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Tag: Oil and gas industry

  • Oil prices surge after OPEC+ producers announce surprise cuts | CNN Business

    Oil prices surge after OPEC+ producers announce surprise cuts | CNN Business

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    Hong Kong/Atlanta
    CNN
     — 

    Oil prices spiked during Asian trade Monday after OPEC+ producers said they would cut production in a surprise move.

    Brent crude, the global benchmark, jumped 4.8% to $83.73 a barrel, while WTI, the US benchmark, rose 4.9% to $79.36.

    Rising oil prices could mean inflation remains higher for longer, adding pressure to a hot-button issue for consumers around the world.

    On Sunday, Saudi Arabia announced that it would start “a voluntary reduction” in its production of crude oil, alongside other members or allies of the Organization of the Petroleum Exporting Countries (OPEC).

    The cuts will start in May and last through the end of the year, an official with the Saudi Ministry of Energy was quoted as saying by Saudi state-run news agency SPA.

    The reductions are on top of those announced by OPEC+ in October, according to SPA.

    That month, oil producers had agreed to slash output by 2 million barrels a day, the largest cut since the start of the pandemic and equivalent to about 2% of global oil demand.

    Saudi Arabia now says it will cut oil production by another half a million barrels a day.

    Meanwhile, Iraq will slash production by 200,000 barrels per day, and the United Arab Emirates will decrease output by 144,000 barrels per day.

    Kuwait, Algeria and Oman will also lower production by 128,000, 48,000 and 40,000 barrels per day, respectively.

    In a Sunday note, Goldman Sachs analysts said the move was unexpected but “consistent with the new OPEC+ doctrine to act pre-emptively because they can without significant losses in market share.”

    The collective output cut by the nine members of OPEC+ totals 1.66 million barrels per day, said the analysts, who hiked their price forecast for Brent this year to $95 per barrel.

    Saudi Arabia’s energy ministry described its latest reduction as a precautionary measure aimed at supporting the stability of the oil markets, according to SPA.

    The White House pushed back on that notion — as well as the latest cuts by OPEC+.

    “We don’t think cuts are advisable at this moment given market uncertainty — and we’ve made that clear,” a spokesperson for the National Security Council said. “We’re focused on prices for American consumers, not barrels.”

    In October, OPEC+’s decision to cut production had already rankled the White House.

    US President Joe Biden pledged at the time that Saudi Arabia would suffer “consequences.” But so far, his administration appears to have back off on its vows to punish the Middle East kingdom.

    Russia, a member of OPEC+, also said Sunday that it would extend a voluntary reduction of 500,000 barrels per day until the end of 2023. The move was announced by Russian Deputy Prime Minister Alexander Novak, as cited by state-run news agency TASS.

    That decision was less surprising. Goldman analysts said they had forecast the cut would last into the second half of the year.

    — CNN’s Hanna Ziady and Arlette Saenz contributed to this report.

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  • French airports, schools and oil refineries hit by national strike over pension age increase | CNN Business

    French airports, schools and oil refineries hit by national strike over pension age increase | CNN Business

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    Paris
    CNN
     — 

    French transport networks, oil refineries and schools were hit by widespread disruption Thursday as workers staged a national strike to protest an increase in the retirement age that was pushed through parliament without a vote.

    Though sporadic demonstrations had popped up in Paris and other cities after the French government forced the bill through last week, Thursday marked the first day of coordinated action since then. It is the ninth day of strikes since the bill was introduced in January.

    Only two out of 14 metro lines in Paris were operating a normal service. RER train services, which run in the city and its suburbs, were severely reduced and only half of high-speed TGV trains were working. The nationwide strike has also affected air traffic, with 30% of flights impacted at Paris Orly airport.

    Unionized workers blockaded a major oil refinery in Normandy and another one in Fos-sur-Mer in the south of France, according to a government spokesperson.

    “We are intervening in a targeted manner to unblock oil storage tanks that are blocked by demonstrators,” the minister of energy transition, Agnès Pannier-Runacherin, said in a statement.

    “If the strike is a fundamental constitutional right, blockading is not one… The police is mobilized in difficult conditions and has my full support.”

    The government renewed its requisition order requiring workers to go back to work at the two blockaded refineries, the government spokesperson said.

    The government’s plan to raise the retirement age for most workers by two years was opposed by huge numbers of people. But despite protests that drew more than a million people onto streets across the country, President Emmanuel Macron’s government did not back down. It rammed the legislation through the French National Assembly last week using a constitutional clause that allows the government to bypass a vote.

    The country’s generous pension system and early retirement have long been a point of pride since they were enacted after World War II. Under the new law, the retirement age for most workers will be 64, still one of the lowest in the industrialized world.

    As a result of the refinery strikes, kerosene stocks at Charles De Gaulle airport, which serves Paris, were “under pressure,” and those at Orly airport were being monitored, according to the civil aviation authority.

    Earlier in the day, around 70 protesters blocked terminal one at Charles de Gaulle airport, an airport spokesperson told CNN.

    About 20% of teachers in public education also took part in the strikes, according to France’s education ministry.

    A protester stands near burning garbage bins during a demonstration as part of protests against the pension reform, in Nantes, France, March 23, 2023.

    Macron and his government have defended the retirement reform as necessary to keep the pension system funded. Taxes on current workers pay for the benefits of retirees, and as people live longer — and more baby boomers retire — the system would otherwise eventually go bankrupt, though the threat is not immediate.

    When the proposal was unveiled in January, the government said the reforms were necessary to prevent a projected 13.5 billion ($14.7 billion) euro hole opening up in the pension system in 2030.

    During an interview with two of France’s main television networks Wednesday, Macron said the bill should be enacted by the end of this year. He also defended the decision to push through the reform as financially necessary, no matter how unpopular it was.

    “It’s in the greater interest of the country. Between opinion polls and the national interest, I chose the national interest,” Macron said.

    — CNN’s Joseph Ataman and Olesya Dmitracova contributed to this report.

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  • China has shattered the assumption of US dominance in the Middle East | CNN

    China has shattered the assumption of US dominance in the Middle East | CNN

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    CNN
     — 

    With a grandiose diplomatic flourish China brokered a rapprochement between Saudi Arabia and Iran, in the process upending US calculus in the Gulf and beyond.

    While the United States has angered its Gulf allies by apparently dithering over morality, curbing arms supplies and chilling relations, Saudi Arabia’s King-in-waiting Crown Prince Mohammed bin Salman, known as MBS, has found a kindred spirit in China’s leader Xi Jinping.

    Both are bold, assertive, willing to take risks and seemingly share unsated ambition.

    Friday’s announcement that Riyadh and Tehran had renewed diplomatic ties was unexpected, but it shouldn’t have been. It is the logical accumulation of America’s diplomatic limitations and China’s growing quest to shape the world in its orbit.

    Beijing’s claim that “China pursues no selfish interest whatsoever in the Middle East,” rings hollow. It buys more oil from Saudi Arabia than any other country in the world.

    Xi needs energy to grow China’s economy, ensure stability at home and fuel its rise as a global power.

    His other main supplier, Russia, is at war, its supplies therefore in question. By de-escalating tensions between Saudi and Iran, Xi is not only shoring up his energy alternatives but, in a climate of growing tension with the US, also heading off potential curbs on his access to Gulf oil.

    Xi’s motivation appears fueled by wider interests, but even so the US State Department welcomed the surprise move, spokesman Ned Price saying, “we support anything that would serve to deescalate tensions in the region, and potentially help to prevent conflict.”

    Iran has buy-in because China has economic leverage. In 2021 the pair signed a trade deal reportedly worth up to $400 billion of Chinese investment over 25 years, in exchange for a steady supply of Iranian oil.

    Tehran is isolated by international sanctions and Beijing is providing a glimmer of financial relief.

    And, in the words of Iran’s Supreme leader Ayatollah Ali Khamenei last year, there’s also the hope of more to come as he sees geopolitical power shifting east.

    “Asia will become the center of knowledge, the center of economics, as well as the center of political power, and the center of military power,” Khamenei said.

    Saudi has buy-in because war with Iran would wreck its economy and ruin MBS’s play for regional dominance. His bold visions for the country’s post fossil-fuel future and domestic stability depend on inwardly investing robust oil and gas revenues.

    US State Department spokesman Ned Price pictured in July 2022.

    It may sound simple, but the fact the US couldn’t pull it off speaks to the complexities and nuance of everything that’s been brewing over the past two decades.

    America’s wars in Iraq and Afghanistan have burned through a good part of its diplomatic capital in the Middle East.

    Many in the Gulf see the development of the war in Ukraine as an unnecessary and dangerous American adventure, and some of Russian President Vladimir Putin’s territorial claims over Ukraine not without merit.

    Chinese and Saudi flags in Riyadh in December 2022.

    What the global West sees as a fight for democratic values lacks resonance among the Gulf autocracies, and the conflict doesn’t consume them in the same way as it does leaders in European capitals.

    Saudi Arabia, and MBS in particular, have become particularly frustrated with America’s flip-flop diplomacy: dialling back relations over the Crown Prince’s role in the murder of Washington Post columnist Jamal Khashoggi (which MBS denies); then calling on him to cut oil production swiftly followed by requests to increase it.

    These inconsistencies have led the Saudis to hew policy to their national interests and less to America’s needs.

    During his visit to Saudi last July, US President Joe Biden said: “We will not walk away and leave a vacuum to be filled by China, Russia, or Iran.” It seems now that the others are walking away from him.

    On Beijing’s part, China’s Gulf intervention signals its own needs, and the opportunity to act arrived in a single serving.

    Xi helped himself because he can. The Chinese leader is a risk taker.

    His abrupt ending of austere Covid-19 pandemic restrictions at home is just one example, but this is a more complex roll of the dice.

    Mediation in the Middle East can be a poisoned chalice, but as big as the potential gains are for China, the wider implications for the regional, and even global order, are quantifiably bigger and will resonate for years.

    US President Joe Biden (center-left) and Saudi Crown Prince Mohammed bin Salman (center) in Jeddah in July 2022.

    Yet harbingers of this shake-up and the scale of its impact have been in plain sight for months. Xi’s high-profile, red-carpet reception in Riyadh last December for his first overseas visit after abandoning his domestic “zero-Covid” policy stirred the waters.

    During that trip Saudi and Chinese officials signed scores of deals worth tens of billions of dollars.

    China’s Foreign Ministry trumpeted Xi’s visit, paying particular attention to one particular infrastructure project: “China will deepen industrial and infrastructure cooperation with Saudi Arabia (and) advance the development of the China-Saudi Arabia (Jizan) Industrial Park.”

    The Jizan project, part of China’s belt and road initiative, heralds huge investment around the ancient Red Sea port, currently Saudi’s third largest.

    Jizan lies close to the border with Yemen, the scene of a bloody civil war and proxy battle between Riyadh and Tehran since 2014, sparking what the United Nations has described as the world’s worst humanitarian crisis.

    Significantly since Xi’s visit, episodic attacks by the Iran-backed Houthi rebels on Jizan have abated.

    There are other effects too: the plans to upscale Jizan’s container handling puts Saudi in greater competition with the UAE’s container ports and potentially strains another regional rivalry, as MBS drives to become the dominant regional power, usurping UAE’s role as regional hub for global businesses.

    Xi will have an interest seeing both Saudi Arabia and the UAE prosper, but Saudi is by far the bigger partner with higher potential global economic heft and, importantly, massive religious clout in the Islamic world.

    Where the UAE and Saudi align strongly is eschewing direct conflict with Tehran.

    A deadly drone attack in Abu Dhabi late last year was claimed by the Houthis, before the rebels quickly rescinded it. But no one publicly blamed the Houthis’ sponsors in Tehran.

    A once shaky ceasefire in Yemen now also seems to be moving toward peace talks, perhaps yet another indication of the potential of China’s influence in the region.

    Beijing is acutely aware of what a continued war over the Persian Gulf could cost its commercial interests – another reason why a Saudi/Iran rapprochement makes sense to Xi.

    Iran blames Saudi for stoking the massive street protests through its towns and cities since September.

