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Quest Means Business

EU Bans Seaborne Russian Oil, Imports As Price Cap Imposed; Russia Launches New Wave Of Missile Attacks; Living Test To Test: China's COVID Restrictions; Brazil Dominating South Korea In Round of 16 Match; Lava Creeps Closer To Major Hawaii Highway; England's Raheem Sterling Rushes Home After Burglary. Aired 3-4p ET

Aired December 05, 2022 - 15:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:28]

RAHEL SOLOMON, CNN BUSINESS HOST: Investors right now nervous about how long Fed hikes might drag on.

Let's take a look at the market. You can see the Dow is off 500 points or about one-and-a-half percent. Those are the markets and these are the main

events.

A new agreement to cap Russian oil prices comes into force with fallout across insurance, shipping, and energy.

Foxconn revenue falls 29 percent as it grapples with COVID issues.

And Brazil has a commanding lead over South Korea on the action underway at the World Cup.

Live from New York. It is Monday, December 5th. I'm Rahel Solomon, in for Richard Quest, and I too mean business.

Good evening.

Tonight, Western allies have launched their biggest assault get on Russia's oil revenue. The EU has now banned new Russian oil shipments. It is also

working with the G7 and Australia to impose a price cap on Russian crude.

The move aims to choke off funding for Moscow's war machine, but Russia says that it will not recognize the price cap, even if it means cutting

production. Still, global oil prices are lower. You can see WTI is off about three-and-a-half percent, Brent off about 3.2 percent.

The price cap was set at $60.00 a barrel. It will be implemented by shipping and insurance companies. Under the new rules, they will be barred

from handling the oil unless it is sold for a price that is equal to or less than the price cap. Shipments that meet that test can still be

delivered to countries outside the EU.

Now, given that the most important shipping and insurance firms are based in G7 countries, well, it could be difficult for major buyers like India

and China to get around the price cap. However, Russia may also try to use its own ships.

So far, the rollout has been difficult. "The Financial Times" reporting a backlog of ships is building in Turkey.

Clare Sebastian with us now.

Clare, lots of moving parts here. Oil prices were higher earlier, as we said they are now lower. I think there are so a lot of questions not only

about the impact of these measures, but also how it will work. Walk us through that.

CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, I think look, this is obviously a very delicate balance that the EU and G7 have tried to strike by setting

the cap at $60.00. They are trying to keep Russian oil flowing all through this crisis, Rahel, it's been clear that the US and its Western allies,

Ukraine's allies do not want Russian oil to come off the market because of the destabilizing effect it will have on the global economy. It could cause

another supply shock.

So the $60.00 barrel mark is designed to leave some profit for Russia. We think the breakeven is around thirty to forty, possibly slightly lower.

There are various estimates of that, but they should still make a profit, although it is slightly below some estimates of what Euro's crude is

trading for right now, so it will still eat into some of Russia's potential revenues.

But in terms of how it will work well, this should be seen really as sort of a market mechanism to reduce demand for Russian oil, which sells over

the price gap, if that makes sense.

It is not so much a ban because if you're going to use shipping services or insurance that comes from non-EU or non-G7 countries, you can still do it.

Russia, as you say is looking at ways to circumvent this by amassing according to reports a shadow fleet of its own, apparently slightly rickety

old tankers to try to get around this as well. So, there are loopholes.

Russia, though, has said that it will potentially retaliate. It has threatened to cut off customers who comply with the cap. If they do that,

then the delicate balance struck by the setting of the price cap at $60.00 might not work. We might still see some destabilization to the global

market.

SOLOMON: And lots of questions about if in fact, they do that which we'll discuss with our next guest, Clare. But while I have you, as we said the

Dow was off more than 500 points as we came to air, what is driving the market action there?

SEBASTIAN: Yes, a little bit of reverse psychology here, I think for the market, Rahel. It seems to be the same thing that sent oil prices sharply

lower this afternoon, that there was some unexpectedly good data on the US services industry.

