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TRUMP’S OIL SANCTIONS ARE OFFICIAL ONE DAY BEFORE ELECTIONS: It appears President Trump managed to avoid calamity at the pump from affecting Election Day on Tuesday, as oil prices fell amid his reinstatement of sanctions on Iran’s oil exports.

U.S. oil prices fell 13 cents to $63 per barrel, as the Brent oil price, used to measure the global price, remained stable and flat at about $73 per barrel.

The price spread between the U.S. West Texas price and Brent could make U.S. oil more attractive on the global market, driving up oil demand for U.S. crude oil amid sanctions.

But experts on Monday morning warn the real test of whether U.S. sanctions will raise prices will come this winter.

Iran has taken one million barrels of oil off the global market, but the “biggest risk” comes from the next million, said Ann-Louise Hittle, vice president at the global consulting group Wood Mackenzie.

The global market will face its most precarious time this winter, as the market tightens, she said. Saudi Arabia has stepped up production, along with Kuwait and the UAE to minimize price spikes. But will it be enough?

“We think there’s just enough growth in supply from elsewhere to muddle through the next few months, meet winter demand and avert a price spike,” said Hittle.

The Brent oil price should hold around $78 pr barrel, “but it’s a very fine line,” she continued, explaining that OPEC’s ability to inject massive amounts of oil into the market is not what it was two years ago. Its surplus oil supply was once at 4 million to 5 million barrels per day two years ago, but today there’s only 700,000 barrels per day of additional oil available to come into the market within 30 days notice.

“That means the market is vulnerable to strong demand in a cold winter or any new supply outage,” Hittle added.

TRUMP ADMINISTRATION CONFIRMS EIGHT EXEMPTIONS AS IRAN SANCTIONS TAKE HOLD: The State Department confirmed Monday morning that it is exempting seven countries and Taiwan from oil sanctions on Iran, allowing them to continue buying Iranian crude, at least temporarily.

The nations granted waivers include China, which buys the most oil from Iran, India — the second largest buyer — South Korea, Japan, Turkey, and Greece. Waivers last 180 days under U.S. law.

The sanctions these countries are exempted from are intended to punish nations that buy oil from Iran, after Trump rejected the nuclear deal with Tehran in May, by cutting them off from the U.S. financial system.

What “exemptions” actually mean: Secretary of State Mike Pompeo on Friday emphasized that those earning exemptions are making “important moves” to transition to zero imports of Iranian oil, as a condition of being granted more time to do so.

“This is really not a waiver, but an extension of a deadline with the understanding everyone is going to zero,” Joseph McMonigle, president of the Abraham Group, and a former chief of staff of the Energy Department in the George W. Bush administration, told Josh.

Is Trump really softening his policy? The waivers reflect the unease the Trump administration felt at the prospect of higher oil and gas prices during voting season. Yet sanctions experts and oil market practitioners don’t expect the waivers to be lenient enough to save Iran’s economy, which is highly dependent on oil exports.

“This is not a softening of a zero tolerance policy,” Mark Dubowitz, CEO of the Foundation for Defense of Democracies who studies sanctions policy, told Josh. “It’s a carefully calibrated and phased strategy to cripple Iranian oil revenues without driving up the price of oil.”

Oil market observers say the administration is simply recognizing the implausibility, and price risks, of blocking the world from Iranian oil. Iran is the third-largest producer of the oil cartel OPEC, providing more than 2 percent of global oil output.

“The president gets it now,” said Richard Nephew, a senior research scholar at Columbia University’s Center on Global Energy Policy who directed sanctions policy at the State Department in the Obama administration. “Providing exemptions to sanctions is a common-sense victory,” Nephew told Josh. “Stopping purchases from Iran was never going to happen.”

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IRAN VOWS TO BYPASS ‘ILLEGAL’ OIL SANCTIONS: Iranian President Hassan Rouhani vowed Monday morning to defy the ban on the sales of its oil. “I announce that we will proudly bypass your illegal, unjust sanctions because it’s against international regulations,” Rouhani said in a speech that was broadcast on Iranian television. “We are in a situation of economic war, confronting a bullying power. I don’t think that in the history of America, someone has entered the White House who is so against law and international conventions.”

Pompeo warned reporters Friday that Iran would try to break the sanctions.

“Make no mistake about it, the Iranians will do everything they can to circumvent these sanctions — that’s unsurprising to me,” Pompeo said. “They’ll turn off ships, they’ll try and do it through private vessels, they’ll try and find third parties that don’t interact with the United States to provide insurance mechanisms.”

He insisted the U.S. is ready with “many” and “varied” efforts to counter those circumvention efforts.

Campaign to label Trump ‘hostile’: Iranian media also began quoting government officials around the Mideast, and anyone else they could find, to label Trump’s sanctions as a “hostile act,” while hoisting the hope that Europe will be able to effectively oppose oil restrictions.

Baqir Jabr al-Zubeidi, Iraq’s former finance minister now turned prominent regional politician, called the sanctions a “hostile act” by the Trump administration, according to Iranian state-run media, the Islamic Republic News Agency.

Zubeidi said the sanctions will prove unsuccessful, calling the oil export restrictions “a plot” by the U.S. to “plunder” Iran’s resources, which is a common criticism of U.S. policy in the region since the Iraq invasion of 2003.