    Saudi denies that accusation, but when Iran moved drones and long-range missiles close to its Gulf coast and Saudi, Riyadh called on its friends to ask Tehran to de-escalate. Russia and China did, the threat dissipated.

    Tehran, despite US diplomatic efforts, is also closing in on nuclear weapons capability and Saudi’s MBS is on record saying he’ll ensure parity, “if Iran developed a nuclear bomb, we will follow suit as soon as possible.”

    Late last week US officials said Saudi was seeking US security guarantees and help developing a civilian nuclear program as part of a deal to normalize relations with Israel, an avowed enemy of Iran’s Ayatollahs.

    Indeed, when US Secretary of State Antony Blinken visited Israel late January, concerned over a rising Palestinian death toll in a violent year in the region, potential settlement expansions and controversial changes to Israel’s judiciary Prime Minister Benjamin Netanyahu spoke to Blinken about “expanding the circle of peace,” and improving relations with Arab neighbours, including Saudi Arabia.

    US Secretary of State Antony Blinken (left) with Israeli Prime Minister Benjamin Netanyahu in May 2021.

    But as Saudi seems to shift closer to Tehran, Netanyahu’s mission just got harder. While both Saudi and Israel strongly oppose a nuclear-armed Iran, only Netanyahu seems ready to confront Tehran.

    “My policy is to do everything within Israel’s power to prevent Iran from acquiring nuclear weapons,” the Israeli leader told Blinken.

    Riyadh favors diplomacy. As recently as last week the Saudi foreign minister said: “It’s absolutely critical … that we find and an alternative pathway to ensuring an (Iranian) civilian nuclear program.”

    By improving ties with Tehran, he said, “we can make it quite clear to the Iranians that this is not just a concerns of distant countries but it’s also a concern of its neighbors.”

    For years this is what America did, such as brokering the Iran nuclear deal, or JCPOA, in 2015.

    Xi backed that deal, the Saudis didn’t want it, Iran never trusted it, Biden’s predecessor Donald Trump’s withdrawal confirmed Iran’s fears and sealed its fate, despite the ongoing proximity talks to get American diplomats seated at the table again.

    Iran has raced ahead in the meantime, massively over-running the bounds of the JCPOA limits on uranium enrichment and producing almost weapons-grade material.

    What’s worse for Washington is that Trump’s JCPOA withdrawal legacy tainted international perceptions of US commitment, continuity and diplomacy. All these circumstances perhaps signaled to Xi that his time to seize the lead on global diplomacy was coming.

    Yet the Chinese leader seems to accept what Netanyahu won’t and what US diplomacy is unable to prevent: that sooner, rather than later, Iran will have a nuclear weapon. As such, Xi may be fostering Saudi-Iran rapprochement as a hedge against that day.

    So Netanyahu looks increasingly isolated and the Israeli leader, already under huge domestic pressure from spiking tensions with Palestinians and huge Israeli protests over his proposed judicial reforms, now faces a massive re-think on regional security.

    The working assumption of American diplomatic regional primacy is broken, and Netanyahu’s biggest ally is now not as hegemonic as he needs. But by how much is still far from clear.

    It’s not a knockout, but a gut blow, to Washington. How Xi calculates the situation isn’t clear either. The US is not finished, far from it, but it is diminished, and both powers are coexisting in a different way now.

    Earlier this month, the Chinese leader made unusually direct comments accusing the US of leading a campaign against China and causing serious domestic woes.

    “Western countries led by the United States have contained and suppressed us in an all-round way, which has brought unprecedented severe challenges to our development,” Xi told a group of government advisers representing private businesses on the sidelines of an annual legislative meeting in Beijing.

    Meanwhile, Biden has defined the future US-China relationship as “competition not confrontation,” and he has built his foreign policy around the tenets of standing up for democracy.

    It is striking that neither Xi, nor Khamenei, nor MBS are troubled by the moral dilemmas that circumscribe Biden. This is the big challenge the US president warned about, and now it’s here. An alternative world order, irrespective of what happens in Ukraine.

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  • The Willow Project has been approved. Here’s what to know about the controversial oil-drilling venture | CNN Politics

    The Willow Project has been approved. Here’s what to know about the controversial oil-drilling venture | CNN Politics

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    CNN
     — 

    On March 13, the Biden administration approved the controversial Willow Project in Alaska.

    ConocoPhillips’ massive Willow oil drilling project on Alaska’s North Slope moved through the administration’s approval process for months, galvanizing a sudden uprising of online activism against it, including more than one million letters written to the White House in protest of the project and a Change.org petition more than 3 million signatures.

    Here’s what to know about the Willow Project.

    ConocoPhillips’ Willow Project is a massive and decadeslong oil drilling venture on Alaska’s North Slope in the National Petroleum Reserve, which is owned by the federal government.

    The area where the project is planned holds up to 600 million barrels of oil. That oil would take years to reach the market since the project has yet to be constructed.

    ConocoPhillips is a Houston-based energy company that has been exploring and drilling for oil in Alaska for years. The company is the only one that currently has oil drilling operations in Alaska’s National Petroleum Reserve, though its two operating projects are smaller than Willow would be.

    Willow was proposed by ConocoPhillips and originally approved by the Trump administration in 2020. ConocoPhillips was initially approved to construct five drill pads, which the Biden administration ultimately reduced to three. Three pads will allow the company to drill about 90% of the oil they are pursuing.

    The Biden administration felt its hands were tied with the project because Conoco has existing and valid leases in the area, two government sources told CNN. They determined that legally, courts wouldn’t have allowed them to fully reject or drastically reduce the project, the sources said. If they had pursued those options, they could have faced steep fines in addition to legal action from ConocoPhillips.

    Now that the Biden administration has given the Willow project the green light, construction can begin. However, it is unclear exactly when that will happen, in large part due to impending legal challenges.

    Earthjustice, an environmental law group, is expected to file a complaint against the project soon and will likely seek an injunction to try to block the project from going forward.

    Environmental groups and ConocoPhillips are each racing against the clock. Construction on Willow can only be done during the winter season because it needs ice roads to build the rest of the oil project’s infrastructure – including hundreds of miles of roads and pipelines and a processing facility. Depending on the weather, the Alaska’s winter season could end sometime in April.

    If environmental groups secure an injunction before then to stop or delay the project, it could delay construction for at least a year. And since the project needs to be fully constructed before the oil can be produced, it could take years for the oil pumped out of Willow to reach the market.

    The Willow Project will almost certainly face a legal challenge. Earthjustice has told CNN it is preparing a complaint, and it has already started laying out their legal rationale, saying the Biden administration’s authority to protect surface resources on Alaska’s public lands includes taking steps to reduce planet-warming carbon pollution – which Willow would ultimately add to.

    “We and our clients don’t see any acceptable version of this project, we think the [environmental impact] analysis is unlawful,” Jeremy Lieb, an Alaska-based senior attorney for Earthjustice, previously told CNN.

    The state’s lawmakers say the project will create jobs, boost domestic energy production and lessen the country’s reliance on foreign oil. All three lawmakers in Alaska’s bipartisan congressional delegation met with President Joe Biden and his senior advisers on March 3, urging the president and his administration to approve the project.

    A coalition of Alaska Native groups on the North Slope also supports the project, saying it could be a much-needed new source of revenue for the region and fund services including education and health care.

    “Willow presents an opportunity to continue that investment in the communities,” Nagruk Harcharek, president of the advocacy group Voice of the Arctic Iñupiat, told CNN. “Without that money and revenue stream, we’re reliant on the state and the feds.”

    Other Alaska Natives living closer to the planned project, including city officials and tribal members in the Native village of Nuiqsut, are deeply concerned about the health and environmental impacts of a major oil development.

    In a recent personal letter to Interior Secretary Deb Haaland, Nuiqsut Mayor Rosemary Ahtuangaruak and two other Nuiqsut city and tribal officials said that the village would bear the brunt of health and environmental impacts from Willow. Other “villages get some financial benefits from oil and gas activity but experience far fewer impacts that Nuiqsut,” the letter reads. “We are at ground zero for the industrialization of the Arctic.”

    In addition, a surge of online activism against Willow has emerged on TikTok in the last week – resulting in over one million letters being sent to the Biden administration against the project and over 2.8 million signatures on a Change.org petition to halt Willow.

    By the administration’s own estimates, the project would generate enough oil to release 9.2 million metric tons of planet-warming carbon pollution a year – equivalent to adding 2 million gas-powered cars to the roads.

    “This is a huge climate threat and inconsistent with this administration’s promises to take on the climate crisis,” Jeremy Lieb, an Alaska-based senior attorney at environmental law group Earthjustice, told CNN. In addition to concerns about a fast-warming Arctic, groups are also concerned the project could destroy habitat for native species and alter the migration patterns of animals including caribou.

    Willow advocates, including Alaska lawmakers, vow the project will produce fossil fuel in a cleaner way than getting it from other countries, including Saudi Arabia or Venezuela.

    “Why are we not accessing [oil] from a resource where we know our environmental track record is second-to-none?” Republican Sen. Lisa Murkowski of Alaska said during a recent press conference.

    Yes. During his 2020 presidential campaign, Biden vowed to end new oil and gas drilling on public lands and waters – which he initially carried out as part of an early executive order.

    However, the drilling pause was struck down by a federal judge in 2021, and since then the Biden administration has opened up several areas for new drilling. Several of these new oil and gas drilling areas have been challenged in court by environmental groups.

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  • Biden will announce sweeping protections preventing new Arctic drilling ahead of Willow decision | CNN Politics

    Biden will announce sweeping protections preventing new Arctic drilling ahead of Willow decision | CNN Politics

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    CNN
     — 

    President Joe Biden on Monday is expected to announce sweeping new protections for federal lands and waters in Alaska, according to an administration official, as the administration is poised to soon approve a major oil drilling project in the state.

    Biden will declare the entire US Arctic Ocean off limits to future oil and gas leasing and will announce new rules to protect over 13 million acres in the federal National Petroleum Reserve in Alaska from drilling. In all, the administration will move to protect up to 16 million acres from future fossil fuel leasing.

    The announcement comes as the administration is preparing to green-light the ConocoPhillips’ Willow project, a massive oil drilling venture in the National Petroleum Reserve. By the administration’s own estimates, Willow would generate enough oil to release 9.2 million metric tons (10 million US tons) of planet-warming carbon pollution a year – equivalent to adding 2 million gas-powered cars to the roads.

    The protections will extend to the Teshekpuk Lake, Utukok Uplands, Colville River, Kasegaluk Lagoon and Peard Bay special areas – places that are important habitat to grizzly bears, polar bears, caribou and migratory birds. The official said the administration views the new actions as a “firewall” against both future fossil fuel leasing and expansion of existing projects on the North Slope.

    CNN reported on Friday that the administration is soon set to approve Willow. The expected approval is a victory for Alaska’s bipartisan congressional delegation and a coalition of Alaska Native tribes and groups who hailed the drilling venture as a much-needed new source of revenue and jobs for the remote region. It is a major blow to climate groups and Alaska Natives who oppose Willow, arguing the project will hurt the president’s ambitious climate goals and pose health and environmental risks.

    White House press secretary Karine Jean-Pierre pushed back Friday, saying no final decision on the project had been made and that the US Department of the Interior would make an “independent decision on the Willow Project.”

    The administration official said deliberations on Willow are focused on the legal challenges the administration faces if it tries to stop or substantially limit the venture, given ConocoPhillips’ existing, decades-long leases. These existing leases are limiting the administration’s options with the project, the administration official said.

    The additional protection measures may not be enough to assuage the concerns of climate and environmental groups, who have been pushing hard against the project.

    “These conservation decisions by the Biden administration are positive steps, but not nearly sufficient to blunt the impact of any version of the Willow oil and gas project,” Karlin Itchoak, Alaska senior regional director for The Wilderness Society, said in a statement.

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  • Biden administration approves controversial Willow oil project in Alaska | CNN Politics

    Biden administration approves controversial Willow oil project in Alaska | CNN Politics

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    CNN
     — 

    The Biden administration has approved the massive Willow oil drilling project in Alaska, angering climate advocates and setting the stage for a court challenge.

    The Willow Project is a decadeslong oil drilling venture in the National Petroleum Reserve, which is owned by the federal government. The area where the project is planned holds up to 600 million barrels of oil, though that oil would take years to reach the market since the project has yet to be constructed.

