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This is a rush transcript of "Your World with Neil Cavuto" on March 4, 2022. This copy may not be in its final form and may be updated.

NEIL CAVUTO, FOX NEWS ANCHOR: Last night, the Russians attacked it. Today, they own everything around it.

That nuclear attack that they say wasn't a purposeful attack on that facility, and it's done no harm, has now excited worldwide alarm. The secretary of state saying it is an inexcusable potential nuclear catastrophe barely averted.

Europe feels the same way. Britain leading a charge to have the U.N. look into all of this, all of this on the same day we realize that NATO has gone ahead and done what pretty much everyone thought it would do, but Ukrainians hoped it would never do, rule out a no-fly zone over Ukraine.

Welcome, everybody. I'm Neil Cavuto.

And this is "Your World," and what a world today, as the Russian assault on Ukraine widens and gets more targeted, creeping toward Kyiv, this at the same time, we're learning that the European Union is looking at additional sanctions, and controversy brewing in Washington on getting the president on board with making sure no Russian oil makes its way into this country.

He's even getting that pressure from fellow Democrats. We are on all of it with Benjamin Hall in Kyiv with the latest and how those there now are getting worried very, very worried. We have also got the British ambassador to the United States, Karen Pierce, back with us to assess what we can do and what the Western world is trying to do to avert the crisis from getting even worse than it is, and Jennifer Griffin at the Pentagon and, again, making official a no-fly zone is not coming to Ukraine.

We begin right now with Benjamin Hall in Kyiv -- Ben.

BENJAMIN HALL, FOX NEWS CORRESPONDENT: Yes, Neil, hi.

Look, you're absolutely right. There's no doubt that Putin's forces are making a push, a significant push around the country. We see it from the north, the south, the east, cities like Kharkiv, which have been bombed extensively, Mariupol now surrounded, that move towards Odessa, and still pushing towards Kyiv.

One of the big concerns still is that nuclear facility, not so much for the threat of a nuclear accident or for Putin to weaponize that, but for the power it gives him. This is a nuclear station that controls 25 percent of this country's energy. And it allows him to effectively turn off power to so many people right now in the dead of winter.

It gives him power and influence over this war, just another weapon in his arsenal. But his arsenal, of course, is multifaceted, and it is strong. And we have seen those attacks continue on urban areas, continue on civilians, a school being hit. A few schools have been hit, but another one which almost destroyed the whole thing.

Hospitals also have been hit. Yesterday, we heard about civilians; 33 died in Chernihiv in a strike. So there's no doubt there's an escalation going on at the moment. Russian tanks also now continuing to move into the Kyiv area. And we have seen that very much in the last couple of days.

We talked a lot about the convoy, the 40-mile-long convoy which was heading down. Was it stalled? Did it break down? Were there logistical problems? Well, it does seem as if it is waiting on the border of Kyiv waiting to come in. And here inside the city, there is that feeling that it might come and it might come soon.

It's certainly a lot more of an active night in the city itself. And I can tell you, if we just come back to the scene here, that it's been a night. Every sort of half-hour, we hear thuds of artillery. We have heard some gunfire not too far away from us. We have seen the occasional flash on the horizon, so certainly more action tonight than we have seen for the last few nights, some people saying that the cloud cover has lifted today.

We have had significant cloud cover over the last couple of days. People here in Kyiv, frankly, are afraid. They're afraid of when Russia might come in, but they're defiant too. They're going to fight back. You walk around the streets here and they are empty.

This is usually a bustling city of three million. But there are no one -- there's no one out today. The barriers are up, the sandbags are up, the tank traps are up on every corner. The only people you see now are soldiers bracing, bracing for what might come next. But the feeling is that Vladimir Putin might start softening up this city before a ground invasion.

And perhaps that's what we're starting to see tonight with those artillery thuds and the flashes that we see -- Neil.

CAVUTO: All right, Benjamin Hall, thank you very, very much.

Benjamin in Kyiv, Ukraine.

Right now to British Ambassador to the United States Karen Pierce, back with us.