Good data, perhaps could be interpreted by the Fed as the fact that the US economy is resilient enough to withstand more rate hikes and of course the

market does not want the Fed to continue doing those aggressive rate hikes.

Add to that the fact that the market hit that milestone last week, the 20 percent increase from its recent low, that signals the start of a new bull

market could be that traders are looking for an excuse to lock in some profits there, so clearly there are a few forces driving that market this

afternoon.

[15:05:06]

SOLOMON: It is an interesting point Clare. It almost feels like in this environment two good news is bad news. It makes you think of the employment

report here in the US last week, which was a good report and then the market sort of took a downturn. Clare Sebastian, good to have you.

Several experts have expressed doubt that the price cap will be effective. As we said, Russia says that it will not recognize it and Ukrainian

President Zelenskyy said that the cap should be even lower. He said that $60.00 per barrel will still allow Russia to fund the war.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): Now the world discussion on price caps that is on limiting the export price of

Russian oil has ended unfortunately, with no serious decision, because you wouldn't call it a serious decision to set such a limit for Russian prices,

which is quite comfortable for the budget of a terrorist state.

(END VIDEO CLIP)

SOLOMON: Tatiana Mitrova is a Research Fellow at the Center on Global Energy Policy at Columbia University. She joins me now from Cyprus.

Tatiana, wonderful to have you on this day.

I want to start with the actual price cap. So $60.00 a barrel. Help me understand how that compares to what Russia is currently receiving for its

oil and what its breakeven is. I'm not sure if you heard our reporter there, our correspondent there who said that some suggestions are

breakeven, is about $30.00 per barrel. What more can you tell us about that?

TATIANA MITROVA, RESEARCH FELLOW, CENTER ON GLOBAL ENERGY POLICY AT COLUMBIA UNIVERSITY: Yes, I would agree, it's about $30.00 to $35.00 per

barrel and it was tested during COVID in April 2020, so this is indeed the breakeven, and $60.00 per barrel is pretty comfortable. Actually, it is the

price Russian oil companies were dreaming about in 2016 and 2018, when the prices were at $45.00.

So $60.00 is really quite comfortable, and even if the mechanism is working properly, which is not actually clear, then we might not see the real

results of oil embargo and oil price cap regulation until mid-2023.

The Russian oil companies will definitely try to adapt to use all the bypassing routes to develop these shadow fleets to create Russia's own

shipping insurance company, so they will look for all the ways how to bypass this regulation, and I would say, Russian economy anyway would not

collapse in half a year due to the lack of oil revenues. It is still quite resilient, and financial resources accumulated in the National Welfare Fund

during the previous years are definitely sufficient to cover the budget deficit, at least for one year or so.

SOLOMON: So, Tiana, so you're saying that these threats from Russia to slash exports, to slash production, you believe that Russia certainly has

the economic might to do it because they have the reserves you say, of about a-year-and-a-half?

MITROVA: Yes, something like that. Definitely unpleasant, it will threaten the oil industry revenues of the companies, but actually, they also have

quite good balance sheet given the very high prices in the beginning of this year.

SOLOMON: So then how significant of an impact do you think these measures that were just unveiled will actually have to Russia? I mean, some have

said, as we said, Ukrainian President Zelenskyy said that it is weak. Others have said it will have a real, but more modest impact. What do you

think?

MITROVA: Well, sanctions are never designed to have an immediate effect, and therefore I wouldn't expect any significant heat for the Russian

economies in the coming months.

But in the longer term, these restrictions, they will definitely undermine Russia's ability to generate revenues via oil sector, and then look, once

this mechanism is introduced, the price cap level, it will be reviewed every second month, and so it can be slowly lowered.

Once all the routes, all the reporting system is organized, it will be much more easy to monitor the flows and actually to restrict them if needed.

SOLOMON: Tatiana, which nation stands to benefit from these type of measures. I mean, do we see more purchases from nations like China and

India, Turkey, perhaps? I mean, which nations do you think stand to actually benefit from this?

