their baby.”

Presented Without Comment

Toeing the Company Line

• With House GOP Leader Kevin McCarthy hinting at using Ukraine aid and the debt ceiling as a political football next year, congressional leaders are weighing how to use the lame duck session. In Friday’s Uphill (🔒), Haley explains the ambiguities and headwinds.
• As Russia’s military continues to flounder and bomb civilians in Ukraine, Western apologists are finding it harder and harder to toe the pro-Russia line, Nick writes in Friday’s Boiling Frogs (🔒), and former Vice President Mike Pence is getting bolder in calling them out.
• Dispatch Managing Editor Rachael Larimore opened the mailbag (🔒) this month and answered your questions about remote work, being a boy mom, her time at Slate, and more—including a whole lot of questions about beer.
• Gubernatorial races are weird—and it’s not just the name. In Friday’s Stirewaltisms (🔒), Chris explains why governor elections are unique and lays out his race ratings, concluding that the map favors Democrats but the climate favors Republicans. 
• Caution: This French Press may contain “both sides-ism.” But while the left and right aren’t equivalent, David argues in Sunday’s edition that they do both have a problem with accurately diagnosing real problems in America, but then amplifying them to create “a profound loss of confidence in (or even contempt for) this nation we love.”
• In the culture section this weekend, Andrew watches a new Showtime documentary detailing the rise and fall of the Lincoln Project—is it a Greek tragedy or a bunch of Zoom meetings?—while M. Anthony Mills reviews a new book from Francis Fukuyama defending liberalism. Plus: John Guaspari argues Major League Baseball’s recent rule changes don’t address its real problems, and offers up his own suggested solution.
• Saturday’s edition of the Remnant is a heady one, featuring Jonah’s further thoughts on Wednesday’s episode with Yuval Levin, Michael Oakeshott’s theory of civil and enterprise associations, and more on the origins of American Conservatism, the roots of Progressivism in the New Deal, and William James’ ideas on the moral equivalent of war.
• What do our democracy and the game of Jenga have in common? If the mere question concerns you, tune in to this week’s episode of Good Faith to hear David and Curtis discuss the thorny questions facing Christians considering the upcoming midterms.
• On the site today, Chris Stirewalt explains who’s to blame for our collective addiction to cell phones and other gadgets. 

Let Us Know

What do you make of Biden’s latest efforts to bring down gas prices?