Ambassador, very good to see you again. Obviously, things are getting, to say dicier there is an understatement. But, effectively, NATO made clear today that they are not opting for a no-fly zone, as many Ukrainians had hoped.

Ukrainians are saying, while they understand that, many of them fear that it could be a mistake, and that it's only going to encourage dangerous behavior by Vladimir Putin and a green light for that, that will ultimately threaten other NATO countries, NATO countries down the road, and that it's a longer-term mistake. What do you think of that?

KAREN PIERCE, BRITISH AMBASSADOR TO THE UNITED STATES: I can understand how the Ukrainians feeling.

It must be absolutely desperate, Neil. But establishing a no-fly zone isn't possible. Unfortunately, the Russians have air superiority. And all our experience tells us that you can't impose no-fly zones against an adversary with air superiority in the region.

And, moreover, that would bring NATO into direct confrontation with Russian military forces. And NATO has been very ready to stress to the Russians that NATO is not a threat to Russia. We will, however, defend our territory. That goes to your second point. We have moved NATO reinforcements, including British reinforcements, American reinforcements, into NATO's southern and eastern flank.

And we are ready to defend NATO territory. NATO is not a threat to Russia, however. Very disturbing to see the attack on the nuclear power station from Russia. It looks like Russia just wants to find new ways to violate international law.

CAVUTO: You know, the Russians have come back to say that this was not a deliberate attack on a nuclear target. What did you make of that?

PIERCE: Well, I'm tempted to say they would say that, wouldn't they?

Because they have had universal condemnation from around the world, including from the U.N. Security Council that your reporter alluded to just now, including from the International Atomic Energy authority.

But in one way, I don't know whether it's worse that they meant to hit the power station or whether that they hit it accidentally, in other words, they don't have their data under control, they don't have their targeting under control.

But, fundamentally, the problem is that Russia has invaded Ukraine, and it needs to turn its tanks around and go home.

CAVUTO: Now, under the leadership of Boris Johnson, of course, the prime minister of Britain, the U.N.'s top human rights body is looking into this one, wants to even separately establish a commission to look into human rights abuses. And joining this attack on this nuclear facility adds yet another piece of evidence of that.

Where is this going? I mean, when you look at human rights abuses and all of this, in the middle of an ongoing attack, Vladimir Putin must just shrug his shoulders. What do you think?

PIERCE: I think if Putin behaved in an ordinary way, we'd never be in this situation. So I take your point.

But as an expression of global condemnation, what the Human Rights Council is doing is very helpful. And it does mean that evidence will be collected, and one day it will be given to a judicial tribunal. And that tribunal will hold individuals responsible for the attacks on civilians in Ukraine, for the attack on the power station, which is against the Geneva Convention, fundamentally the laws of war.

And the significance of that is that Russian generals on the ground now in Ukraine are individually accountable for what awful acts, atrocities are being committed on the ground. And in addition to the Human Rights Council, the International Criminal Court has decided to open an investigation into alleged war crimes in Ukraine.

That's something we were closely involved in with 37 other partners. That went through yesterday, so, again, a sign of international condemnation and outrage and horror, but also steps that will eventually lead to individual responsibility and accountability, not just for President Putin, but for his generals.

CAVUTO: Would these sanctions that are in effect and the punishments that Britain and the European Union have put on Vladimir Putin, do you expect them to stay in effect, no matter how Ukraine works out, and we hope well - - it looks obviously unpredictable for the moment -- but that these measures you have taken against Putin and Russia stay if he stays, if he doesn't go away?

PIERCE: They're not particularly -- the sanctions are not expressly linked to President Putin personally, except for the sanctions that are on him and Foreign Minister Lavrov, of course.

Fundamentally, the sanctions are about degrading his ability to spend money to wage this war. So they will stay as long as the war is being waged.

CAVUTO: But it hasn't degraded his ability, right? Does that worry you?

And I know, to be fair, not all of these have kicked in. But there does seem to have been some strategy ahead of this for him to plan for this, build up enough sovereign funds or hide them away or get them out of the reach of bankers. We don't know. But it has not deterred him. And now we're learning that the Russians are unaware of what's going on.