MITROVA: Yes, you've named them. China, India definitely, but we can see also that their appetite for Russian oil, which was booming in the spring

and summer has reached a sort of plateau. So China has its own understanding of energy security and they do not want to increase their

reliance on Russian oil.

India has some technical constraints on its refineries and therefore, Russian sorts of oil are not always appropriate.

[15:10:16]

Turkey is definitely benefiting and increasing Russian oil supplies, but again, its capacities are limited. So, I would say that Asian or better to

say non-OECD market, it is not unlimited. Actually, the Middle Eastern producers, the OPEC countries are also benefiting from this whole situation

because now they can conquer the European market, which is getting rid of Russian oil.

SOLOMON: Tatiana Mitrova, it has been wonderful to have you. I mean, I still feel like there are so many questions and really just a lot to watch

and see how this all plays out.

Tatiana Mitrova, great to have you.

MITROVA: Thank you.

SOLOMON: And President Vladimir Putin sending a message to Ukraine and his own people by driving across a key bridge linking Russia to Crimea. It

comes close in two months after a huge explosions severely damaged the bridge cutting off the critical supply route for Russian forces. Mr. Putin

there getting out of his Mercedes to inspect the repairs made.

Ukraine meanwhile, facing a new round of Russian missile attacks. Listen to what it sounded like in Kyiv.

[VIDEO CLIP PLAYS]

SOLOMON: Air raid sirens blaring across the capital. President Zelenskyy says that most of the missiles were shot down. This, meantime is the

aftermath of a strike in the Zaporizhzhia region. Ukrainian official says that it killed two people.

And in the eastern town of Bakhmut, shelling continues. It has been besieged by Russian troops. Amid the fierce fighting, Ukraine's forces are

getting help from an unlikely source -- Russian volunteers.

Sam Kiley reports.

(BEGIN VIDEOTAPE)

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Cesar (ph) is Russian. He is taking a break at a monastery from fighting Russians in

nearby Bakhmut.

It's a relief from scenes like this, Bakhmut's Ukrainian Field Hospital. He has been defending this Ukrainian town from Russia's most intense assault

along an 800-mile front.

Artillery duels and trench warfare have almost destroyed Bakhmut as Russia throws its Army at a bid for victory after months of defeats to the North

and South.

Defending Bakhmut against the Russian Motherland is a religious imperative for Cesar.

(CESAR speaking in foreign language.)

KILEY (voice over): "The fighting is very brutal now," he says. "There are very few prisoners."

When you see those Russians in your gun sights. What do you think? And what do you feel?

(CESAR speaking in foreign language.)

KILEY (voice over): "I believe that these people who have broken the law of man and the law of God, I have no pity for them. I take them prisoner if I

can, but most often, I just have to kill them."

KILEY (on camera): So have you killed a lot of your countrymen?

(CESAR speaking in foreign language.)

KILEY (voice over): "A dozen and a half."

This is the remains of a Russian Orthodox monastery. Now for Vladimir Putin, the Orthodox Church is absolutely central to his vision of the

Russian world.

For some Russians, though, that's a world they don't want to live in. Indeed, they don't want it to survive.

Ukraine's Orthodox Church broke with Moscow three years ago. This is all that's left of a rebranded Ukrainian Orthodox St. George's monastery after

nine months of war.

UNIDENTIFIED MALE: Putin says that he defends the traditional values here, and this is the result of his defending -- ruined old monastery.

KILEY (voice over): Bini (ph) has been fighting in Bakhmut for weeks against mercenaries from Russia's Wagner Company, many of them convicted

criminals.

(BINI speaking in foreign language.)

KILEY (voice over): "It is obvious," he says. When private companies hire criminals and convicts, imagine, a man kills once and they put him in jail

then he kills a second time and he becomes a repeat offender under the law. Then he gets let out of jail and given a gun. That's not a person. That's a

beast."

After a form of Wagner deserter, Yevgeny Nushin was murdered in a video that was praised by Wagner's boss, Yevgeny Prigozhin, Bini is in no doubt

how he would be treated if captured.

