AFP

Biden administration officials and oil industry executives huddled in Washington on Thursday to discuss potential steps to address runaway gasoline prices, and while both sides called the talks constructive, no concrete plans for relief emerged.

High prices at the pump are weighing on American consumers — and damaging President Joe Biden’s approval rating.

Heading into the gathering, Energy Secretary Jennifer Granholm said she hoped the meeting would result in refiners boosting gasoline supplies to lower prices for the summer vacation driving season.

Afterwards, the Energy Department said the talks had had a “productive focus on dissecting the current global problems of supply and refining,” and promised “ongoing dialogue” to “alleviate the current supply and price challenges.” 

Similarly, the American Petroleum Institute and American Fuel & Petrochemical Manufacturers called the meeting a “constructive discussion about ways to address rising energy costs and create more certainty for global energy markets.”

Chevron, Phillips 66 and Shell all released upbeat statements, with Shell US President Gretchen Watkins praising Granholm for setting a “collaborative tone” by noting that Shell and others had shifted some refining capacity to produce biofuels.

But no practical steps to immediately boost supply were revealed.

White House press secretary Karine Jean-Pierre called the gathering a “first step.”

“Clearly we want to come up with solutions,” Jean-Pierre told a press briefing. “There’s going to be other steps to get there.”

– Uneasy ties –

Biden and the oil industry have an uneasy relationship, in part over the White House’s efforts to restrict drilling in some federal areas due to environmental concerns, and decisions like canceling the Keystone pipeline project on his first day in office.

The US president has also blasted industry leaders in recent days over skyrocketing profits and their reluctance to boost capital spending. 

Industry leaders released a letter to Biden ahead of Thursday’s meeting that alluded to his upcoming trip to Saudi Arabia, urging him to visit US refineries and other industry sites to understand the potential for “American-made energy solutions.”

But with Biden’s approval ratings plunging due to soaring inflation, the president has turned to the industry for relief.

– Short-term solutions? –

Gasoline prices currently stand at $4.94 a gallon, a bit below all-time highs, but up more than 60 percent from the year-ago level.

In a letter earlier this month to oil giants, Biden said high fuel prices were a key factor in the “intense financial pain the American people and their families are bearing.”

He urged ExxonMobil, Chevron and other industry players to “provide concrete, near-term solutions that address the crisis.”

In response, Chevron Chief Executive Mike Wirth pledged to work with the administration, but faulted Biden’s comments that “at times vilify” the industry — drawing a Biden quip that Wirth was being “mildly sensitive.”

The price surge follows Russia’s invasion of Ukraine, which exacerbated an already tight energy supply situation, sending crude oil prices sharply higher. 

The rise in prices also reflects the diminished state of refining capacity after the industry mothballed some plants during Covid-19 lockdowns, and did not reopen them amid uncertain long-term growth prospects with the buildup of electric vehicles.  

Biden’s policy thus far has centered on a huge increase in crude oil from the Strategic Petroleum Reserve. 

On Wednesday, the US president proposed a temporary fuel tax break, a measure that received a lukewarm reception on Capitol Hill.

For energy specialist Andrew Lebow of the Commodity Research Group consultancy, “there is very little refiners can do at this point.”

“If they could produce more, certainly they would be given that the margins are incredible,” he said.

On Wednesday, Granholm acknowledged that building new refineries could not be done overnight, but said the administration wanted answers about plants that had been taken offline.

She also wanted to talk about supply chain issues, questioning if the industry could help on that front.

Kevin Book, head of research at Clearview Energy Partners, said there were areas where the government could provide aid, such as facilitating procurement of truck drivers and sand for fracking. 

Adopting a broadly constructive tone on regulation could also boost investment, he said.

The largest banks operating in the US market have sufficient resources to withstand a severe economic downturn and continue providing financing to American families and firms, the Federal Reserve said Thursday.

The Fed subjected 33 banks to its annual “stress test” exercise, to gauge whether they would be able to weather a steep global recession.

In the hypothetical crisis, financial markets plummet, commercial real estate and corporate debt markets face substantial strain, US unemployment reaches 10 percent and the economy contracts by 3.5 percent.

The results “showed that banks continue to have strong capital levels, allowing them to continue lending to households and businesses during a severe recession,” the Fed said. 

The scenario for this year’s test was even bleaker than the one used last year, but the outcome was the same, showing all the banks would maintain a sufficient “cushion” despite total projected losses of $612 billion, according to the report.

“Despite the larger post-stress decline this year… capital ratios remain well above the required minimum levels throughout the projection horizon” of nine quarters, the report said.

The stress tests, implemented in the wake of the 2008 global financial crisis, apply to banks with at least $100 billion in total assets, including the top tier designated as “global systemically important banks.”

