U.S. drivers are now paying more for gasoline than at any other time in history as demand surges and the war in Ukraine threatens global oil supplies.
Average pump prices in the U.S. are now $4.173 per gallon, the highest level in records going back to 2000, according to auto club AAA. Government data going back to 1990 show prices have never been higher than they are now. In California, the most expensive U.S. state for drivers, prices have surged to $5.444 a gallon.
Record pump prices pose a major challenge for President Joe Biden, whose attempts to cap gasoline costs and rein in inflation have so far had little impact. That means American households — already slammed by soaring food costs and electricity prices — are getting hit on all sides.
Prices are probably not coming down anytime soon. U.S. gasoline futures hit record highs on Monday as the market reckoned with lost Russian oil-product exports that could be cemented by a formal ban. Surges in futures markets tend to precede pump-price gains by a few weeks.
Russian oil made up only about 3% of all the crude shipments that arrived in the U.S. last year, data from the U.S. Energy Information Administration show. But when also including other petroleum products, like unfinished fuel oil that can be used as a feedstock to produce gasoline and diesel, Russia accounted for about 8% of the U.S.’s 2021 petroleum imports. Read more from Chunzi Xu.
Two top U.S. officials met with members of Venezuela’s government in Caracas to discuss global oil supplies and the nation’s ties to Russia, according to people familiar with the matter. The weekend visit, which signals a possible shift in the U.S. approach toward the socialist government, coincides with a Biden administration effort to round up other sources of energy after the wave of financial sanctions placed on Russia crimped supplies. The talks come after Secretary of State Antony Blinken said Sunday that the U.S. and Europe are weighing the potential of an oil embargo against Russia. Read more from Jennifer Jacobs and Ezra Fieser.
- But a key Democrat strongly opposed the notion of allowing some oil sales from Venezuela. Senate Foreign Relations Chairman Bob Menendez (D-N.J.) said he will oppose “any action that fills the pockets of regime oligarchs with oil profits while Maduro continues to deprive Venezuelans of basic human rights.” Menendez said the administration’s actions on Moscow shouldn’t be “undercut by propping up a dictator,” calling Maduro a “cancer,” Chelsea Mes reports.
- Meanwhile, the head of the biggest U.S. oil lobby groups said the Biden administration is “misusing facts” when it claims the industry has over 9,000 federal drilling permits on which it can drill to boost supply and ease soaring energy prices. Mike Sommers, CEO of the American Petroleum Institute, said the industry is tapping a higher percentage of federal onshore and offshore leases than at any time in the past, and it’s continuing to increase production. Paul Takahashi has more.
- Sen. Daniel Sullivan said there’s “a battle within” the Biden administration over the issue of energy security. Citing what Sullivan (R-Alaska) said is the need for the U.S. to ramp up production to reduce its dependence on energy from Russia and other nations, Sullivan said that some figures in the administration understand his position, while others, such as climate envoy John Kerry, are “hellbent on undermining” domestic production. Instead of looking for production from Venezuela, Iran, Saudi Arabia, “let’s go home,” Sullivan said. “Let’s go to Texas, Alaska, North Dakota.” Read more in Bloomberg’s CERAWeek update.
- The chances of enacting Biden’s stalled Build Back Better Act have increased as a result of the war in Ukraine, according to Goldman Sachs economists. The prospect of a ban on Russian oil imports may give the legislation — and the more than $550 billion earmarked to fight climate change — a second chance, potentially in a scaled back form. Read more from Nikos Chrysoloras.
Also Happening on the Hill
- The House meets at noon to debate on two resolutions to condemn threats against houses of worship and historically Black colleges and universities.
- The Senate meets at 10:30 a.m. to resume consideration of postal overhaul legislation.
The White House has lowered its initial emergency funding request for Covid response to $15 billion from $22.5 billion it had sought previously, a key Senate GOP appropriator said yesterday. Lawmakers expect a $1.5 trillion omnibus government funding package to be finished today, along with spending bills with Ukraine aid and Covid resources, in time for a House vote tomorrow. Biden’s new coronavirus response request includes $10 billion for the Health and Human Services Department and $5 billion for the USAID to combat the coronavirus globally, said Sen. Roy Blunt (R-Mo.), the top Senate GOP appropriator for health.
The administration’s previous figure of $22.5 billion sought investment in testing, anti-viral treatments and improved vaccines in anticipation of a possible new variant and subsequent wave of infections, with funding also meant for global vaccine efforts. The push for additional Covid funds saw pushback from Republicans, who said any new spending should be paid for by re-purposing unspent money from last year’s economic rescue plan.
The Ukraine spending bill will total “more than $12 billion,” Senate Majority Leader Chuck Schumer (D-N.Y.) said on the floor yesterday. That’s up from the $10 billion requested by the White House last week, Jack Fitzpatrick and Erik Wasson report.
- Yesterday, House Majority Leader Steny Hoyer said he expected the omnibus bill would get a vote in the House “no later than Wednesday” and the Rules Committee could meet today. “I certainly hope there’s no need for a CR,” he told reporters yesterday evening. Government funding will lapse March 11. Hoyer (D-Md.) also said that a bipartisan bill seeking to block Russian oil imports could also get to the House floor for a vote as soon as this week, Emily Wilkins reports.