(BINI speaking in foreign language.)

KILEY (voice over): "It will be the end, 100 percent, but it'll just be more painful."

The Russian Legion does claim to be in the hundreds, and it says many more back home are trying to join Ukraine's Army.

Alongside their Ukrainian allies, the Russian Legion is focused on the battle for Bakhmut. The aim of the war after is more ambitious.

(CESAR speaking in foreign language.)

KILEY: He says, "I'm doing my military and Christian duty. I defend the Ukrainian people, and when Ukraine is free, I will carry my soul to Russia

to free it from tyranny."

(END VIDEOTAPE)

SOLOMON: And coming up, China is easing more COVID restrictions and the country's stock market is celebrating. What rules have been lifted and what

it means for the economy, next.

(COMMERCIAL BREAK)

[15:17:49]

SOLOMON: Welcome back. Chinese stocks rallied on Monday as the country eases more COVID restrictions. People no longer need to test negative to

ride public transit in Beijing, Shenzhen, or Shanghai.

The Hang Seng rose more than four percent. Indices in Japan and Australia also closed higher.

Foxconn meantime says that it is gradually restoring production at a factory known as iPhone City. The plant in Central China was rattled last

month by a COVID outbreak and locked down protests by its workers. Foxconn says, the situation has now been brought under control.

Foxconn says that its monthly revenue dropped 29 percent in November, and analysts say that the slowdown is affecting iPhone sales. "The Wall Street

Journal" now reporting that Apple is now accelerating plans to make more of its products in places like India.

China's harsh restrictions have weighed on residents. In Beijing, activities as simple as using a public restroom require proof of a negative

test.

CNN's Selina Wang has more.

(BEGIN VIDEOTAPE)

SELINA WANG, CNN INTERNATIONAL CORRESPONDENT: This is the kind of line Beijing are standing outside in the cold to get their COVID tests, a 48-

hour test is required to get into most places, but there aren't many places to go. Much of Beijing is still closed down.

This is one of the most popular tourist places in the city, but the restaurants are largely closed and the malls are pretty empty.

So this McDonald's is still open, but for takeaway only. But even to get takeaway, you've got to prove that you're clear of COVID. Here is how I do

it. I open up the health app on my smartphone, I scan the QR code.

So it says, I've got a green code, and I've got a recent COVID test, so I'm good to go.

This code dictates all of our daily lives in China. Green means good to go. Red means I may have to isolate at home or go to a mass quarantine

facility. This allows China to track the movements of virtually all 1.4 billion people in the name of contact tracing. I've got to scan my code to

get into a taxi, a public park, a mall or a coffee shop -- even a public bathroom.

I ran into a group of delivery people on the street. They've got to do COVID tests every single day to do their jobs. This woman tells me the

pandemic has been hard on her. I asked her why. She says, it is because she's scared of the virus.

[15:20:05]

Getting COVID in China is unlike anywhere else in the world. You and your close contacts all get sent to a Quarantine Center. This is a Convention

Center in Beijing that's been turned into a massive quarantine facility with thousands of beds.

But some of these facilities in the country, they are in very rundown and unsanitary condition and then your whole building or community could go

into lockdown.

(SELINA WANG speaking in foreign language.)

WANG (voice over): I spoke to a man who has been in and out of quarantine six times already just this year. He tells me his whole building of more

than 200 families went to a quarantine facility last month, because they were considered close contacts.

He says he is not scared to get COVID because omicron is less severe and his whole family has been vaccinated.

I approached a few people just released from this mass Quarantine Center here. I asked if they had tested positive for COVID. Yes, the man nods and

says they have recovered. "How many days did you spend in there?" I asked. "Seven days," he said.

Unprecedented protests recently erupted across China.

(CROWD chanting in foreign language.)

WANG (on camera): They are chanting that they don't want COVID tests. They want freedom.

Authorities swiftly cracked down on the protesters, but they are finally softening their stance on Zero-COVID. Some cities are lifting lockdowns,

changing COVID testing requirements.