    By the administration’s own estimates, the project would generate enough oil to release 9.2 million metric tons of planet-warming carbon pollution a year – equivalent to adding 2 million gas-powered cars to the roads.

    The approval is a victory for Alaska’s bipartisan congressional delegation and a coalition of Alaska Native tribes and groups who hailed the drilling venture as a much-needed new source of revenue and jobs for the remote region.

    But it is a major blow to climate groups and Alaska Natives who opposed Willow and argued the project will hurt the president’s ambitious climate goals and pose health and environmental risks.

    The project has galvanized an uprising of online activism against it, including more than one million letters written to the White House in protest of the project, and a Change.org petition with millions of signatures.

    Environmental advocates are expected to challenge the project in court. Earthjustice, an environmental law group, has been preparing a case against the project and intends to argue the Biden administration’s authority to protect resources on Alaska’s public lands includes taking steps to reduce planet-warming carbon pollution, which the Willow Project would ultimately add to.

    Earthjustice President Abigail Dillen blasted the administration’s decision on Monday.

    “We are too late in the climate crisis to approve massive oil and gas projects that directly undermine the new clean economy that the Biden Administration committed to advancing,” Dillen said. “We know President Biden understands the existential threat of climate, but he is approving a project that derails his own climate goals.”

    The venture was approved with three drilling pads instead of two. In recent weeks, the Biden administration had looked at reducing the number of approved drilling pads down to two and boosting nature conservation measures to try to assuage concerns climate and environmental groups had about the project.

    But ConocoPhillips and Alaska’s bipartisan congressional delegation aggressively lobbied the Biden White House and Interior Department for months to approve three drilling pads, saying the project would not be economically viable with two.

    Ultimately, the administration felt they were constrained legally and had few options to cancel or significantly curtail the project – which was initially approved by the Trump administration. The administration determined that legally, courts wouldn’t have allowed them to fully reject the project, two government sources familiar with the approval told CNN.

    Many oil drilling leases on the site were decades-oil, which the administration felt gave ConocoPhillips certain existing legal rights. Reducing the drill-pads to two would have allowed the company to drill about 70% of the oil they were initially seeking.

    Still, the final scope of the project will cover 68,000 fewer acres than what ConocoPhillips was initially seeking, the sources said.

    CNN has reached out to ConocoPhillips for comment.

    Biden on Monday is also expected to announce sweeping new protections for federal lands and waters in Alaska in tandem with Willow approval.

    Biden will declare the entire US Arctic Ocean off limits to future oil and gas leasing and will announce new rules to protect over 13 million acres in the federal National Petroleum Reserve in Alaska from drilling. In all, the administration will move to protect up to 16 million acres from future fossil fuel leasing.

    The protections will extend to the Teshekpuk Lake, Utukok Uplands, Colville River, Kasegaluk Lagoon and Peard Bay special areas – places that are important habitat to grizzly bears, polar bears, caribou and migratory birds. On Sunday, an administration official said the administration views the new actions as a “firewall” against both future fossil fuel leasing and expansion of existing projects on the North Slope.

    This story has been updated with more information.

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  • Saudi oil giant Aramco becomes latest energy firm to post record profits | CNN Business

    Saudi oil giant Aramco becomes latest energy firm to post record profits | CNN Business

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    Dubai
    CNN
     — 

    Saudi Arabian oil giant Aramco on Sunday reported a record annual net profit of $161.1 billion for 2022, up 46% from the year earlier, on higher energy prices, increased volumes sold and improved margins for refined products.

    The profits follow similar reports in February from international peers BP, Shell, Exxon Mobil and Chevron which have mostly posted record profits for last year.

    Oil prices swung wildly in 2022, climbing on geopolitical worries amid the war in Ukraine, then sliding on weaker demand from top importer China and worries of an economic contraction.

    “Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real – including contributing to higher energy prices,” Aramco’s chief executive Amin Nasser said in the results statement.

    To address those challenges, the company is not only focused on expanding oil, gas and chemicals production, but also investing in new lower-carbon technologies with potential to achieve additional emission reductions, Nasser said.

    Aramco’s capital expenditure rose 18% to $37.6 billion in 2022 and the company said it expects this year’s spending to be around $45.0 billion to $55.0 billion including external investments.

    Aramco declared a dividend of $19.5 billion for the fourth quarter, an increase of 4% from the previous quarter.

    Its board also recommended to issue bonus shares, with eligible shareholders receiving one share for every 10 shares owned.

    Free cash flow reached a record of $148.5 billion in 2022, compared to $107.5 billion in 2021.

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  • Opinion: I was diagnosed with colon cancer at a young age. We’re seeing a lot more cases like mine | CNN

    Opinion: I was diagnosed with colon cancer at a young age. We’re seeing a lot more cases like mine | CNN

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    Editor’s Note: Sara Stewart is a film and culture writer who lives in western Pennsylvania. The views expressed here are solely the author’s own. View more opinion articles on CNN.



    CNN
     — 

    If I could pick one refrain I heard the most from doctors and nurses during my months of treatment for colon cancer in 2018, it’d be this: “You’re so young!” Often, they would follow this up by telling me they were seeing more and more people my age, and younger, being similarly diagnosed. Their distress has been confirmed in a new report released last week, at the start of Colorectal Cancer Awareness Month.

    “(T)he proportion of colorectal cancer cases among adults younger than 55 increased from 11% in 1995 to 20% in 2019. There also appears to be an overall shift to more diagnoses of advanced stages of cancer. In 2019, 60% of all new colorectal cases among all ages were advanced,” CNN noted from the report.

    I was 45 the year I received my shocking diagnosis: stage-3 colon cancer. It was just a few months after the American Cancer Society changed its recommendation for the age at which people should get routine colonoscopies, revising it downward from age 50 to, wouldn’t you know it, 45.

    Because I’m a relentlessly inquisitive patient — sometimes to the annoyance of my doctors — I would always ask their thoughts on the reason for this trend of younger colorectal cancer diagnoses. And always the answer would be the same: some variation of “well, it’s hard to say.”

    While I recognize medical professionals find it difficult to speculate, and might be in legal jeopardy if they do, I also find it infuriating that there isn’t more open discussion about the link between industrially-produced toxins and colorectal cancer. The National Cancer Institute reported in 2020 on scientists “examining factors in the environment as potential causes of early-onset colorectal cancer. Such factors include things like air and water pollution, chemicals in soil and food, and pesticide use.”

    A Spanish study concluded that same year that “residing in the proximity of industries may be a risk factor for colorectal cancer.” But there have been scant studies since then focusing on connecting colorectal cancer and environmental toxins. Considering it’s the fourth most commonly-diagnosed cancer in this country and the second leading cause of cancer deaths, it stands to reason there ought to be substantially more studies dedicated exclusively to it.

    There is a tendency, when one experiences the terror of a potentially fatal disease, to want to deal with it and then, if you’re very lucky, put it behind you. But as the years go on in the wake of my treatment — I’ll be at my five-year mark of no evidence of disease this summer — I find myself increasingly frustrated with a lack of systematic investigation of possible environmental causes.

    In the category of “risk factors” for younger colorectal cancer patients, there are a few regular culprits, grouped under “lifestyle”: certain diets, lack of exercise, excessive weight. For what it’s worth: I am a healthy eater, a thin person and a fitness fanatic with no genetic conditions that would favor colorectal cancer. I’m not arguing that these conditions aren’t contributors, but given the scope of the increase in diagnoses, it seems worth considering that something else could be at play.

    A couple of recently-interviewed experts seem to agree. Dr. Kimmie Ng, director of the Young-Onset Colorectal Cancer Center at the Dana Farber Cancer Institute, told NBC News that “it isn’t just diet and lifestyle, there is something else. We see so many young patients with colorectal cancer who follow very healthy lifestyles and diets.” And Dr. Folasade P. May, an associate professor of medicine in the University of California, Los Angeles Vatche and Tamar Manoukian Division of Digestive Diseases, says that “when something is affecting people who have their birth years in common, then we know it’s something in the environment that has led this whole group of people to have higher rates.”

    Yes! Finally!

    There are an alarming number of reports linking cases of cancer, including colon cancer, to environmental toxins. Industrial toxins and heightened colon cancer rates (often, among other cancers) have been linked in Pompton Lakes, New Jersey; Merrimack, New Hampshire; Satellite Beach, Florida; Akron, Ohio; a school near Ground Zero; Rikers Island, a jail in New York; Juliette, Georgia; and Peterborough, Ontario – the latter being the former site of a General Electric plant.

    Of course, as the Satellite Beach story acknowledges, “The complex interplay of genes and infectious and chemical agents obscure cancer’s many causes. Relatively small numbers of cases to work with, limited available data on occupational risks, lifestyle and demographic factors also complicate cluster investigations.” I’m aware that it’s rare for cancer cluster investigations to find an increase in cancer rates because cancer is so common, and it’s rarer still to find a clear cause for the cancer.

    But I don’t think anyone could reasonably argue there isn’t a large-scale problem with carcinogens in our environment. We are at a global tipping point where, as The Guardian reported last year, “the cocktail of chemical pollution that pervades the planet now threatens the stability of global ecosystems upon which humanity depends.” A study released just last month found that “at least 330 species are contaminated with cancer-causing ‘forever chemicals.’” Those chemicals, known as PFAS and present in widely-used items such as nonstick pans and firefighting foam, are only just now under consideration by the Environmental Protection Agency (EPA) to restrict their presence in drinking water in this country.

    The sheer scale of the problem seems completely overwhelming. So we need to do the things that are within our power, prevention-wise: making healthy choices and being more open in talking to doctors about worrying symptoms, even if it’s embarrassing (it is). Colonoscopies should be available, maybe even recommended, for people in their 30s and early 40s. Perhaps even in their 20s.

    For prevention on an environmental level, I’d like to suggest a model I found here in western Pennsylvania, when I wrote about a tiny town called Grant Township. The people here were fighting an oil and gas company’s attempt to install a fracking waste well that could potentially poison their groundwater with cancer-causing chemicals. As the residents in this coal-centric region know all too well, the only way to prevent toxic pollution is to stop it from happening in the first place. Once it’s in the ground, or air, or water, deep-pocketed companies can and will obfuscate and litigate for years while regular people get sick and die. (I’m still regularly freaked out by the sight of neon-orange streams and rivers in this part of the country, visible proof of the dangers of mine runoff.)

    Six years after my story ran, I’m thrilled Grant is still free from toxic dumping – and has garnered some major attention for its efforts. Jon Perry, a then-township supervisor in Grant, asks in a New Republic story: “Should a polluting corporation have the right to inject toxic waste, or should a community have the right to protect itself?” Their case is currently in front of the state supreme court, so we will soon know Pennsylvania’s stance. (The oil and gas company, for its part, has said in federal district court that Grant’s pushback “is deliberate, arbitrary, and irrational, exceeds the limits of governmental authority, amounts to an abuse of official power, and shocks the conscience.”)

    As we watch colorectal cancer numbers ticking disturbingly upward in the young, maybe it’s time to start asking that kind of question more often and more loudly. Is it easy? No. Is it worth it? Ask anyone who’s survived the hell of chemotherapy, and you’ll have your answer.

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  • CSX freight train derails after striking rockslide in West Virginia, injuring 3 and spilling diesel into river | CNN

    CSX freight train derails after striking rockslide in West Virginia, injuring 3 and spilling diesel into river | CNN

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    CNN
     — 

    A CSX freight train derailed Wednesday morning after striking a rockslide in a remote area of West Virginia, injuring three crew members and spilling diesel fuel into a nearby river, according to a company press release.

    The three crew members were in the locomotive, which caught fire after the derailment, and are being treated for non-life threatening injuries, CSX said. Two were airlifted and the third was taken to the hospital in an ambulance, a Summers County Office of Emergency Management dispatcher told CNN.

    Diesel fuel and oil spilled into the New River, and containment measures will be deployed, CSX said. The company also noted that the coal train was empty and was not transporting hazardous materials. CSX spokesperson Sheriee Bowman told CNN that 22 empty rail cars derailed.