They can feel it at banks and waiting on long lines and all of that and having limited access to their money, but, beyond that, we're told overwhelming number of Russian citizens see this as a Western cabal against their country.

What you think of that?

PIERCE: Well, I think, obviously, deterrence didn't work, but it was right to try.

When we saw that deterrence hadn't worked, the G7 countries in particular, U.S., U.K., Europe, Japan, Canada, we put a sweeping sanctions on the Russian economy. I think it is degrading his ability to wage the war. We have seen that by the slowness and the difficulties and the obstacles the Russian military are actually encountering in Ukraine, alongside, of course, that heroic resistance of the Ukrainian people.

As far as the Russian people go, we have always known that President Putin would cut off sources of information to them. One of the tasks I think that lies ahead is, how do we get that information into Russia?

But I think, if you look at some of the Russian families who've already lost sons and daughters to the fighting, I think they well understand exactly what it is that President Putin has sent their children to, and they don't like it. And it is our job to try and bring that home to the majority of the Russian people.

CAVUTO: Ambassador, one positive development in all of this was Russia and Ukraine agreeing on a humanitarian sort of a carve-out here to allow for supplies and exit routes for those in Ukraine.

And Russia signed onto that, and we checked communications with the Russians and ourselves and everyone else and Ukrainians, and they say they're going to honor it. What if they don't?

PIERCE: I think we go back to President Reagan, to be honest, Neil, trust, but verify.

We need to monitor what's happening. We need to make sure that the Russians stick to it. We need to be ready.

(CROSSTALK)

CAVUTO: But what if they don't? What if you can't verify it? What if you can't verify it? Then what? What are the options for you and then for the European community, for NATO?

PIERCE: Well, I think the proof will be in whether or not Ukrainians can get out safely.

So I think we will see how those corridors are working. We will have the Ukrainians themselves give us information. We need to be ready to call it out. And we need to continue building up our sanctions, as indeed the G7 and others are doing.

CAVUTO: Ambassador Karen Pierce, thank you very, very much. Good seeing you.

PIERCE: Thank you. Nice to see you.

CAVUTO: All right, Karen Pierce, the British ambassador to the United States.

To Jennifer Griffin at the Pentagon.

Jennifer, I want to pick up on that. I know there has been this agreement between the countries, that is, Ukraine and Russia, to have this humanitarian carve-out here to protect those trying to leave the country, to get aid into the country. But what's to stop the Russians from saying, that's not aid, that's military supplies? Then what?

JENNIFER GRIFFIN, FOX NEWS NATIONAL SECURITY CORRESPONDENT: Well, Neil, we have just -- we haven't seen any evidence that the Russians have begun to establish any of those humanitarian corridors.

Remember, those negotiations with the Ukrainian leaders who went up to Belarus to meet with them for two -- they have been there two times. There are three sets of meetings that are supposed to take place.

They were being done under duress, and the best that they could get were some words, empty words, from the Russians about setting up humanitarian corridors. We have seen no evidence of it yet. And, again, I think, as Ambassador Pierce said, it's going to be back to trust, but verify.

The problem is, NATO is not going to set up those humanitarian corridors. They're not going to set up a no-fly zone. Officials have explained to us that that would put them in direct conflict with the Russians, unless, of course, the Russian to ask NATO to come in to do that. But I doubt that it's going to happen -- Neil.

CAVUTO: So taking a look at what's happening, and how the Pentagon sees it -- and we understand you and I have talked about this for quite some time here about Ukrainians' hope against hope that maybe a no-fly zone could be established over Ukraine.

NATO making it official, echoing what we thought and what you have reported, it's not happening.

But I do want to -- and I did speak to John Kirby yesterday. I was made aware -- and you know this far better than I -- that that doesn't mean we're not flying around the country and checking things going on there.

And I was trying to get how close we get to Ukraine when we do that. But I imagine the skies immediately around Ukraine are busy. I'm just wondering what you're hearing on that front.