Under some conditions, people can now quarantine at home if they have COVID, which is a huge deal.

But this country has already built up a whole infrastructure around Zero COVID, spending all of its resources on quarantine facilities and COVID

testing. So it's going to be a long and slow exit from Zero COVID.

Selina Wang, CNN, Beijing.

(END VIDEOTAPE)

SOLOMON: The COP15 Biodiversity Summit starts Wednesday in Montreal. The hope is delegates will set a series of targets for the preservation of

wildlife and nature, one of which is centered around plastic waste.

The UN says that three-fourths of all plastic ends up as waste. The beauty brand, Garnier is trying to change that. It has opened a new plastics

recycling center in India, materials recycled there will then be integrated into packaging.

Adrien Koskas is the Global Brand President of Garnier, and he joins me now from Paris.

Adrien, wonderful to have you.

ADRIEN KOSKAS, GLOBAL BRAND PRESIDENT, GARNIER: Hi, Rachel. Thanks for having me.

SOLOMON: Of course. So beyond just this packaging announcement, we also know that Garnier is phasing out wipes. I mean, how much of these measures

do you think consumers will actually notice?

KOSKAS: We are really trying to make a difference when it comes to bringing greener products in the beauty industry. Garnier is committed to green

beauty for all and therefore we're really trying to scale greener solutions.

In the case of wipes, you know, we have decided to stop all the productions of wipes by next year, because we also know we have a super strong product,

which is the micellar water that you can use with a reusable cotton pad.

So there is no waste coming from the wipe, and you can reuse this pad and avoid all the waste that could end up in the ocean that you were mentioning

before.

SOLOMON: How much demand is there for greener, more environmentally friendly beauty products? I mean, I think about right now the trends of

sort of the no makeup-makeup look, right? There is sort of already a trend toward cleaner, more natural looking beauty. What's the demand like for

that?

KOSKAS: There is a trend for greener products. I think some consumers are very sensitive to that and they really want to buy more committed products,

but really, the challenge in front of us is to have much more scale, and that is really the purpose of Garnier because we know that, you know it's

more of a niche today and making those greener products accessible to all is really our mission and convincing people to behave in a more sustainable

manner.

So bringing more, you know, recycled plastic to the market, bringing refill to our hair care range, so we just announced that this hair care brand is

now completely refillable.

So we allow consumers to have a really easy way to replenish our product and reduce their plastic consumption. We know that if we want people to

switch to the green switch, we need no tradeoffs. So it's really easy for them to do it, and that's the role of Garnier.

SOLOMON: Well, well help me understand that. So in making the green switch, is it more expensive? Are the products more expensive when you have to use

recycled packaging, for example? I mean, is it one for one in terms of price?

KOSKAS: Not necessarily. If I take this example, it is both better for the planet and better for the wallet because actually, this product sells the

shampoo at a much lower price 15 percent in average. It is the discretion of the retailers obviously, but you can make savings as a consumer and be

more sustainable, and we think that's a really strong element today given the strong inflation.

SOLOMON: Well, speaking of savings and speaking of inflation, are you seeing any impact of inflation globally on consumer habits? Are people

trading down for example, trading down for maybe some of the more premium brands and trading down perhaps more into some Garnier brands or are you

seeing people start to pull back because you think of beauty as a discretionary category? What do you see?

[15:25:10]

KOSKAS: So, you know, I think beauty is a very resilient market. We've seen it time and time again in times of crisis. Beauty category continues to

grow. What we can say, and I think it is a great challenge for us is that people are more demanding with their money. They want, you know, great

value for what they buy, and I think it forces us to deliver great quality at a good price, which is really what we're trying to do at Garnier.

SOLOMON: I see. So have you seen any change in consumer behavior as of yet though, even in terms of just trading down?

KOSKAS: No, we haven't seen that. And you know, Garnier is so accessible that really the idea is to make sure we can talk to them more.

SOLOMON: How are supply chains? I mean, this time last year, I believe supply chains, we're sort of on the front page of every certainly American

newspaper, but are supply chains right now for Garnier?