The FDA could more easily pull drugs that show no clinical benefit off the market under a measure that aims to revamp the approval process used for Biogen’s Alzheimer’s drug. The bill, introduced by House Energy and Commerce Chair Frank Pallone Jr. (D-N.J.) would make several changes to the accelerated approval process, a Food and Drug Administration regulatory mechanism designed to speed access to game-changing drugs for patients with unmet needs. The FDA has faced criticisms that it’s expedited approvals without certainty that the drug will show a definitive clinical benefit. Jeannie Baumann has more.
The Senate passed legislation making lynching a federal hate crime, sending the House-passed measure to Biden. “It’s long overdue,” Senate Majority Leader Chuck Schumer (D-N.Y.) said in a floor speech after securing unanimous consent to pass the bill. Under the bill, any conspiracy to commit a federal hate crime could be punished with as many as 30 years in prison if the crime resulted in death or serious bodily injury, or if it involved kidnapping or aggravated sexual abuse. Read the BGOV Bill Summary of the legislation by Adam M. Taylor.
When the Federal Reserve starts raising interest rates next week, it can expect to hear “it’s about time” from Pat Toomey. The Republican senator from Pennsylvania was early to call out the central bank for getting behind the curve on its mandate to maintain stable prices—now an often-heard complaint. And he’s also criticized Fed officials for wandering into issues he sees as well outside its authority. The top Republican on the Senate Banking Committee has rallied party members to call for more accountability from the Fed and fight its “mission creep,” including what he sees as a push by Democrats to have the central bank encourage a move away from fossil fuels. Read more from Steven Dennis.
Republicans Rejected by Supreme Court on Congressional Maps
The U.S. Supreme Court turned away Republican challenges to congressional maps drawn for this year’s election by state courts in Pennsylvania and North Carolina.
Over three dissents, the justices left in force a North Carolina Supreme Court ruling that could help Democrats in the November election. The state court said a map drawn by the Republican-controlled General Assembly was so partisan that it violated several provisions of the state constitution.
The lawmakers’ map would have given the GOP likely wins in at least 10 of the 14 seats in the closely divided state. The court-ordered map is more even, with seven likely Republican districts, five likely Democratic districts and two competitive seats. States must redraw their districts after the U.S. Census. Read more from Greg Stohr.
Around the Administration
- The president will travel to Fort Worth, Texas, to speak alongside Veterans Affairs Secretary Denis McDonough to Veterans Affairs health-care providers at 2:30 p.m. about the health effects of burn pits on servicemembers. They’ll deliver public remarks on expanding VA benefits at 3:30 p.m.
China is developing one of the greatest nuclear weapons forces in history, while Russia will exploit every opportunity to help undermine the U.S. and its allies, according to the annual threat assessment by the Office of the Director of National Intelligence. In a stark, declassified 31-page document, the report released yesterday by the House Intelligence Committee says that Iran will continue to threaten American interests, as it seeks to erode U.S. influence throughout the Middle East. Meanwhile, North Korea is committed to expanding its nuclear arsenal and ballistic missile development, the assessment says, Chris Strohm reports.
- A Russian gambit linking its war on Ukraine to negotiations aimed at restoring a landmark nuclear agreement between Iran and world powers is poised to postpone an anticipated resolution of the talks. The Kremlin’s demand for U.S. guarantees that sanctions imposed over its Ukraine invasion won’t affect Moscow’s business with Iran has sparked concern among some diplomats. While it’s unlikely to derail the nuclear talks completely, it potentially adds new complications to discussions that envoys had predicted would conclude in days. Read more from Golnar Motevalli and Jonathan Tirone.
- The fourth effort in as many days to create humanitarian corridors for civilians fleeing areas of heavy fighting appeared to be fraying hours after it was announced, with Ukraine accusing Russia of shelling near trucks carrying aid to people stranded in the southeastern port of Mariupol, which is surrounded by Russian troops. Read the latest in the Bloomberg News Ukraine Update.
- North Korea is undertaking construction work at its main nuclear weapons test site for the first time in about four years, according to an analysis of satellite imagery, raising fresh security concerns as South Korea elects a new leader. Images captured Friday show “very early signs” of activity at the mountainous area of Punggye-ri, including the construction of a new building and repairs to another structure, weapons expert Jeffrey Lewis wrote on his Arms Control Wonk website. Read more from Jon Herskovitz and Shinhye Kang.
The FDA approved beef cattle genetically altered to be more tolerant of hot weather for human consumption, the first time it has used a new streamlined review to allow gene-edited animals within the food system. The cattle have been genetically altered using CRISPR technology to have an extremely short “slick-hair” coat similar to naturally occurring mutations developed by some conventionally bred cattle in hot climates, the FDA said in a statement. The agency has previously used a lengthier review process to approve genetic alterations in livestock but determined the cattle qualified for expedited review. Mike Dorning has more.