GRIFFIN: Well, Neil, it's really important to distinguish what is happening outside of Ukraine on the periphery of those flights that you're referring to, are not confirmed by the Pentagon, but there have been reports that some of those E-6 surveillance flights, they can listen into and they get some visibility into Ukraine.

But, again, those are outside of Ukrainian airspace. NATO and the U.S. stopped flying in Ukrainian airspace the second that the Russians began the war and began their invasion, because there was so much flying in the air and there is contested airspace. The Ukrainians still have parts of their air force still intact. That's kind of miraculous at this point in time.

CAVUTO: Yes.

GRIFFIN: But the NATO forces are not flying inside -- even surveillance flights inside Ukraine.

What's interesting, Neil -- and we have been reporting on this -- is that deconfliction hot line that was established on March 1. We got more details about that today. And that deconfliction line was set up at European Command headquarters in Stuttgart under the command of the supreme allied commander, General Tod Wolters. It's staffed by a lower staffer, but it goes directly to the Russian Ministry of Defense.

But what is alarming is that we have no confirmation that that hot line was used last night at that moment of crisis when the fire broke out and the gunfire and attack on that nuclear facility. We don't have any indications that the hot line was used. And if any time there was a moment where a hot line could be used.

We also learned at the press briefing today that General Mark Milley and the defense secretary, Lloyd Austin, have not spoken to their counterparts since this has started. So the lack of communication and ability to deconflict between Russia and NATO is still quite significant, despite that telephone hot line having been set up.

CAVUTO: To raise a point -- and I'm sorry to belabor all these other side issues here, but that attack on the reactor, and whether the Russians accidentally or deliberately were strategizing that, it came within 1,500 feet from the reactor.

That's as close as you can get.

GRIFFIN: Neil, you can't -- you can't really overstate how serious that was last night.

And you heard the U.S. ambassador to the United Nations say that a disaster was narrowly averted. But Russian troops are now in control of the largest nuclear power plant in Europe. And it is not clear that they have experts there that know how to run that facility. They likely have kept some of the Ukrainian experts there keeping it online.

But will this become a weapon in Russia's attempt to pressure the Ukrainians, to pressure Europe? It is still very, very dangerous. And there are 15 other nuclear facilities like that in Ukraine, and including Chernobyl, which Russia has control of right now.

CAVUTO: It's a hell of a way to pressure people, right, Jennifer?

Thank you very much, Jennifer.

Jennifer Griffin at the Pentagon here.

Before we take a break, I do want to tell you, you're not imagining it. Prices are going up. And you're not imagining it. It isn't just a recent Ukraine phenomenon. I normally don't like to bore you with too many, many charts. Sometimes, I do that on FOX business.

But this is an interesting commodities chart. It charts everything, from wheat, and soybeans, barley, corn, and all that other stuff, to lumber and, of course, oil. It is now at the highest point it's been since 1970, when Richard Nixon was president.

And you talk about oil prices running up. Take a look at what's gone on with wheat and corn and soybeans. And that is in this short period the run- up that will not stop. Take a look what happened to oil today, up better than eight bucks, this week alone, this week alone, up 26 percent.

Since before the crisis, it has effectively doubled. No wonder all the major market averages were down. In case you're counting, that's the fourth straight down week for stocks, and all because we don't know where this is going. We just know where prices are going. And they're going up and up and up.

More after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OLENA GNES, RESIDENT OF UKRAINE: I'm asking. I'm asking for military intervention. Russia violated all our legal system, all international laws, all possible international laws.

Don't -- don't, please, allow the genocide to happen here. They just want to take us by force and control.

Don't -- don't -- please, prevent the new genocide of Ukrainians here.

(END VIDEO CLIP)

CAVUTO: All right, last week, when we were talking Olena Gnes, holed up in her basement with her three beautiful children, hoping against hope that maybe Western powers would provide some military help to deal with the person she called the monster barreling down on us, it did not, we could not, that it was too dangerous.