    “The incident posed no danger to the public,” the CSX release said.

    The Federal Rail Administration says it’s actively monitoring the derailment and said that the fire has been extinguished. The administration said the derailment occurred on an Amtrak route, so residual delays may be expected.

    At least one locomotive and one fuel tank went into the New River, the West Virginia Emergency Management Division said. The division said the derailment occurred in a remote area south of Sandstone inside the New River Gorge National Park and Preserve, which in 2021 became America’s 63rd national park.

    The derailment comes about a month after a Norfolk Southern freight train carrying hazardous materials derailed and caught fire near East Palestine, Ohio, releasing potentially dangerous chemicals into the air and water. The incident has spurred bipartisan political efforts to prevent future incidents.

    CSX owns 12 feet from the middle of the train track to either side and is responsible for cleanup, the division said, adding praise for the early efforts of the company and first responders.

    “I’d like to commend the response agencies and CSX for their quick and efficient response,” said Summers County Emergency Manager Steve Lipscomb. “All the agencies worked as a team to provide prompt medical aid and transportation to the injured.”

    No roads are closed and there have been no evacuations of nearby homes, the division said.

    Chief Deputy Tim Adkins of the Summers County Sheriff’s Department said they received a call around 5 a.m. Wednesday about the derailment at a “pretty remote stretch of railway.” There was “extensive damage” to the train but no damage to outside property and no roads were blocked, he said.

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  • Fact check: Trump delivers wildly dishonest speech at CPAC | CNN Politics

    Fact check: Trump delivers wildly dishonest speech at CPAC | CNN Politics

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    Washington
    CNN
     — 

    As president, Donald Trump made some of his most thoroughly dishonest speeches at the annual Conservative Political Action Conference.

    As he embarks on another campaign for the presidency, Trump delivered another CPAC doozy Saturday night.

    Trump’s lengthy address to the right-wing gathering in Maryland was filled with wildly inaccurate claims about his own presidency, Joe Biden’s presidency, foreign affairs, crime, elections and other subjects.

    Here is a fact check of 23 of the false claims Trump made. (And that’s far from the total.)

    Crime in Manhattan

    While Trump criticized Manhattan District Attorney Alvin Bragg, who has been investigating Trump’s company, he claimed that “killings are taking place at a number like nobody’s ever seen, right in Manhattan.”

    Facts First: It isn’t even close to true that Manhattan is experiencing a number of killings that nobody has ever seen. The region classified by the New York Police Department as Manhattan North had 43 reported murders in 2022; that region had 379 reported murders in 1990 and 306 murders in 1993. The Manhattan South region had 35 reported murders in 2022 versus 124 reported murders in 1990 and 86 murders in 1993. New York City as a whole is also nowhere near record homicide levels; the city had 438 reported murders in 2022 versus 2,262 in 1990 and 1,927 in 1993.

    Manhattan North had just eight reported murders this year through February 19, while Manhattan South had one. The city as a whole had 49 reported murders.

    The National Guard and Minnesota

    Talking about rioting amid racial justice protests after the police murder of George Floyd in Minneapolis in 2020, Trump claimed he had been ready to send in the National Guard in Seattle, then added, “We saved Minneapolis. The thing is, we’re not supposed to do that. Because it’s up to the governor, the Democrat governor. They never want any help. They don’t mind – it’s almost like they don’t mind to have their cities and states destroyed. There’s something wrong with these people.”

    Facts First: This is a reversal of reality. Minnesota’s Democratic governor, Tim Walz, not Trump, was the one who deployed the Minnesota National Guard during the 2020 unrest; Walz first activated the Guard more than seven hours before Trump publicly threatened to deploy the Guard himself. Walz’s office told CNN in 2020 that the governor activated the Guard in response to requests from officials in Minneapolis and St. Paul – cities also run by Democrats.

    Trump has repeatedly made the false claim that he was the one who sent the Guard to Minneapolis. You can read a longer fact check, from 2020, here.

    Trump’s executive order on monuments

    Trump boasted that he had taken effective action as president to stop the destruction of statues and memorials. He claimed: “I passed and signed an executive order. Anybody that does that gets 10 years in jail, with no negotiation – it’s not ’10’ but it turns into three months.” He added: “But we passed it. It was a very old law, and we found it – one of my very good legal people along with [adviser] Stephen Miller, they found it. They said, ‘Sir, I don’t know if you want to try and bring this back.’ I said. ‘I do.’”

    Facts First: Trump’s claim is false. He did not create a mandatory 10-year sentence for people who damage monuments. In fact, his 2020 executive order did not mandate any increase in sentences.

    Rather, the executive order simply directed the attorney general to “prioritize” investigations and prosecutions of monument-destruction cases and declared that it is federal policy to prosecute such cases to the fullest extent permitted under existing law, including an existing law that allowed a sentence of up to 10 years in prison for willfully damaging federal property. The executive order did nothing to force judges to impose a 10-year sentence.

    Vandalism in Portland

    Trump claimed, “How’s Portland doing? They don’t even have storefronts anymore. Everything’s two-by-four’s because they get burned down every week.”

    Facts First: This is a major exaggeration. Portland obviously still has hundreds of active storefronts, though it has struggled with downtown commercial vacancies for various reasons, and some businesses are sometimes vandalized by protesters. Trump has for years exaggerated the extent of property damage from protest vandalism in Portland.

    Russian expansionism

    Boasting of his foreign policy record, Trump claimed, “I was also the only president where Russia didn’t take over a country during my term.”

    Facts First: While it’s true that Russia didn’t take over a country during Trump’s term, it’s not true that he was the only US president under whom Russia didn’t take over a country. “Totally false,” Michael Khodarkovsky, a Loyola University Chicago history professor who is an expert on Russian imperialism, said in an email. “If by Russia he means the current Russian Federation that existed since 1991, then the best example is Clinton, 1992-98. During this time Russia fought a war in Chechnya, but Chechnya was not a country but one of Russia’s regions.”

    Khodarkovsky added, “If by Russia he means the USSR, as people often do, then from 1945, when the USSR occupied much of Eastern Europe until 1979, when USSR invaded Afghanistan, Moscow did not take over any new country. It only sent forces into countries it had taken over in 1945 (Hungary 1956, Czechoslovakia 1968).”

    NATO funding

    Trump said while talking about NATO funding: “And I told delinquent foreign nations – they were delinquent, they weren’t paying their bills – that if they wanted our protection, they had to pay up, and they had to pay up now.”

    Facts First: It’s not true that NATO countries weren’t paying “bills” until Trump came along or that they were “delinquent” in the sense of failing to pay bills – as numerous fact-checkers pointed out when Trump repeatedly used such language during his presidency. NATO members haven’t been failing to pay their share of the organization’s common budget to run the organization. And while it’s true that most NATO countries were not (and still are not) meeting NATO’s target of each country spending a minimum of 2% of gross domestic product on defense, that 2% figure is what NATO calls a “guideline”; it is not some sort of binding contract, and it does not create liabilities. An official NATO recommitment to the 2% guideline in 2014 merely said that members not currently at that level would “aim to move towards the 2% guideline within a decade.”

    NATO Secretary General Jens Stoltenberg did credit Trump for securing increases in European NATO members’ defense spending, but it’s worth noting that those countries’ spending had also increased in the last two years of the Obama administration following Russia’s 2014 annexation of Ukraine’s Crimea and the recommitment that year to the 2% guideline. NATO notes on its website that 2022 was “the eighth consecutive year of rising defence spending across European Allies and Canada.”

    NATO’s existence

    Boasting of how he had secured additional funding for NATO from countries, Trump claimed, “Actually, NATO wouldn’t even exist if I didn’t get them to pay up.”

    Facts First: This is nonsense.

    There was never any indication that NATO, created in 1949, would have ceased to exist in the early 2020s without additional funding from some members. The alliance was stable even with many members not meeting the alliance’s guideline of having members spend 2% of their gross domestic product on defense.

    We don’t often fact-check claims about what might have happened in an alternative scenario, but this Trump claim has no basis in reality. “The quote doesn’t make sense, obviously,” said Erwan Lagadec, research professor at George Washington University’s Elliott School of International Affairs and an expert on NATO.

    Lagadec noted that NATO has had no trouble getting allies to cover the roughly $3 billion in annual “direct” funding for the organization, which is “peanuts” to this group of countries. And he said that the only NATO member that had given “any sign” in recent years that it was thinking about leaving the alliance “was … the US, under Trump.” Lagadec added that the US leaving the alliance is one scenario that could realistically kill it, but that clearly wasn’t what Trump was talking about in his remarks on spending levels.

    James Goldgeier, an American University professor of international relations and Brookings Institution visiting fellow, said in an email: “NATO was founded in 1949, so it seems very clear that Donald Trump had nothing to do with its existence. In fact, the worry was that he would pull the US out of NATO, as his national security adviser warned he would do if he had been reelected.”

    The cost of NATO’s headquarters

    Trump mocked NATO’s headquarters, saying, “They spent – an office building that cost $3 billion. It’s like a skyscraper in Manhattan laid on its side. It’s one of the longest buildings I’ve ever seen. And I said, ‘You should have – instead of spending $3 billion, you should have spent $500 million building the greatest bunker you’ve ever seen. Because Russia didn’t – wouldn’t even need an airplane attack. One tank one shot through that beautiful glass building and it’s gone.’”

    Facts First: NATO did spend a lot of money on its headquarters in Belgium, but Trump’s “$3 billion” figure is a major exaggeration. When Trump used the same inaccurate figure in early 2020, NATO told CNN that the headquarters was actually constructed for a sum under the approved budget of about $1.18 billion euro, which is about $1.3 billion at exchange rates as of Sunday morning.

    The Pulitzer Prize

    Trump made his usual argument that The Washington Post and The New York Times should not have won a prestigious journalism award, a 2018 Pulitzer Prize, for their reporting on Russian interference in the 2016 election and its connections to Trump’s team. He then said, “And they were exactly wrong. And now they’ve even admitted that it was a hoax. It was a total hoax, and they got the prize.”

    Facts First: The Times and Post have not made any sort of “hoax” admission. “The claim is completely false,” Times spokesperson Charlie Stadtlander said in an email on Sunday.

    Stadtlander continued: “When our Pulitzer Prize shared with The Washington Post was challenged by the former President, the award was upheld by the Pulitzer Prize Board after an independent review. The board stated that ‘no passages or headlines, contentions or assertions in any of the winning submissions were discredited by facts that emerged subsequent to the conferral of the prizes.’ The Times’s reporting was also substantiated by the Mueller investigation and Republican-led Senate Intelligence Committee investigation into the matter.”

    The Post referred CNN to that same July statement from the Pulitzer Prize Board.

    Awareness of the Nord Stream 2 pipeline

    Trump claimed of his opposition to Russia’s Nord Stream 2 gas pipeline to Germany: “Nord Stream 2 – Nobody ever heard of it … right? Nobody ever heard of Nord Stream 2 until I came along. I started talking about Nord Stream 2. I had to go call it ‘the pipeline’ because nobody knew what I was talking about.”

    Facts First: This is standard Trump hyperbole; it’s just not true that “nobody” had heard of Nord Stream 2 before he began discussing it. Nord Stream 2 was a regular subject of media, government and diplomatic discussion before Trump took office. In fact, Biden publicly criticized it as vice president in 2016. Trump may well have generated increased US awareness to the controversial project, but “nobody ever heard of Nord Stream 2 until I came along” isn’t true.

    Trump and Nord Stream 2

    Trump claimed, “I got along very well with Putin even though I’m the one that ended his pipeline. Remember they said, ‘Trump is giving a lot to Russia.’ Really? Putin actually said to me, ‘If you’re my friend, I’d hate like hell to see you as my enemy.’ Because I ended the pipeline, right? Do you remember? Nord Stream 2.” He continued, “I ended it. It was dead.”

    Facts First: Trump did not kill Nord Stream 2. While he did approve sanctions on companies working on the project, that move came nearly three years into his presidency, when the pipeline was already around an estimated 90% complete – and the state-owned Russian gas company behind the project said shortly after the sanctions that it would complete the pipeline itself. The company announced in December 2020 that construction was resuming. And with days left in Trump’s term in January 2021, Germany announced that it had renewed permission for construction in its waters.