Even pundits from the U.S. were used in the oil sanctions pushback campaign. “America is losing all over the world, and under Trump, America is losing at a very quick pace,” Louis Farrakhan said, addressing an audience at University of Tehran.

“The U.S. has never been a democracy,” Farrakhan said. “It has always favored the rich, the powerful, the connected.”

Iran tries to project discontent ahead of midterms: The Iranian foreign ministry also attempted to convey the idea that the U.S. midterms will be a referendum on U.S. foreign policy.

“Voices heard from within the United States indicate there is a widespread discontent in the American society especially elites, scholars and various social groups, particularly over foreign policy,” Bahram Qassemi, foreign ministry spokesman, told reporters on Monday.

“We are facing Iranophobia and anti-Iranism fueled by the United States,” Qassemi added, expressing hope that new wisdom could come to Washington.

EXXON, CHEVRON COME UP WINNERS IN TRUMP’S IRAN SANCTIONS GAMBIT: Trump’s withdrawal the Iran deal has proved a lucrative one for the shareholders who own oil companies like ExxonMobil and Chevron.

On Friday, both producers credited higher crude prices, which began rising after the U.S. halted purchases from Iran and pressured other countries to do the same, as drivers of third-quarter earnings that topped Wall Street expectations by wide margins.

Chevron’s earnings of $2.39 a share outpaced the $2.06 average estimate from analysts surveyed by FactSet by 16 percent, while ExxonMobil’s profit of $1.46 a share topped projections by 20 percent. The climb in crude prices — which reached their highest level since 2014 this year — coupled with more expensive coal and natural gas may ultimately curb global economic growth, the International Energy Agency warned earlier this month.

TRUMP GRANTS WAIVERS FOR CIVIL NUCLEAR COOPERATION WITH IRAN: The Trump administration announced new sanctions waivers on Monday for countries involved in civil nuclear cooperation with Iran.

Secretary of State Mike Pompeo granted the waivers for three projects currently underway to make nuclear energy use an option for Iran while eliminating the risk of nuclear weapons proliferation.

Without the waivers, the U.S. sanctions that went into effect on Monday would have interfered with civil nuclear cooperation with Iran that was permitted under the Obama administration’s nuclear deal.

The 2015 agreement allowed Iran and leading European powers to seek cooperation and scientific exchange in the field of nuclear science and technology while overhauling some of the Iranian facilities that have been used for military purposes.

TRUMP SECOND-GUESSES HIS OWN GOVERNMENT, SCIENTISTS ON CLIMATE CHANGE: Trump again contradicted his own government’s scientific findings and sowed doubt about humans’ dominant role in causing climate change in an interview with Axios published Sunday night. The president was shown a copy of the National Climate Assessment, a federally mandated report the Trump administration released last November that said that it is “extremely likely” that human activities are the “dominant cause” of global warming.

Trump dismissed it and said he didn’t read it.

“I want everybody to report whatever they want, but ultimately I’m the one that makes that final decision. I can also give you reports where people very much dispute that,” Trump said. “Is there climate change? Yeah. Will it go back like this, I mean will it change back? Probably,” Trump added. “I think we’ve contributed, we certainly contribute, I mean, there’s certain pollutants that go up and there’s certain things that happen.”

SUPREME COURT BLOCKS TRUMP’S ATTEMPT TO THROW OUT KIDS’ CLIMATE LAWSUIT: The Supreme Court is denying the Trump administration’s request to block a climate change lawsuit a group of 21 children brought against the federal government for threatening their future livelihoods.

Supreme Court Chief Justice John Roberts issued a 3-page decision Friday night in Juliana v. United States allowing the case to move forward.

Roberts had stopped the case from having its day in court on Oct. 29, while the high court reviewed the children’s legal arguments.

The high court’s order said the administration should now turn to the 9th Circuit Court of Appeals for relief from the litigation.

WOLF AVOIDS GREEN ATTACKS TO DOMINATE RACE IN FRACKING STATE: The Pennsylvania gubernatorial election shows that a Democrat can manage the left flank of the party and run a dominant race even in a major fracking state.

Tom Wolf, the Keystone State’s Democratic governor facing reelection, has managed to dodge most of the criticism against him on energy in recent years, a lot of which came from the “Keep it in the Ground” environmental movement during the 2016 presidential race.

Back then, it was common for Wolf to be in the crosshairs of groups like the Center for Biological Diversity and others, which targeted him for not doing enough to combat climate change by not seeking to ban drilling and fracking in his state, John reports.  

Environmentalists are not targeting him: The environmentalists have taken their sites off of Wolf this time around. Instead, most of the emphasis has been placed two anti-fracking ballot initiatives out West: the first one in Colorado, and the second in California called Measure G to ban fracking and protect San Luis Obispo County from new oil wells.

Wolf isn’t even on Greenpeace’s list of Democrats to go after, even though they’re still intent on pressuring Democratic governors to take decisive action to block fossil fuel development.

“Now that we’re only a few days from midterm election day, our support is laser-focused on key ballot initiatives in Colorado and Washington that could have a huge impact on climate and energy policy, if passed,” Greenpeace spokeswoman Cassady Craighill told John.

RUNDOWN

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