That help is not coming. We are not touching the air zone over Ukraine. We will get her reaction to that tomorrow, Saturday. And we will get a gauge of where all of this is going and what she feels she has to do right now, as her husband fights the good fight that so many have and continue to in Ukraine.

In the meantime, someone else who is sharing that resolve to deal with the Russians even against enormous odds, and even if it could kill him, right now is Mychailo Wynnyckyj. He is a professor in Ukraine and holdout right now in his basement, but ready for the unthinkable.

Mychailo, thank you very much for joining us.

I guess you're not surprised that, when it comes to addressing specifically the no-fly zone, that didn't happen, and was expected to happen, but now what?

MYCHAILO WYNNYCKYJ, UKRAINIAN RESIDENT: Well, look, I think that, obviously, people in Ukraine are very disappointed, extremely disappointed.

We were hoping for some help. At the same time, one of the things that we need to realize is that we're doing very, very well on the ground. We're stopping the advances from the north. We're stopping the advances from the northeast. We're stopping the advances in the east. Nobody was expecting the Ukrainian forces to be doing this well.

We're having some problems in the south, one of which is the report that you had on the power plant. About the power plant, by the way, it's in a place called Enerhodar, which is a tiny little town that basically is a one-horse town. It does nothing else except serve the nuclear power plant.

Before the Russians came in, civilians walked out in the streets and greeted them and said: We want nothing to do with you. And if you walk in, we will resist. That was the reason that they bombed the place, because they were expecting to just walk in and occupy. They haven't been able to do that. And they're not going to be able to do that.

This country could be overrun, but it will never be occupied. There is no possibility of this country ever being occupied. In order to occupy, you have to have a population that will actually listen to what you have to say, listen to your orders. The Russians are invaders. They will never be listened to.

So, today's no-fly zone refusal basically means that we're on our own. We're fighting. But it also means that Putin is going to escalate. And you, Americans, I'm sorry, but you're not going to be able to avoid this fight, because the next point after he sees that he can't occupy the place, he is going to escalate further

He's going to do an attack on NATO, He's going to do an attack either on the Baltics, or on Romania, or on Bulgaria or somewhere else. It's not something -- all you have done is postponed the fight, and probably made it nuclear. That's reality.

This place is not giving up. And we're certainly not giving up because NATO has refused to give us air cover. We will handle it.

CAVUTO: Mychailo, when Russian troops come in and take over a city or part of a region, I know you're in your basement, and you're -- but you do talk to two patriots like yourself.

What do the Russian soldiers do? How does that change things there? You say that they can try to take over a city or a region, but occupying it, that's a tough one. But, nevertheless, they do kind of control things.

Do you know what they're doing once that happens?

WYNNYCKYJ: They don't. That's the idea.

Neil, what I'm trying to tell you is they don't control things. They walk in, and they start looting. The reality is that the Russian troops that are on the ground in Ukraine today have rations for three days. It's now day eight. They're hungry. They're stealing.

They're going in and they're going into warehouses. They're going into private homes. We have got issues of -- we have got reports of Russian troops walking in and raping women, stealing everything that they have got in houses, et cetera. That's the kind of -- basically, I mean, we're talking about human rights violations left, right, and center.

That's the reason that the women and children are being evacuated out. And that's why men are staying in this country, because we have to defend our homes. We have to make sure that, when they walk in, they're going to be met with Molotov cocktails, they're going to be met with shotgun fire, they're going to be met with all kinds of things that they're not expecting.

When -- your question was, what happens when they walk into a city? Well, the reality is that they have been only able to take one city in the last eight days with almost 200,000 troops descending on this country.

(CROSSTALK)

CAVUTO: But, to your point, they do horrific things, Mychailo, when they do get in there, whether that's control. I understand what you're saying.

WYNNYCKYJ: Yes.

CAVUTO: But they do horrific things once they do, right?

WYNNYCKYJ: Yes, they do, do horrific things once they do get in.

But that's not how you control the population. You can't control 40 million people by fear, not when you have got only 200,000 troops. Yes, if they had a million, if they could move a million into this country, and they would destroy all our cities, then possibly they'd be able to control us.