    The pipeline never began operations; Germany ended up halting the project as Russia was about to invade Ukraine early last year. The pipeline was damaged later in the year in what has been described as an act of sabotage.

    The Obama administration and Ukraine

    Trump claimed that while he provided lethal assistance to Ukraine, the Obama administration “didn’t want to get involved” and merely “supplied the bedsheets.” He said, “Do you remember? They supplied the bedsheets. And maybe even some pillows from [pillow businessman] Mike [Lindell], who’s sitting right over here. … But they supplied the bedsheets.”

    Facts First: This is inaccurate. While it’s true that the Obama administration declined to provide weapons to Ukraine, it provided more than $600 million in security assistance to Ukraine between 2014 and 2016 that involved far more than bedsheets. The aid included counter-artillery and counter-mortar radars, armored Humvees, tactical drones, night vision devices and medical supplies.

    Biden and a Ukrainian prosecutor

    Trump claimed that Biden, as vice president, held back a billion dollars from Ukraine until the country fired a prosecutor who was “after Hunter” and a company that was paying him. Trump was referring to Hunter Biden, Joe Biden’s son, who sat on the board of Ukrainian energy company Burisma Holdings.

    Facts First: This is baseless. There has never been any evidence that Hunter Biden was under investigation by the prosecutor, Viktor Shokin, who had been widely faulted by Ukrainian anti-corruption activists and European countries for failing to investigate corruption. A former Ukrainian deputy prosecutor and a top anti-corruption activist have both said the Burisma-related investigation was dormant at the time Joe Biden pressured Ukraine to fire Shokin.

    Daria Kaleniuk, executive director of Ukraine’s Anti-Corruption Action Center, told The Washington Post in 2019: “Shokin was not investigating. He didn’t want to investigate Burisma. And Shokin was fired not because he wanted to do that investigation, but quite to the contrary, because he failed that investigation.” In addition, Shokin’s successor as prosecutor general, Yuriy Lutsenko, told Bloomberg in 2019: “Hunter Biden did not violate any Ukrainian laws – at least as of now, we do not see any wrongdoing.”

    Biden, as vice president, was carrying out the policy of the US and its allies, not pursuing his own agenda, in threatening to withhold a billion-dollar US loan guarantee if the Ukrainian government did not sack Shokin. CNN fact-checked Trump’s claims on this subject at length in 2019.

    Trump and job creation

    Promising to save Americans’ jobs if he is elected again, Trump claimed, “We had the greatest job history of any president ever.”

    Facts First: This is false. The US lost about 2.7 million jobs during Trump’s presidency, the worst overall jobs record for any president. The net loss was largely because of the Covid-19 pandemic, but even Trump’s pre-pandemic jobs record – about 6.7 million jobs added – was far from the greatest of any president ever. The economy added more than 11.5 million jobs in the first term of Democratic President Bill Clinton in the 1990s.

    Tariffs on China

    Trump repeated a trade claim he made frequently during his presidency. Speaking of China, he said he “charged them” with tariffs that had the effect of “bringing in hundreds of billions of dollars pouring into our Treasury from China. Thank you very much, China.” He claimed that he did this even though “no other president had gotten even 10 cents – not one president got anything from them.”

    Facts First: As we have written repeatedly, it’s not true that no president before Trump had generated any revenue through tariffs on goods from China. In reality, the US has had tariffs on China for more than two centuries, and FactCheck.org reported in 2019 that the US generated an “average of $12.3 billion in custom duties a year from 2007 to 2016, according to the U.S. International Trade Commission DataWeb.” Also, American importers, not Chinese exporters, make the actual tariff payments – and study after study during Trump’s presidency found that Americans were bearing most of the cost of the tariffs.

    The trade deficit with China

    Trump went on to repeat a false claim he made more than 100 times as president – that the US used to have a trade deficit with China of more than $500 billion. He claimed it was “five-, six-, seven-hundred billion dollars a year.”

    Facts First: The US has never had a $500 billion, $600 billion or $700 billion trade deficit with China even if you only count trade in goods and ignore the services trade in which the US runs a surplus with China. The pre-Trump record for a goods deficit with China was about $367 billion in 2015. The goods deficit hit a new record of about $418 billion under Trump in 2018 before falling back under $400 billion in subsequent years.

    Trump and the 2020 election

    Trump said people claim they want to run against him even though, he claimed, he won the 2020 election. He said, “I won the second election, OK, won it by a lot. You know, when they say, when they say Biden won, the smart people know that didn’t [happen].”

    Facts First: This is Trump’s regular lie. He lost the 2020 election to Biden fair and square, 306 to 232 in the Electoral College. Biden earned more than 7 million more votes than Trump did.

    Democrats and elections

    Trump said Democrats are only good at “disinformation” and “cheating on elections.”

    Facts First: This is nonsense. There is just no basis for a broad claim that Democrats are election cheaters. Election fraud and voter fraud are exceedingly rare in US elections, though such crimes are occasionally committed by officials and supporters of both parties. (We’ll ignore Trump’s subjective claim about “disinformation.”)

    The liberation of the ISIS caliphate

    Trump repeated his familiar story about how he had supposedly liberated the “caliphate” of terror group ISIS in “three weeks.” This time, he said, “In fact, with the ISIS caliphate, a certain general said it could only be done in three years, ‘and probably it can’t be done at all, sir.’ And I did it in three weeks. I went over to Iraq, met a great general. ‘Sir, I can do it in three weeks.’ You’ve heard that story. ‘I can do it in three weeks, sir.’ ‘How are you going to do that?’ They explained it. I did it in three weeks. I was told it couldn’t be done at all, that it would take at least three years. Did it in three weeks. Knocked out 100% of the ISIS caliphate.”

    Facts First: Trump’s claim of eliminating the ISIS caliphate in “three weeks” isn’t true; the ISIS “caliphate” was declared fully liberated more than two years into Trump’s presidency, in 2019. Even if Trump was starting the clock at the time of his visit to Iraq, in late December 2018, the liberation was proclaimed more than two and a half months later. In addition, Trump gave himself far too much credit for the defeat of the caliphate, as he has in the past, when he said “I did it”: Kurdish forces did much of the ground fighting, and there was major progress against the caliphate under President Barack Obama in 2015 and 2016.

    IHS Markit, an information company that studied the changing size of the caliphate, reported two days before Trump’s 2017 inauguration that the caliphate shrunk by 23% in 2016 after shrinking by 14% in 2015. “The Islamic State suffered unprecedented territorial losses in 2016, including key areas vital for the group’s governance project,” an analyst there said in a statement at the time.

    Military equipment left in Afghanistan

    Trump claimed, as he has before, that the US left behind $85 billion worth of military equipment when it withdrew from Afghanistan in 2021. He said of the leader of the Taliban: “Now he’s got $85 billion worth of our equipment that I bought – $85 billion.” He added later: “The thing that nobody ever talks about, we lost 13 [soldiers], we lost $85 billion worth of the greatest military equipment in the world.”

    Facts First: Trump’s $85 billion figure is false. While a significant quantity of military equipment that had been provided by the US to Afghan government forces was indeed abandoned to the Taliban upon the US withdrawal, the Defense Department has estimated that this equipment had been worth about $7.1 billion – a chunk of about $18.6 billion worth of equipment provided to Afghan forces between 2005 and 2021. And some of the equipment left behind was rendered inoperable before US forces withdrew.

    As other fact-checkers have previously explained, the “$85 billion” is a rounded-up figure (it’s closer to $83 billion) for the total amount of money Congress has appropriated during the war to a fund supporting the Afghan security forces. A minority of this funding was for equipment.

    The Afghanistan withdrawal and the F-16

    Trump claimed that the Taliban acquired F-16 fighter planes because of the US withdrawal, saying: “They feared the F-16s. And now they own them. Think of it.”

    Facts First: This is false. F-16s were not among the equipment abandoned upon the US withdrawal and the collapse of the Afghan armed forces, since the Afghan armed forces did not fly F-16s.

    The border wall

    Trump claimed that he had kept his promise to complete a wall on the border with Mexico: “As you know, I built hundreds of miles of wall and completed that task as promised. And then I began to add even more in areas that seemed to be allowing a lot of people to come in.”

    Facts First: It’s not true that Trump “completed” the border wall. According to an official “Border Wall Status” report written by US Customs and Border Protection two days after Trump left office, about 458 miles of wall had been completed under Trump – but about 280 more miles that had been identified for wall construction had not been completed.

    The report, provided to CNN’s Priscilla Alvarez, said that, of those 280 miles left to go, about 74 miles were “in the pre-construction phase and have not yet been awarded, in locations where no barriers currently exist,” and that 206 miles were “currently under contract, in place of dilapidated and outdated designs and in locations where no barriers previously existed.”

    Latin America and deportations

    Trump told his familiar story about how, until he was president, the US was unable to deport MS-13 gang members to other countries, “especially” Guatemala, El Salvador and Honduras because those countries “didn’t want them.”

    Facts First: It’s not true that, as a rule, Guatemala and Honduras wouldn’t take back migrants being deported from the US during Obama’s administration, though there were some individual exceptions.

    In 2016, just prior to Trump’s presidency, neither Guatemala nor Honduras was on the list of countries that Immigration and Customs Enforcement (ICE) considered “recalcitrant,” or uncooperative, in accepting the return of their nationals.

    For the 2016 fiscal year, Obama’s last full fiscal year in office, ICE reported that Guatemala and Honduras ranked second and third, behind only Mexico, in terms of the country of citizenship of people being removed from the US. You can read a longer fact check, from 2019, here.

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  • Russia’s economy is hurting despite Putin’s bluster | CNN Business

    Russia’s economy is hurting despite Putin’s bluster | CNN Business

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    London
    CNN
     — 

    When Russia launched its full-scale invasion of Ukraine one year ago, Western countries hit back with unprecedented sanctions to punish Moscow and pile pressure on President Vladimir Putin. The aim: to deal an economic blow so severe that Putin would reconsider his brutal war.

    Russia’s economy did weaken as a result. But it also showed surprising resilience. As demand for Russian oil fell in Europe, Moscow redirected its barrels to Asia. The country’s central bank staved off a currency crisis with aggressive capital controls and interest rate hikes. Military expenditure supported the industrial sector, while the scramble to replace Western equipment and technology lifted investment.

    “The Russian economy and system of government have turned out to be much stronger than the West believed,” Putin said in a speech to Russia’s parliament Tuesday.

    Yet cracks are starting to show and they will widen over the next 12 months. The European Union — which spent more than $100 billion on Russian fossil fuels in 2021 — has made huge strides in phasing out purchases. The bloc, which dramatically reduced its dependence on Russian natural gas last year, officially banned most imports of Russian crude oil by sea in December. It enacted a similar block on refined oil products this month.

    Those measures are already straining Russia’s finances as it struggles to find replacement customers. The government reported a budget deficit of about 1,761 billion rubles ($23.5 billion) for January. Expenditure jumped 59% year-over-year, while revenue plunged 35%. Deputy Prime Minister Alexander Novak announced that Russia would cut oil production by about 5% starting in March.

    “The era of windfall profits from the oil and gas market for Russia is over,” Janis Kluge, an expert on Russia’s economy at the German Institute for International and Security Affairs, told CNN.

    Meanwhile, the ruble has slumped to its weakest level against the US dollar since last April. The currency’s weakness has contributed to high inflation. And most businesses say they can’t conceive of growing right now given high levels of economic uncertainty, according to a recent survey by a Russian think tank.

    These dynamics place the country’s economy on a trajectory of decline. And they will force Putin to choose between ramping up military spending and investing in social goods like housing and education — a decision that could have consequences both for the war and the Russian public’s support of it.

    “This year could really be the key test,” said Timothy Ash, an associate fellow in the Russia and Eurasia program at Chatham House, a think tank.

    In a bid to bring Russia to heel for its aggression, Western countries have used their sway over the global financial system, unveiling more than 11,300 sanctions since the invasion and freezing some $300 billion of the country’s foreign reserves. At the same time, more than 1,000 companies, ranging from BP

    (BP)
    to McDonald’s

    (MCD)
    and Starbucks

    (SBUX)
    , have exited or curtailed operations in the country, citing opposition to the war and new logistical challenges.