KOSKAS: It is normalizing. It's been worse. It's not completely normal. But you know, we're working really hard with our partners in the factories and

the purchasing to stabilize things and have a really good feel rate.

SOLOMON: Can I ask? One thing that's always amused me is this idea in economic theory, the lipstick theory that in times of an economic downturn,

women will actually enjoy or actually buy more lipstick? Because they feel like it's a small treat. It's a small indulgence. Are you seeing any sort

of uptick in makeup sales?

KOSKAS: So Garnier doesn't have makeup, but for sure, we see that the makeup category and beauty in general is very dynamic. And it's a great

category for people to have little pleasures that really gives them -- that boosts their self-confidence.

SOLOMON: Okay, wonderful to see you. Wonderful to have you, Adrien Koskas. Thank you.

KOSKAS: Thank you, Rachel.

SOLOMON: And coming up, the game is still going, but the party has already started for Brazil. Right now, they are four goals up against South Korea

at the World Cup.

All the highlights, coming up next.

(COMMERCIAL BREAK)

[15:30:09]

SOLOMON: Welcome back. Brazil's proven why many people are picking them to win the World Cup. They are taking on South Korea right now in Qatar. We're

into the second half. It was always going to be a tough ask for South Korea. And so far, Brazil men making it look easy. They are four goals up.

Coy Wire is following all of the action from Atlanta.

Look, Coy, this has been a World Cup of upsets, but it doesn't look like this is going to be an upset.

COY WIRE, CNN SPORTS ANCHOR: Oh, my goodness. Brazil starting off hotter than the hinges on the gates of Hades, Rahel. They are up four-nil against

South Korea in their knockout round matchup and that would match their biggest margin of victory in World Cup history. Look at the scenes, a sea

of people in the streets for the five-time World Cup champions Brazil, playing inspired in the knockout round match against South Korea.

Their star Neymar back at it after missing the last game with an injured ankle. Their 82-year-old football legend Pele tweeted before the match that

he is watching and cheering from the hospital. Brazil just minutes away now, Rahel, from a booking a spot in the final eight. Now meantime, a match

to remember between 2018 finalist Croatia and Japan who've taken down Giants in this World Cup beating both Spain and Germany earlier.

Japan started slow this entire World Cup. Zero first half goals until 43rd minute and this one the goal from Daizen Maeda getting the samurai blue on

the board first, one-nil Japan. But in the 55th minute, Croatia strike back. A jaw dropping header from Ivan Perisic. Keep in mind we're watching

this replay in slow motion. He hones in on this thing from a mile away and then he has the focus and precision to propel it past the keeper to level

the match and send it to penalties.

Japan though, unable to out finesse the fortress named Dominik Livakovic, Takumi Minamino, no. Kaoru Mitoma, no. And Maya Yoshida also no. So, all

the Croatian would need will be Mario Pasalic sending the nation to the quarter finals. They are rolling, they have a team full of great players.

They're hoping to head back for a second straight World Cup to the finals.

SOLOMON: And Coy, I also want to ask you about a story getting a lot of attention. This England game taking on France but England apparently doing

it without their star forward. What can you tell us?

WIRE: Yes, Rahel. England star Raheem Sterling has left the World Cup in Qatar after learning that intruders broke into his family home just outside

of London. A person with knowledge of the situation has told CNN that the Chelsea forward is said to be shaken and concerned about the well-being of

his children after the break in and that armed intruders broke into the family home while members of the family were there.

But in its statement, Surrey police said that at this time no witnesses have corroborated the fact that there were armed intruders or that there

was anyone in the home. The police tell CNN that they visited the property Saturday night after occupants returned home from an international trip to

find that watches and other jewelry items had been stolen. Police say they returned Monday morning to follow up and to continue to piece together

these details.

Now, Rahel, there is a chance that Sterling could return to Qatar but for now it's clear that he feels that he needs to be with his family at home to

prepare -- as his team prepares to face France in the World Cup quarterfinals on Saturday. Gareth Southgate manager of the team said that

while it's very important for the team to be in the World Cup right now, that pales in comparison to the importance of Sterling being with his

family if he needs to be.