But, quite frankly, they don't have enough troops. They don't have enough capacity to do it. They have been able to take one city in the south, Kherson. That's it. They haven't been able to take Mariupol. They haven't been able to take Kharkiv. They're certainly not taking Kyiv.

This is supposedly the second largest army in the world, and supposedly the most powerful army in Europe? They're being stopped by a bunch of ragtag people like me, 51-year-olds throwing Molotov cocktails at them.

That's what they're -- that's what they're not expecting. And that's what they're going to get.

CAVUTO: Mychailo, you have an amazing heart. That's putting an understatement as to all your fellow Ukrainians putting up an incredible fight, maybe because you have that big heart.

Please be safe, be well, Mychailo. Thank you very much.

WYNNYCKYJ: Thanks for having me.

CAVUTO: All right.

In the meantime, just a backdrop for all of this, looking at how we're going to make up for the run-up in oil prices, and keep the world stable, at least. We were expecting a little help from OPEC here. We got a resounding, well, kind of go to hell here.

What Senator John Barrasso thinks of that -- after this.

(COMMERCIAL BREAK)

CAVUTO: You ever wonder how it is that the Russian people don't know what's going on in Ukraine, or a good many of them?

Maybe moves like this by Russia today to block access to Twitter and Facebook to make absolutely sure they never do -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, pressure really on the White House right now to do more than just open up Strategic Petroleum Reserve and try to get more oil out to the market, because it doesn't seem to be working as far as prices, though. They still get higher.

Jacqui Heinrich at the White House with more -- Jacqui.

JACQUI HEINRICH, FOX NEWS CORRESPONDENT: Hey, Neil. Good afternoon to you.

The White House is under pressure from both the left and the right to ban Russian energy imports. And so they are now considering options to cut U.S. consumption of Russian energy, while maintaining supply and market stability, they say. So the translation there is getting more from somewhere else.

However, the White House says there are both international and domestic options. But we have not been told that they're tapping any domestic producers to ramp up production. And that's even as the White House announces a new buy-American rule to bring down costs of goods and also resilience -- or reliance on foreign supply chains.

They're requiring any good purchased with taxpayer money to be at least 75 percent made in the U.S. But, in the meantime, there are new calls from Ukraine to do more and set up humanitarian corridors to assist refugees fleeing that country.

Ukrainian President Volodymyr Zelensky already raised concerns that military aid did not come soon enough.

(BEGIN VIDEO CLIP)

HEINRICH: Zelensky said yesterday that he felt like the world, the whole world was too late. What's the president's response to that?

JEN PSAKI, WHITE HOUSE PRESS SECRETARY: We have been, the United States has, been working for months to build a global coalition that will hold President Putin accountable.

(END VIDEO CLIP)

HEINRICH: Zelensky's calls for a no-fly zone are currently being rejected over concerns that it would escalate the war and put the U.S. in direct confrontation with a nuclear power.

But the White House is not embracing the most drastic solution we have heard so far pitched by Senator Lindsey Graham last night.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC): The only way this ends, my friend, is for somebody in Russia to take this guy out. You would be doing your country a great service.

PSAKI: We are not advocating for killing the leader of a foreign country or regime change. That is not the policy of the United States.

(END VIDEO CLIP)

HEINRICH: Today, the president is meeting with the president of Finland, obviously, a lot of concerns -- or a lot of discussion, rather, about whether they would ask to become a non-NATO preferred country. That's a status the U.S. can issue unilaterally.

In the meantime, we are awaiting details about the vice president's trip. We are hearing she's going to Poland and Romania next week. So we're awaiting details on who she's going to be meeting with and what she hopes to accomplish there, Neil.

CAVUTO: Jacqui Heinrich, thank you very, very much.

Well, this was the week that we thought also we would get a little help from OPEC, had its regular meeting here, and we thought they'd really dramatically beef up production to try to counter what has been this inexorable run-up in prices.