    Russia’s economic output duly contracted by 2.1% last year, according to a preliminary estimate from the government. But the hit was more limited than forecasters initially expected. When sanctions were first imposed, some economists predicted a contraction of 10% or 15%.

    One reason for Russia’s unexpected pluck was its push toward self-sufficiency following Putin’s annexation of Crimea from Ukraine in 2014. Through a policy known as “Fortress Russia,” the government boosted domestic food production and policymakers forced banks to build up their reserves. That created a degree of “durability,” said Ash at Chatham House.

    The swift intervention of Russia’s central bank, which jacked up interest rates to 20% after the invasion and implemented currency controls to buttress the ruble, was also a stabilizing force. So was the need for factories to increase production of military goods and replace items that had been imported from the West.

    But the greatest support came from high energy prices and the world’s continued thirst for oil and other commodities.

    Russia, the world’s second-largest exporter of crude, was able to send barrels that would have gone to Europe to countries like China and India. The European Union, which imported an average of 3.3 million barrels of Russian crude and oil products per day in 2021, was also still buying 2.3 million barrels per day as of November, according to the International Energy Agency (IEA).

    “It’s a question of natural resources,” Sergey Aleksashenko, Russia’s former deputy minister of finance, said at an event last month hosted by the Center for Strategic and International Studies, a think tank. That meant the economy experienced a decline, but “not a collapse,” he added.

    In fact, Russia’s average monthly oil export revenues rose by 24% last year to $18.1 billion, according to the IEA. Yet a repeat performance is unlikely, presaging increasingly tough decisions for Putin.

    The price of a barrel of Urals crude, Russia’s main blend, fell to an average of $49.50 in January after Europe’s oil embargo — as well as a Group of Seven price cap — took effect. By comparison, the global benchmark stood around $82. That suggests that customers like India and China, seeing a smaller pool of interested buyers, are negotiating greater discounts. Russia’s 2023 budget is based on a Urals price of more than $70 per barrel.

    Finding new buyers for processed oil products, which are also subject to new embargoes and price caps, won’t be easy either. China and India have their own network of refineries and prefer to buy crude, noted Ben McWilliams, an energy consultant at Bruegel.

    Meanwhile, gas exports to Europe have plunged since Russia shut its Nord Stream 1 pipeline.

    A motorcyclist rides past an oil depot in New Delhi, India, on Sunday, June 12, 2022.

    Russia’s government relied on the oil and gas sector for 45% of its budget in 2021. As it plans to maximize defense spending, lower revenues inevitably mean trade-offs. Spending plans for 2023 finalized in December involved a decrease in expenditure on housing and health care, as well as a category that includes public infrastructure.

    “Whatever energy resources are obtained, they’ll be spent on military needs,” said Gulnaz Sharafutdinova, acting director of the Russia Institute at King’s College London.

    The International Monetary Fund still expects Russia’s economy to expand by 0.3% this year and 2.1% the next. Yet any outlook is contingent on what happens in Ukraine.

    “Whether the economy shrinks or expands in 2023 will be determined by developments in the war,” Tatiana Orlova, an economist at Oxford Economics, wrote in a note to clients on Tuesday. Shortages of workers tied to military conscription and emigration pose a key risk, she noted.

    The impact of Western sanctions is poised to develop into a crisis over time. Bloomberg Economics estimates that Putin’s war in Ukraine will slash $190 billion off Russia’s gross domestic product by 2026 compared with the country’s prewar path.

    Sectors that rely on imports have been particularly vulnerable. Domestic car makers such as Avtovaz, which manufactures the iconic Ladas, have struggled with shortages of key components and materials.

    A man talks on his phone near a closed H&M store on December 15, 2022 in Moscow, Russia.

    Russia’s auto industry was already weakened after companies such as Volkswagen

    (VLKAF)
    , Renault

    (RNLSY)
    , Ford

    (F)
    and Nissan

    (NSANF)
    halted production and began to sell their local assets last year. Chinese firms have stepped up their presence, part of a broader trend. Even so, sales of new cars dropped 63% year-over-year in January, according to the Association of European Businesses.

    Across sectors, firms are struggling to plan for the future. A survey of more than 1,000 Russian businesses by the Stolypin Institute of Economic Growth in November found that almost half plan to maintain production over the next one to two years and aren’t thinking about growth. The group said this contributed to a high risk of “long-term stagnation of the Russian economy.”

    Given Putin’s ideological commitment to subsuming Ukraine, he’s unlikely to back down, according to Sharafutdinova at King’s College London. But his war chest “is likely, inevitably, to diminish,” she added.

    Prioritizing military spending will also come at a social cost, with a “slow and creeping” erosion of living standards, she added.

    “In normal times, we might have said that the population would protest against that,” Sharafutdinova said. “But of course, these are not normal times.”

    — Clare Sebastian and Olesya Dmitracova contributed reporting.

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  • Warren Buffett is missing out on this year’s market comeback | CNN Business

    Warren Buffett is missing out on this year’s market comeback | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.


    New York
    CNN
     — 

    Warren Buffett is arguably the most legendary investor of all time. But the Oracle of Omaha has missed out on this year’s stock market rally. So far, at least.

    Shares of Buffett’s Berkshire Hathaway

    (BRKB)
    conglomerate, a company that owns businesses ranging from Geico and the Burlington Northern Santa Fe railroad to consumer brands like Dairy Queen, Duracell and Fruit of the Loom, are down slightly this year — lagging the market, as the S&P 500 is up 6%. (The Nasdaq has done even better, surging 12%.)

    Berkshire Hathaway also has a giant stock portfolio that Buffett helps run. Apple

    (AAPL)
    is now by far the top holding for Berkshire, which also has big stakes in Bank of America

    (BAC)
    , Chevron

    (CVX)
    , American Express

    (AXP)
    and Coca-Cola

    (KO)
    .

    So is Berkshire’s portfolio, dare we say it, a little too boring? After all, if you want exposure to the big blue chips he owns, you could just buy an S&P 500 index fund.

    Buffett, in fact, has promoted that idea to investors many times, arguing that most individual stock pickers will not be able to beat the market. The 92-year-old Buffett, who has a net worth of more than $100 billion according to Forbes, even said that he wants the trustee in charge of his will to put 90% of his wife’s inheritance in index funds.

    Still, investors pay extremely close attention to Buffett every time he speaks. So traders will be poring over every word in his annual shareholder letter, which will be released the morning of Saturday, February 25, along with Berkshire’s latest earnings report.

    Don’t expect any major surprises. Buffett will probably continue to extol the virtues of a long-term, patient approach to investing and give a bullish outlook for the US economy. And to his credit, that usually pays dividends: Berkshire stock was up 3% last year in a down market.

    But market watchers are looking to see what Buffett says about the current inflationary scourge that has had a big impact on consumers and investors. He has lived through a couple of bouts of high inflation, after all.

    “I would like to hear Buffett address what’s going on with interest rates and inflation up as much they are,” said Steve Check, president of Check Capital Management, an investment firm that owns Berkshire shares. “He talked a lot about how concerned he was in the 1970s and 1980s.”

    Buffett has made numerous comments about inflation over the past few decades. And he was particularly nervous during the late 1970s and early 1980s, when soaring oil prices created an inflationary shock that severely hurt the economy.

    “High rates of inflation create a tax on capital that makes much corporate investment unwise,” Buffett said in his 1980 shareholder letter to Berkshire investors. Buffett also described inflation as a gigantic parasitic “tapeworm” for businesses in 1981.

    Buffett may also need to address how top-heavy and concentrated his portfolio has become. Berkshire’s five largest holdings make up about 75% of the company’s stock investments.

    “The portfolio is significantly overweight [in] technology, energy, consumer staples, and financials relative to the S&P 500,” said Bill Stone, chief investment officer with The Glenview Trust Company, another Berkshire shareholder, in a report. Stone noted that Berkshire also has big stakes in Kraft Heinz

    (KHC)
    and oil company Occidental Petroleum

    (OXY)
    .

    Investors also want to hear more about what Buffett plans to do with Berkshire’s massive pile of cash. The company has more than $100 billion on its balance sheet. Are more acquisitions coming?

    Buffett has talked for the past few years about how he’s longing to do an “elephant-sized” deal with Berkshire’s cash. Its most recent big deal was last year’s purchase of insurer Alleghany for $11.6 billion.

    Still, the recent sluggish performance of Berkshire’s stock is unlikely to deter the faithful Buffett fans, many of whom are expected to make the annual pilgrimage to Omaha on May 6 for the company’s shareholder meeting.

    Berkshire vice chairman Charlie Munger will likely be on stage with Buffett. So will Greg Abel, the chairman and CEO of Berkshire Hathaway Energy who Buffett has handpicked to eventually succeed him as Berkshire Hathaway CEO.

    Buffett’s faith in the US economy is well founded. American consumers have proven to be remarkably resilient despite rampant inflation. The surprisingly strong retail sales gains for January is further proof of that.

    Investors will get several more clues about consumer spending this week when several top retailers report earnings.

    Dow components Walmart

    (WMT)
    and Home Depot

    (HD)
    are the highlights. Walmart

    (WMT)
    , which has a massive grocery business, should shed some light on how shoppers are coping with surging grocery prices.

    Walmart could still benefit from its reputation as a place for bargains, though. That could even attract more affluent shoppers looking to save a buck.

    “With inflation remaining elevated in the U.S., we expect Walmart to see continued trade-down benefits…particularly from higher-income customers,” said Arun Sundaram, an analyst at CFRA Research, in a report.

    And investors will be looking for clues about the health of the housing market when Home Depot reports. Placer.ai, a research firm that measures foot traffic at top retailers, said in a recent report that consumers are returning to Home Depot and rival Lowe’s at almost pre-pandemic levels — even despite the housing slowdown.

    One reason? Current homeowners may decide to spend more on renovations if they now plan to stick in their current house longer instead of looking to sell.

    “Although the hot home-buying market is cooling off…foot traffic remains close to pre-pandemic levels due to a shift towards projects aimed at sprucing up a current living space,” said Placer.ai’s Ezra Carmel in a report. “It appears that projects that enhance the prospect of staying in place also have the ability to drive visits.”

    Investors will be keeping close tabs on several other retailers set to report earnings this week, including TJX

    (TJX)
    — the owner of TJ Maxx, Marshalls and HomeGoods — as well as online retailers eBay

    (EBAY)
    , Etsy

    (ETSY)
    , Overstock

    (OSTK)
    , Wayfair

    (W)
    and China’s Alibaba

    (BABA)
    .

    The US government is also set to release personal spending figures for January on Friday, another data point that will give a glimpse of consumers’ financial health.

    Monday: US stock and bond markets closed for Presidents’ Day

    Tuesday: US existing home sales; Eurozone and UK PMI; earnings from Walmart, Home Depot, Medtronic

    (MDT)
    , Fluor

    (FLR)
    , Molson Coors

    (TAP)
    , Caesars Entertainment

    (CZR)
    , Diamondback Energy

    (FANG)
    , Chesapeake Energy

    (CHK)
    , Palo Alto Networks

    (PANW)
    , Coinbase, La-Z-Boy

    (LZB)
    and Hostess Brands

    (TWNK)

    Wednesday: Weekly crude oil inventories; earnings from Stellantis, Baidu

    (BIDU)
    , TJX, Garmin

    (GRMN)
    , Overstock, Wingstop

    (WING)
    , Nvidia

    (NVDA)
    , eBay, Etsy and Bumble

    Thursday: US weekly jobless claims; US Q4 GDP (second estimate); Eurozone inflation; Turkey interest rate decision; earnings from Alibaba, Netease

    (NTES)
    , Keurig Dr Pepper

    (KDP)
    , Wayfair, Newmont, Domino’s

    (DPZ)
    , Papa John’s

    (PZZA)
    , Yeti

    (YETI)
    , Nikola, CNN owner Warner Bros. Discovery, Block

    (SQ)
    , Booking Holdings

    (BKNG)
    , Live Nation

    (LYV)
    , Carvana

    (CVNA)
    , Intuit

    (INTU)
    and Beyond Meat

    (BYND)

    Friday: US personal income and spending; US PCE inflation figures; US new home sales; Japan inflation; Germany Q4 GDP; earnings from CIBC

    (CM)
    , Scripps

    (SSP)
    and Cinemark

    (CNK)

    Saturday: Berkshire Hathaway earnings and Warren Buffett annual shareholder letter

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  • Russia to cut oil output by 5% as sanctions bite | CNN Business

    Russia to cut oil output by 5% as sanctions bite | CNN Business

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    London
    CNN
     — 

    Russia will cut crude oil production by half a million barrels per day starting in March, a little over two months after the world’s major economies imposed a price cap on the country’s seaborne exports.