SOLOMON: Always good to keep your priorities in check even in the World Cup. Coy Wire, good to have you.

WIRE: Thanks.

SOLOMON: Now for a tale of two volcanoes both actively erupting in different parts of the world. Mount Semeru in Indonesia's East Java where

people are being evacuated. The other is over 10,000 kilometers away in Hawaii, which is where our story begins. Molten lava spewing from Mauna Loa

is inching toward a major highway. And CNN David Culver has the view from above.

(BEGIN VIDEOTAPE)

DAVID CULVER, CNN CORRESPONDENT (voice over): We are on the road before sunrise. Quickly realizing we can already spot our destination some 30

miles out. There you see it that red orange glow Mauna Loa erupting.

To give you a better view though, we go up in the morning dark. Paradise helicopters Darren Hamilton, our pilot and guide giving us rare access.

I assume we'll know when we see the volcano?

DARREN HAMILTON, CHIEF FINANCIAL OFFICER, PARADISE HELICOPTERS: Yes. It's just off kind of the eastern side there. At about the 1:00 position that is

the plume there.

CULVER: Having Flown in military hot zones, Darren even admits this is firepower like no other.

CULVER (on camera): What was it like the first time you flew over lava?

HAMILTON: Oh, it was a blast.

CULVER (voice over): It can also be challenging, especially with heavy vog or volcano smog.

CULVER (on camera): So, there you can see the gasses from Fissure 3.

[15:35:05]

CULVER (voice over): Those acidic gases dangerous if the concentration levels are too high. On the ground officials closely watching the lavas

potential impact on saddle road, the main highway that connects the east and west of the island, erupting last Sunday for the first time in 38

years. Mauna Loa, the world's largest active volcano is one of five that make up Hawaii's Big Island. And it's not the only one currently erupting.

Neighboring Kilauea also active, though no longer shooting lava to the surface like it did in 2018.

DOROTHY THRALL, LIVES NEAR VOLCANO: We're in Kapili (ph) Street which is where my house was at and it's -- that way on the opposite side of the

subdivision.

CULVER: Dorothy Thrall invited us to where her home now sits buried under 60 feet of lava. You can see a metal streetlight fused into the rock. Four

years after Kilauea did this to her Leilani Estates community. She still walks it as though she's on her old street with her old neighbors.

CULVER (on camera): When you have something like this, I assume you're all dispersed after that.

THRALL: Yes, we lost that sense of community and it's what we lost. In addition to the homes.

CULVER (voice over): Mauna Loa's eruption and emotional trigger for Dorothy and others. Foreseeing the trauma from Kilauea back to the surface. The

2018 lava flow wiped out more than 600 homes here. Some untouched but left lava locked. An island within the island. Dorothy showed us this video she

captured a few weeks back. Trekking over lava rock helping friends gather the last of their belongings from their home. The reminders of devastation

here are dhimmis

THRALL: This was a home. They evacuated the second night, and I believe it went under the third night.

CULVER (on camera): And just took their home.

THRALL: Just took their home.

CULVER: Four years later it's still standing.

THRALL: Still steaming. Yes.

CULVER: And how long will stay like that?

THRALL: Probably 30 to 40 years.

CULVER: How is it that you can still see beauty after so much loss?

THRALL: Because lava is beautiful. OK? It's a curtain. It's Kilauea's creation. That's how the island was formed. That's how the island was

built.

CULVER (voice over): And appreciation shared by native Hawaiians leaving offerings on Mauna Loa. And thousands of tourists and locals arriving past

sunset just to witness the lava glow.

Nighttime traffic backs up for miles to avoid the congestion. Let's get back to the skies.

HAMILTON: That's two to 300,000 degrees Fahrenheit, or about 1000 Celsius. That's molten rock flowing like water.

CULVER: Which has already crossed one volcano road, power lines in all. A searing slice right through it.