Smaller banks are only subjected to the stress tests every two years, so the results are not directly comparable to 2021, which tested 23 institutions.

Among the banks examined in both years, there were an additional $50 billion in losses under the tougher scenario, a Fed official told reporters.

However, the official stressed that the dire case applied is only hypothetical and not a forecast.

With the results in hand, banks can announce any plans for dividend payments and share buybacks starting Monday at 2030 GMT, the official said.

The Fed ordered limits to such distributions in June 2020 as the coronavirus pandemic caused a sharp economic downturn, but relaxed the restrictions in December 2020 before removing them following last year’s tests.

An Italy-based firm’s hacking tools were used to spy on Apple and Android smartphones in Italy and Kazakhstan, Google said Thursday, casting a light on a “flourishing” spyware industry.

Google’s threat analysis team said spyware made by RCS Lab targeted the phones using a combination of tactics including unusual “drive-by downloads” that happen without victims being aware.

Concerns over spyware were fueled by media outlets reporting last year that Israeli firm NSO’s Pegasus tools were used by governments to surveil opponents, activists and journalists.

“They claim to only sell to customers with legitimate use for surveillanceware, such as intelligence and law enforcement agencies,” mobile cybersecurity specialist Lookout said of companies like NSO and RCS.

“In reality, such tools have often been abused under the guise of national security to spy on business executives, human rights activists, journalists, academics and government officials,” Lookout added.

Google’s report said the RCS spyware it uncovered, and which was dubbed “Hermit”, is the same one that Lookout reported on previously.

Lookout researchers said that in April they found Hermit being used by the government of Kazakhstan inside its borders to spy on smartphones, just months after anti-government protests in that country were suppressed.

“Like many spyware vendors, not much is known about RCS Lab and its clientele,” Lookout said. “But based on the information we do have, it has a considerable international presence.”

– Growing spyware industry –

Evidence suggests Hermit was used in a predominantly Kurdish region of Syria, the mobile security company said.

Analysis of Hermit showed that it can be employed to gain control of smartphones, recording audio, redirecting calls, and collecting data such as contacts, messages, photos and location, Lookout researchers said.

Google and Lookout noted the spyware spreads by getting people to click on links in messages sent to targets.

“In some cases, we believe the actors worked with the target’s ISP (internet service provider) to disable the target’s mobile data connectivity,” Google said.

“Once disabled, the attacker would send a malicious link via SMS asking the target to install an application to recover their data connectivity.”

When not masquerading as a mobile internet service provider, the cyber spies would send links pretending to be from phone makers or messaging applications to trick people into clicking, researchers said.

“Hermit tricks users by serving up the legitimate webpages of the brands it impersonates as it kickstarts malicious activities in the background,” Lookout researchers said.

Google said it has warned Android users targeted by the spyware and ramped up software defenses. Apple told AFP it has taken steps to protect iPhone users.

Google’s threat team is tracking more than 30 companies that sell surveillance capabilities to governments, according to the Alphabet-owned tech titan.

“The commercial spyware industry is thriving and growing at a significant rate,” Google said.

Germany moved closer to rationing natural gas on Thursday as it raised the alert level under an emergency plan after Russia slashed supplies to the country.

“Gas is now a scarce commodity in Germany,” Economy Minister Robert Habeck told reporters at a press conference.

Russia was using gas “as a weapon” against Germany in retaliation for the West’s support for Ukraine following Moscow’s invasion, Habeck said, with the aim of “destroying” European unity.

But the Kremlin dismissed Germany’s suggestion there were political motives behind the limits to supply as “strange”.

Germany, like a number of other European countries, is highly reliant on Russian energy imports to meet its needs.

Triggering the “alarm” level — the second of three steps under the emergency plan — brings Germany a step closer to the final stage that could see gas rationing in Europe’s top economy.

The increased level reflected a “significant deterioration of the gas supply situation”, Habeck said.

“If we do nothing now, things will get worse,” Habeck said.

– Russian rebuttal –

Russian energy giant Gazprom cut supplies to Germany via the Nord Stream pipeline by 60 percent last week, blaming the new limits on delayed repairs.

Germany has dismissed the technical justification provided by Gazprom, instead calling the move a “political decision”. 

Kremlin spokesman Dmitry Peskov said Thursday there was “no double meaning” in the supply decision.

“Our German partners are well aware of the technological servicing cycles of a pipeline,” he said.

“It’s strange to call it politics.”

In recent weeks, Gazprom has stopped deliveries to a number of European countries, including Poland, Bulgaria, Finland and the Netherlands.