    “We will not sell oil to those who directly or indirectly adhere to the principles of the price ceiling,” Russian Deputy Prime Minister Alexander Novak said in a statement. “In relation to this, Russia will voluntarily reduce production by 500,000 barrels per day in March. This will contribute to the restoration of market relations.”

    The cut is equivalent to about 5% of Russian oil output.

    Futures prices for Brent crude, the global benchmark, jumped 2.7% Friday to $86 a barrel as traders anticipated a tightening in global supply. US oil gained 1% to trade at $79 a barrel.

    In June last year, the European Union agreed to phase out all seaborne imports of Russian crude oil within the following six months as part of unprecedented Western sanctions aimed at reducing Moscow’s ability to fund its war in Ukraine.

    In a move aimed at further tightening the screws, G7 countries and the European Union agreed in December to cap the price at which Western brokers, insurers and shippers can trade Russia’s seaborne oil for markets elsewhere at $60 a barrel. Earlier this month, EU countries also banned imports of Russia’s diesel and refined oil imports.

    Novak warned that the crude oil price cap could lead to “a decrease in investment in the oil sector and, accordingly, an oil shortage.”

    Neil Crosby, a senior analyst at oil data firm OilX, told CNN that a 500,000 barrel-a-day cut is not the “worst-case scenario” and is still a smaller hit to Russian production than most analysts were expecting last year.

    “But it sets a precedent for further cuts ahead if necessary or desired by Russian authorities,” Crosby said, adding that Moscow could be anticipating difficulty in finding enough demand for its crude.

    Russian Urals crude traded at a discount to Brent crude of $28 a barrel on Friday. Over the past few months, India and China have snapped up cheap oil from Moscow, just as the EU — once Russia’s biggest customer for crude — has ended all imports.

    “Russia currently has a limited pool of buyers for its crudes and has likely found a ceiling to its export sales in the near term, primarily to China and India,” said Alan Gelder, vice president of refining, chemicals and oil markets at Wood Mackenzie.

    According to Reuters, Russia took the decision to reduce its output without consulting the OPEC+ group of producers, which includes Saudi Arabia. OPEC+ decided in October to cut output by 2 million barrels per day and has not adjusted that stance since.

    A potential drop in global oil supply could come at a tricky time. China’s swift reopening of its economy in December after almost three years of strict coronavirus restrictions has pushed up estimates for global oil demand.

    Last month, the International Energy Agency said it expected global demand to surge by 1.9 million barrels per day to reach an all-time high of 101.7 million barrels per day, with China accounting for nearly half of the increase.

    Western sanctions — added to the grinding cost of war — are weighing on Russia’s economy. The country’s budget deficit ballooned to $45 billion last year, or 2.3% of its gross domestic product.

    But Russia’s central bank held its main interest rate at 7.5% Friday, saying that economic activity was better than expected and that inflation was likely to come down this year.

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  • Here’s what keeps Jerome Powell up at night and interest rates high | CNN Business

    Here’s what keeps Jerome Powell up at night and interest rates high | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Federal Reserve Chairman Jerome Powell threw markets into a tizzy on Tuesday as he spoke about the economy alongside his former boss, Carlyle Group co-founder David Rubenstein, at the Economic Club of Washington.

    Stocks struggled for direction as investors tried to get a read on Powell’s economic outlook, attitude towards inflation and on future interest rate hikes. Wall Street cheered as the Fed chair said the disinflationary process has begun, then soured when he said the road to reaching 2% inflation will be “bumpy” and “long” with more rate hikes ahead.

    Markets soared to new highs, before quickly falling to session lows and then recovering to close the day in the green.

    “Powell doesn’t want to play games with financial markets,” said EY Parthenon chief economist Gregory Daco after the conversation. But at the same time, he said Powell wanted to communicate that the Fed’s “base case was not for inflation to come down as quickly and painlessly as some market participants appear to expect.”

    Here’s why Powell thinks bringing down prices will be more difficult than investors anticipate.

    Structural changes in the labor market: The US economy added an astonishing 517,000 jobs in January, blowing economists’ expectations out of the water. The unemployment rate fell to 3.4% from 3.5%, hitting a level not seen since May 1969.

    The current labor market imbalance is a reflection of the pandemic’s lasting effect on the US economy and on labor supply, said Powell on Tuesday in answer to a question about the report. “The labor market is extraordinarily strong,” he said. Demand exceeds supply by 5 million people, and the labor force participation rate has declined. “It feels almost more structural than cyclical.”

    “If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more,” he said.

    Core services inflation: Powell noted that he’s seeing disinflation in the goods sector and expects to soon see declining inflation in housing. But prices remain stubborn for services. Service-sector inflation, which is more sensitive to a strong labor market, is up 7.5% from the year prior through the end of 2022, and has not abated, he said.

    “That sector is not showing any disinflation yet,” Powell said. “There has been an expectation that [higher prices] will go away quickly and painlessly and I don’t think that’s at all guaranteed.”

    Geopolitical uncertainties: Powell also cited concerns that the reopening of China’s economy after the sudden end of Covid-Zero restrictions, plus uncertainty about Russia’s war on Ukraine could also affect the inflation path in ways that remain unclear.

    The labor market is strong, but tech layoffs keep coming. There were around  50,000 tech jobs cut in January, and the trend has continued into February.

    Video conferencing service Zoom is one of the latest to announce layoffs. The company said Tuesday that it’s cutting 1,300 jobs or 15% of its workforce. 

    Zoom CEO Eric Yuan said in a blog post on Tuesday that Zoom ramped up employment  quickly due to increased demand during the pandemic. The company grew three times in size within 24 months, he said and now it must  adapt to changing demand for its services.

    “The uncertainty of the global economy, and its effect on our customers, means we need to take a hard — yet important — look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom’s long-term vision,” he wrote.

    Yuan added that he plans to lower his own salary by 98% and forgo his 2023 bonus. Shares of Zoom closed nearly 10% higher on Tuesday. 

    The announcement comes just one day after Dell said it would lay off more than 6,500 employees.

    Amazon

    (AMZN)
    , Microsoft

    (MSFT)
    , Google and other tech giants have also recently announced plans to cut thousands of workers as the companies adapt to shifting pandemic demand and fears of a looming recession.

    Neel Kashkari, president of the Federal Reserve Bank of Minneapolis told CNN that he is starting to think that the US economy could avoid a recession and achieve a so-called soft landing.

    It’s hard to have a recession when the job market is still so robust, he told CNN’s Poppy Harlow on Tuesday on CNN This Morning.

    Still, “we have more work to do,” Kashkari told Harlow, adding that the labor market is “too hot” and that is a key reason why it is “harder to bring inflation back down.”

    Although many investors are starting to think the Fed may pause after just two more similarly small hikes, to a level of around 5%, Kashkari said he believes the Fed may have to raise rates further. Kashkari has a vote this year on the Federal Open Market Committee, the Fed’s interest-rate setting group.

    It’s a good time to be in the oil business. BP’s annual profit more than doubled last year to an all-time high of nearly $28 billion.

    The British energy company said in a statement that underlying replacement cost profit rose to $27.7 billion in 2022 from $12.8 billion the previous year. The metric is a key indicator of oil companies’ profitability.

    BP

    (BP)
    also unveiled a further $2.75 billion in share buybacks and hiked its dividend for the fourth quarter by around 10% to 6.61 cents per share.

    BP’s shares rose 6% in Tuesday trading following the news. Over the past 12 months, its shares have soared 24%.

    The earnings are the latest in a string of record-setting results by the world’s biggest energy companies, which have enjoyed bumper profits off the back of skyrocketing oil and gas prices.

    Last week, another energy major Shell reported a record profit of almost $40 billion for 2022, more than double what it raked in the previous year after oil and gas prices jumped following Russia’s invasion of Ukraine.

    On Wednesday it was TotalEnergie

    (TTFNF)
    s turn. The French company posted annual profit of $36.2 billion for 2022, double the previous year’s earnings.

    Disney has found itself in the middle of a culture war battle that could end up transferring Disney World’s governance to a board appointed by Florida Gov. Ron DeSantis. And that may be the least of Disney’s problems, writes my colleague Chris Isidore.

    The company faces a media industry in turmoil, plunging cable subscriptions, a still-recovering box office, massive streaming losses, activist shareholders, possible reorganization and layoffs and growing labor disputes with employees. That’s a lot for CEO Bob Iger to handle.

    Iger, who retired as CEO in 2020 only to be brought back in November, has been mostly quiet about his plans for the company since his return. That ends at 4:30 p.m. ET Wednesday when he is set to begin an earnings call with Wall Street investors.

    Click here to read more about what to look for on what is certain to be a closely-followed call.

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  • BP’s annual profit more than doubles to $28 billion | CNN Business

    BP’s annual profit more than doubles to $28 billion | CNN Business

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    Hong Kong
    CNN
     — 

    BP’s annual profit more than doubled last year to nearly $28 billion, extending a record run of earnings for the world’s oil majors that is adding to calls for higher taxes on the windfall gains.

    The British energy giant said in a statement that underlying replacement cost profit rose to $27.7 billion for 2022, compared with $12.8 billion the previous year. The metric is a key indicator of oil companies’ profitability.

    BP

    (BP)
    also announced on Tuesday a further $2.75 billion in share buybacks and hiked its dividend for the fourth quarter by around 10% to 6.61 cents per share.

    The earnings are the latest in a series of record-setting results by the world’s biggest energy companies, which have enjoyed bumper profits off the back of soaring oil and gas prices.

    Last week, Shell

    (RDSA)
    reported a record profit of almost $40 billion for 2022, more than double what it raked in the previous year after oil and gas prices soared following Russia’s invasion of Ukraine.

    — This is a developing story and will be updated.

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  • Diesel prices fall in Europe despite ban on Russian fuel | CNN Business

    Diesel prices fall in Europe despite ban on Russian fuel | CNN Business

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    London
    CNN
     — 

    Europe’s ban on Russia’s diesel arrived painlessly on Sunday.

    Although the EU cut off its biggest supplier, diesel futures prices in the bloc fell 1.6% on Monday, amounting to a 20% loss over the past two weeks as demand in the region has waned, and efforts by countries to stockpile ahead of the ban have started to pay off.

    The price drop will be met with relief by millions of the continent’s truckers, drivers and businesses that rely on diesel. About 96% of trucks, 91% of vans and 42% of passenger cars in the European Union run on the fuel, according to the European Automobile Manufacturers’ Association.

    “The expectation was that, when the ban came in, diesel supply into Europe would tighten but, actually, that’s currently not materializing,” Mark Williams, a research director at consultancy Wood Mackenzie, told CNN.

    The diesel ban comes two months after the bloc placed an embargo on seaborne crude oil imports from Russia, as part of a package of sanctions against Moscow for its invasion of Ukraine. Russia accounted for 29% of the region’s total diesel imports last year, data from Rystad Energy shows.

    Countries have prepared for the latest ban by ramping up imports of Moscow’s diesel in recent months. Europe’s imports were up nearly 19% in the fourth quarter of 2022 compared with the same period the previous year, according to energy data provider Vortexa.

    “Those stocks should act as a buffer against the immediate loss of Russian diesel imports,” Williams said.

    Demand across the bloc is also weak.

    Data from OilX, an oil analytics firm that, shows that diesel demand in Europe was down between the start of November and the end of January compared with the same period a year before.

    Analysts attribute the slump partly to warmer-than-usual weather in the region, where diesel is also used as a heating fuel, and high prices. Despite recent drops, wholesale prices are still 10% above their level the same time last year.