CULVER (on camera): It's incredible the heat you feel as soon as you get close to it. And look at this. The rushing flow. The river. You see the

current of lava.

CULVER (voice over): Darren estimates It's moving 30 to 40 miles per hour.

CULVER (on camera): But this, the source of it all. I mean, there's nothing like this. Just spewing from the top.

(END VIDEOTAPE)

SOLOMON: Well, CNN's David Culver reporting there.

And now to Indonesia where a volcanic eruption has forced nearly 2000 people to abandon their homes and seek shelter and village halls in

schools. CNN's Allison Chinchar reports.

(BEGIN VIDEOTAPE)

ALLISON CHINCHAR, CNN METEOROLOGIST: Ash fills the skies in Indonesia, forming a thick caustic cloud over Mount Semeru on the island of Java.

Video from the country's Ministry of Environment and Forestry captured the explosive eruption on Saturday. A burst of ash shooting 15 kilometers into

the sky.

A sign for people living in the volcano shadow it's time to go.

This man escaping on a motorbike. The ash peeking on his face. He says he doesn't know where he's going just somewhere out of the volcanoes reach.

Authorities say nearly 2000 people have been evacuated from the slopes of the volcano which is located about 800 kilometers south east of Jakarta.

The roads in the area packed with vehicles rushing to outrun the volcanic ash that is still raining down. Emergency workers are directing people out

of the danger zone. Handing out masks and urging them to go to shelters.

INDAH AMPERAWATI MASDAR, LUMAJANG DISTRICT DEPUTY CHIEF (through translator): We have readied some nearby schools and village halls, we will

prepare them until the observatory post declares it's safe.

CHINCHAR: The damage already done to some areas. Rooftops are singed and the ground is covered with smoldering soot. Authorities are telling people

to stay at least eight kilometers away from the eruption center. But there are fears the hot ash could drift further.

So far, many people are heeding the warnings. A lesson learned last year when more than 50 people were killed in a previous eruption and thousands

were forced from their homes. Allison Chinchar, CNN.

[15:40:03]

SOLOMON: And that is QUEST MEANS BUSINESS. I will be back at the top of the hour as we make a dash for the closing bell. Up next, Connecting Africa.

(COMMERCIAL BREAK)

[15:58:39]

SOLOMON: Welcome back. I'm Rahel Solomon. And it is the dash to the closing bell and we are just two minutes away. Stocks are lower amid news signs of

growth in the U.S. service sector. Investors fear that it could mean more tightening from the Fed. You fear that it could mean more tightening from

the Fed. You can see the Dow is down about 460 points. It opened lower and only fell more throughout the session.

And the loses are even steeper on the S&P and the tech-heavy NASDAQ, you can see the NASDAQ is off about 1.9 percent.

The E.U. and its allies meantime, western allies just put a price cap on Russian oil. Columbia University's Tatiana Mitrova says that the move will

not start Putin's war effort, at least not right away.

(BEGIN VIDEO CLIP)

TATIANA MITROVA, CENTRAL OF GLOBAL ENERGY POLICY, COLUMBIA UNIVERSITY: I would say Russian economy anyway would not collapse in half a year due to

the lack of oil revenues. It is still quite resilient and financial resources accumulated in the national welfare fund during the previous

years on definitely sufficient to cover the budget deficit at least for one year or so.

(END VIDEO CLIP)

SOLOMON: And looking now at a couple of notable socks. Tesla shares are slipping now down about seven percent. We'll get that up for you. Bloomberg

meantime says that the E.B. maker is cutting production at its Shanghai plant. Tesla shares are now down more than 50 percent since January.

Taking to the skies now, United is up more than two percent. It shares got a nice upgrade from Morgan Stanley.

[16:00:02]

And taking a look at the triple stack again, you can see all of the major averages are solidly lower on the day.

And that is your dash to the bell. I'm Rahel Solomon. The closing bell is ringing on Wall Street. "THE LEAD" with Jake Tapper starts right now.

END