Supplies of gas to Europe’s largest economy were “secure”, Habeck said, but action was still required to prepare for the winter ahead.

To mitigate the risks from a supply cut, the government mandated gas storage facilities be filled to 90 percent by the beginning of December.

Currently, the country’s stores stand just under 60 percent full, above the average level of previous years.

In France, the government said Thursday it aimed to fill its natural gas reserves by autumn as it too braces for a drop in supply from Russia.

France will also build a new floating terminal to receive more liquefied natural gas (LNG) supplies by ship, Prime Minister Elisabeth Borne announced.

“We can do without Russian gas,” French Energy Transition Minister Agnes Pannier-Runacher said later on BFM Business TV.

That depends on the floating terminal beginning operating as planned and France filling its strategic reserve, she added.

The European Bank for Reconstruction and Development (EBRD) meanwhile said it would lend 300 million euros to Moldova to for gas purchases.

– Supply stoppage –

The German government expects supply to stop between July 11 and July 25 for annual maintenance on the Nord Stream pipeline.

If deliveries do not resume after the service period, Germany could face a shortage of gas as soon as “mid-December”.

Since the outbreak of the war in Ukraine, Germany has managed to reduce the share of its natural gas supplied by Russia from 55 percent to around 35 percent.

The government has found new sources of supply, accelerated plans to import gas in the form of LNG by sea, and put aside 15 billion euros ($15.8 billion) to buy gas to fill storage facilities.

Germany also decided to reactivate mothballed coal-fired power plants to take the burden for electricity generation off gas.

In contrast, the government shrugged off calls to extend the operational lifetime of its nuclear power plants.

Prolonging the use of the final reactors set to be taken off the grid at the end of the year was “not an option”, it said Wednesday.

Germany had to look to see what “energy saving potential” existed, Habeck said Thursday. 

Households could “make a difference” by conserving energy, after Germany launched a campaign to encourage fuel-saving measures, he said, while industry could also make a further contribution.

The US Food and Drug Administration on Thursday said it was ordering all products produced by Juul Labs off the market after finding the vaping giant had failed to address certain safety concerns.

The decision, which Juul said it would appeal, clears the way for rival brands to increase their share of the market it once dominated.

It is also a blow for tobacco giant Altria, maker of Marlboro cigarettes, which acquired a 35 stake in Juul in 2018 to diversify its business strategy in the face of falling smoking rates.

“Today’s action is further progress on the FDA’s commitment to ensuring that all e-cigarette and electronic nicotine delivery system products currently being marketed to consumers meet our public health standards,” said FDA Commissioner Robert Califf in a statement. 

Products affected include the Juul device and its pods, which currently come in the flavors Virginia tobacco and in menthol, at nicotine concentrations of five and three percent.

After completing a two-year review of the company’s marketing application, the FDA found the data presented “lacked sufficient evidence regarding the toxicological profile of the products,” it said.

“In particular, some of the company’s study findings raised concerns due to insufficient and conflicting data – including regarding genotoxicity and potentially harmful chemicals leaching from the company’s proprietary e-liquid pods,” it added.

Juul said in a statement that it “respectfully” disagrees with the FDA’s findings and that its products met the statutory standard of being “appropriate for the protection of the public health.”

“We intend to seek a stay and are exploring all of our options under the FDA’s regulations and the law, including appealing the decision and engaging with our regulator,” Juul’s chief regulatory officer Joe Murillo said.

Juul was blamed for a surge in youth vaping over its marketing of fruit and candy flavored e-cigarettes, which it stopped selling in 2019.

In January 2020, the FDA said sale of e-cigarettes in flavors other than tobacco or menthol would be illegal unless specifically authorized by the government.

– Ban is ‘uncertain’ –

The agency has approved some e-cigarette products from other makers such as Reynolds American, the current market leader, NJOY and Logic Technology Development.

Juul has argued that vaping products can provide a solution to the harmful health impacts from conventional cigarettes.

Juul’s products “exist only to transition adult smokers away from combustible cigarettes,” Chief Executive KC Crosthwaite said on the company’s website, adding that the company is “working hard” to rebuild its reputation following an “erosion of trust over the past few years.”

The impact of the FDA’s decision is “far from certain” given the likelihood of an appeal, Goldman Sachs said in an analysis issued before the announcement. “There are already several precedents for reversal” of such orders, it noted.

Juul currently holds around 36 percent share of the US vaping market, a substantial reduction on the roughly 70 percent it held before the FDA’s actions on flavored e-cigarettes, the Goldman Sachs note said.

On Tuesday, President Joe Biden’s administration announced it would develop a new policy requiring cigarette producers to reduce nicotine to non-addictive levels, a move that, if successful could upend the tobacco industry.