    At the pump, the average cost of a liter of diesel in the EU hit €1.80 ($1.93) on January 30, up from €1.60 ($1.72) the same time last year, data from the European Commission shows.

    Neil Crosby, a senior analyst at OilX, told CNN that “persistently weak demand data” in Europe had helped it “substantially boost its gasoil stocks over the last few months.”

    Still, it may take a few months for the full impact of the ban to be felt as Europe starts to import more diesel from suppliers further afield, incurring higher shipping costs.

    The bloc is already importing significantly higher volumes of diesel from the United States, the Middle East and parts of Asia, according to Williams at Wood Mackenzie.

    Even so, those imports will not be enough to “offset the loss of Russian barrels into Europe,” once Europe whittles down its stockpile, he said, adding that prices relative to other importing regions could start to rise from the third quarter this year.

    The impact of the ban on Russia may also be underwhelming.

    Moscow has managed to reroute more of its diesel to other markets since July of last year. Exports to Turkey and North Africa have soared 154% between November and January compared with the same period a year before, according to Rystad Energy.

    Jorge León, a senior vice president at the firm, sees this trend continuing, he told CNN, also predicting that Russian exports to South America are likely to stay at “marginal” levels.

    However, he added that the United States could redirect some of its current diesel exports to South America to Europe, with Russian diesel then “find[ing] a home” in South America.

    OilX’s Crosby noted that there are “many more” potential buyers of Moscow’s diesel compared with its crude exports.

    “Most Russian diesel barrels will manage to make it to global markets,” he said. “The notion that Russian diesel will have a very hard time finding new homes is beginning to lose credibility.”

    — Julia Horowitz contributed reporting.

    Correction: An earlier version of this article incorrectly reported the measurement of diesel that has fallen in Europe. Diesel demand has fallen.

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  • US, EU, G7 and Australia announce new price cap on Russian petroleum products | CNN Politics

    US, EU, G7 and Australia announce new price cap on Russian petroleum products | CNN Politics

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    CNN
     — 

    The US and allies are trying to further limit Russia’s ability to make money and finance its war efforts with new price limits on products like gasoline and fuel oil, a senior Treasury official announced Friday – adding to sanctions on Russian energy sales in response to the country’s invasion of Ukraine.

    “Our intent is not to crash the Russian economy,” the official told reporters Friday. “Our intent is to make it impossible for the Kremlin to continue to make the choice of propping up the economy and also paying for their war.”

    The agreement between the US, the G7, the European Union and Australia places a price cap on “seaborne Russian-origin petroleum products,” the US Department of Treasury said. There are two price levels: one applies to “premium-to-crude” petroleum products like diesel, kerosene and gasoline, which will be capped at $100 USD per barrel, and “discount-to-crude” petroleum products like fuel oil, which will be capped at $45 USD per barrel.

    “The thing that we’re focused on is cutting off the revenue,” the official said. “We’re also going after their military industrialized complex and supply chain so they can’t use the money they have to buy the weapons they need. Our approach to this is really to go after the things that are crucial to the Kremlin’s war effort and their ability to prop up their economy.”

    In December, the same group implemented a price cap on crude oil – which the Treasury official said was already impeding Russia’s ability to finance the war. They added Russia had “openly acknowledged” the price cap was hurting the country’s economy. Data released by Russia showed that monthly tax revenues from energy sales declined 46% from the month prior.

    Officials shrugged off reports that, despite numerous sanctions, Russia’s economy is still expected to rebound and may even outpace Germany and Great Britain. The senior Treasury official said economically, the country “doesn’t function any longer like a normal economy.”

    “They’ve shut it down largely, meaning that if you have money of Russia, they’ll let you keep putting money in Russia, but you can’t take money out. They no longer allow foreign capital coming into Russia,” the official said. “They’re needing to spend more money to prop up their economy because they become a closed economy.”

    The reality, the official said, is that Russia’s budget deficit is growing “because the war is costing them more money” because the “bravery of the Ukrainian people” and the “weapons” were a surprise to them.

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  • Shell profits double to record $40 billion | CNN Business

    Shell profits double to record $40 billion | CNN Business

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    Hong Kong/London
    CNN
     — 

    Shell made a record profit of almost $40 billion in 2022, more than double what it raked in the previous year after oil and gas prices soared following Russia’s invasion of Ukraine.

    Europe’s largest oil company by revenue reported adjusted full-year earnings of $39.9 billion on Thursday — more than double the $19.3 billion it posted in 2021 — driven by a strong performance in its gas trading business. The company’s stock was up 1.7% in London.

    The company reported $9.8 billion in profit in the fourth quarter. Just over 40% of Shell’s full-year earnings came from its integrated gas business, which includes liquified natural gas trading operations.

    Shell CEO Wael Sawan said the results “demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.”

    The earnings are the latest in a series of record-setting results by the world’s biggest energy companies, which have enjoyed bumper profits off the back of soaring oil and gas prices.

    ExxonMobil this week posted record full-year earnings of $59.1 billion. Last month, Chevron

    (CVX)
    reported a record full-year profit of $36.5 billion.

    That has led to renewed calls for higher taxation. Governments in the European Union and the United Kingdom have already imposed windfall taxes on oil company profits, with the proceeds used to help households struggling with rising energy bills.

    Shell said it expected to pay an additional $2.3 billion in tax related to the EU windfall tax and the UK energy profits levy. The company paid $13 billion in tax globally in 2022.

    Shell

    (RDSA)
    also announced another $4 billion share buyback program and confirmed it would lift its dividend per share by 15% for the fourth quarter.

    This is a developing story and will be updated.

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  • Biden administration takes another step toward advancing a controversial oil drilling project in Alaska | CNN Politics

    Biden administration takes another step toward advancing a controversial oil drilling project in Alaska | CNN Politics

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    CNN
     — 

    The Interior Department’s Bureau of Land Management on Wednesday advanced the controversial Willow oil drilling project on Alaska’s North Slope, releasing the final environmental impact statement before the project can be approved.

    The ConocoPhillips proposed Willow drilling plan is a massive and decadeslong project that the state’s bipartisan Congressional delegation says will create much-needed jobs for Alaskans and boost domestic energy production in the US.

    But environmental groups fear the impact of the planet-warming carbon pollution from the hundreds of millions of barrels of oil it would produce – and say it will deal a significant blow to President Joe Biden’s ambitious climate agenda.

    The final environmental report from the Bureau of Land Management recommends a slightly smaller version of what ConocoPhillips originally proposed, putting the number of drilling sites at three instead of five. The Department of Interior is also recommending other measures to try to lower the pollution of the project, and recommending a smaller footprint of gravel roads and pipelines.

    In a statement, the Interior Department said it “has substantial concerns about the Willow project and the preferred alternative as presented in the final SEIS, including direct and indirect greenhouse gas emissions and impacts to wildlife and Alaska Native subsistence.”

    The Biden administration now has 30 days to issue a final decision on the project, after which drilling could begin. In its statement, Interior said it could select a different alternative on the project, including taking no action or further reducing the number of drill sites.

    ConocoPhillips and members of the Alaska Congressional delegation have been pushing the administration to finalize the project by the end of February to take advantage of cold and icy conditions needed to drill in the Arctic. If the company misses that window, it could push the project’s start date to next year.

    Erec Isaacson, president of ConocoPhillips Alaska, said in a statement that nearly five years of regulatory review should conclude “without delay.” Isaacson added the project is “ready to begin construction immediately” after Interior’s final decision is issued.

    According to the Interior Department’s own estimation, the project would produce 629 million barrels of oil over the course of 30 years and would release around 278 million metric tons of planet-warming carbon emissions. Climate groups say that’s equivalent to what 76 coal-fired power plants produce every year.

    “The world and the country can’t afford to develop that oil,” said Jeremy Lieb, a senior attorney for environmental law firm Earthjustice. Lieb and other advocates are concerned that Willow may be the start of a future drilling boom in the area.

    “Willow is just the start based on what industry has planned,” Lieb said. “The total estimate for the amount of oil that could be accessible in the region around Willow is 7 or 8 billion barrels.”

    For the Willow project, ConocoPhillips is proposing five drilling sites on federal land in Alaska’s North Slope, and the project would include a processing facility, pipelines to transport oil, gravel roads, at least one airstrip and a gravel mine site.

    The project – and the public comment process leading up to it – has also received heavy criticism from the nearby Alaska Native village of Nuiqsut, which some villagers evacuated last year during a gas leak in a ConocoPhillips project in the area. Nuiqsut officials recently released a letter calling the Bureau of Land Management’s public input process “disappointing and inadequate,” criticizing both the Trump and Biden administration’s timeline.

    The bureau’s “engagement with us is consistently focused on how to allow projects to go forward; how to permit the continuous expansion and concentration of oil and gas activity on our traditional lands,” Nuiqsut officials wrote in their letter.

    Alaska’s entire Congressional delegation – including newly elected Rep. Mary Peltola, a Democrat – have urged the White House and Interior to approve the project, saying it would be a huge boost to state’s economy.

    Sen. Lisa Murkowski, in particular, has been urging the White House and Biden personally to greenlight Willow, she told CNN.

    “I’ve been pretty persistent on this,” she told CNN in an interview this summer. “Let’s just say, any conversation I’ve ever had with the White House, anyone close to the White House, I’ve brought up the subject of Willow.”

    As gas prices spiked last summer, Murkowski, Sen. Joe Manchin of West Virginia, a Democrat, and other Senate Republicans tightened the pressure on Biden to approve a major domestic oil drilling project. Environmental advocates, meanwhile, argued the project will not bring US gas prices down any time soon, as the infrastructure will take years to build.

    “When you think about those things that should be teed up and ready to go, this is one where in my view there’s really no excuse for why we should see further delay,” Murkowski said. “This is something that’s been in the works that’s gone through so much process, across multiple administrations.”

    This story has been updated with more information.

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  • ExxonMobil earnings more than double to annual record | CNN Business

    ExxonMobil earnings more than double to annual record | CNN Business

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    New York
    CNN Business
     — 

    ExxonMobil’s earnings slowed from a peak earlier in the year but the oil giant still reached a full-year record profit more than double what it reported a year ago.

    The company earned adjusted income of $14 billion in the quarter, down from the record $18.7 billion it earned in the third quarter, but it was up from $8.8 billion in the fourth quarter of 2021. That was also better than the forecast from analysts surveyed by Refinitiv.

    The solid fourth quarter lifted full-year earnings to $59.1 billion from $23 billion in 2021, and well above the previous record net income of $45.2 billion it reported for 2008, the year that saw the record high for oil and US gasoline prices before the records set last year.

    The company was helped by soaring oil prices following Russia’s invasion of Ukraine nearly a year ago. But oil prices have been coming down from the peak reached in June, and are now down to pre-invasion levels.

    Oil companies such as ExxonMobil have faced criticism from the White House and some members of Congress for taking much of the profit and using it to repurchase shares and increase dividend, rather than increase production.

    CEO Darren Woods defended the company’s investments in production, saying the company’s North American refineries had their greatest output ever, and that it had its highest global refinery production since 2012.

    “Our results clearly benefited from a favorable market,” said Woods. “But, to take full advantage of the undersupplied market our work began years ago, well before the pandemic when we chose to invest counter-cyclically. We leaned in when others leaned out, bucking conventional wisdom. We continued with these investments through the pandemic and into today.”

    Still, the company returned $29.8 billion to shareholders during the year, with about half of it coming through dividends and half through share repurchases.

    That compares to $22.4 billion in spending on exploration and other capital spending. It also reported a $22.8 billion, or 336%, increase in cash on hand, ending the year with $29.6 billion in cash on its balance sheet. And it repaid $7 billion in debt.

    The full-year results come to an average of $1,874 of profit for every second during the course of the year. Since it takes about two minutes to pump 20 gallons of gas, that means that in the time it takes to fill a nearly empty tank of a full-size SUV or pickup, ExxonMobil earned about $225,000, on average.

    Shares of ExxonMobil were slightly lower in premarket trading initially after the report, perhaps on investor disappointment that no new share repurchase program was announced. But shares were slightly higher in morning trading after the open.

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