Fact of the matter is, they really didn't. They lifted it, as they thought they would lift it, before Ukraine and all the war started, by about 40,000 barrels a day, not much. And when there was some criticism about that, the Saudi crown prince had said that he really doesn't care what President Biden misunderstands.

How's that for -- what is the foreign term for a middle finger?

Let's ask Senator John Barrasso, the Senate GOP Conference chair.

Well, that's a fine thank you, Senator, I mean, that they could have done something that sort of ease and counter this. They did not. In fact, they bragged about it. What did you make of that?

SEN. JOHN BARRASSO (R-WY): The answer to Russian oil, the answer to foreign oil is more American oil.

We have it here, and Joe Biden will not allow us to get it out of the ground. Joe Biden needs to stand up to people like John Kerry, who push him around and the global elitists. And we need a long-term commitment to American oil and gas.

Neil, I was at the Wyoming legislature today talking energy with our legislators. We have enough oil and gas in the ground here in America to provide for all of our own needs, as well as to help our allies. But the Biden administration policy from day number one, killing the Keystone XL pipeline, blocking oil and gas exploration, has led to record high prices at the pump for Americans and has funded Vladimir Putin's war machine.

This is wrong.

CAVUTO: Well, as you know, the White House responded to say, if the oil companies were so hot to take advantage of this and do something about it, they would certainly be acting on the 9,000 leases and agreements and contracts they have. But they're not. They're not pursuing production with those.

So that's how they say it, that increased production here isn't the answer. Taking advantage of the contracts you already have is. What do you say?

BARRASSO: We need to produce more energy here in America. We can't be beholden to foreign powers around the world.

We have it, and Joe Biden stopped it on day number one of his administration.

CAVUTO: No, no, I understand that. You make a very good -- you make a very good point, Senator.

What they're saying is that there are these other options out there that companies are not pursuing that would dwarf whatever you get out of Keystone.

What did you -- what do you think of that?

BARRASSO: Well, Keystone, the decision there was a mistake. The amount we would be getting in from Keystone was more than we're getting in today from Russia.

The president ought to stop importing from Russia. Every time we bring in more or oil from Russia, we send dollars to Putin's war machine. This is absolutely wrong. These policies have been a jackpot for Putin. We're soon going to be paying over $4 a gallon for gasoline. And even though you have some Democrats who are saying, yes, let's stop importing Russian oil, Nancy Pelosi yesterday said, oh, we're not going back to the policies, no, of either President Trump or President Obama of exploring for energy on public lands.

This is national security suicide. We need to recommit. We need to replace foreign oil, Russian oil with American oil.

CAVUTO: So you don't believe the administration when it says these oil companies are sitting on these other options for production, and they're not?

BARRASSO: No, I don't believe the administration on this.

CAVUTO: OK.

BARRASSO: I live in Wyoming. We are an energy capital of the world. We have it all. We have oil, gas, coal, uranium for nuclear power.

We have renewable. We're having a hard time getting it out of the ground in terms of oil and gas.

CAVUTO: Right.

BARRASSO: And that's a direct effort by this Biden administration to shut down because of the fact that he is held captive by this leftist climate group who wants to keep energy prices high, who is against exploring for American energy.

CAVUTO: All right.

BARRASSO: And that's why we are beholden to people.

We are much better and stronger as a nation, and also freer, if we are selling American energy, Neil, to our friends than having to buy it from our enemies.

CAVUTO: OK, maybe, sometimes, we're just slightly talking past each other. Maybe that's my fault.

But, Senator, thank you very much, John Barrasso.

The view from the White House on all of this, Jared Bernstein, the White House Council of Economic Advisers, on a day we got a stunningly strong jobs report. That only makes oil go higher. That only makes inflation go higher, the catch-22 for the White House.

(COMMERCIAL BREAK)

CAVUTO: An incredible jobs report, 678,000 more of them, far, far more than most thought we'd see, the unemployment rate down to 3.8 percent.

Jared Bernstein joins us right now with the White House Council of Economic Advisers.

Jared Bernstein, very good to see you. It was a stunningly strong report.

You're seeing Mike Tobin there. There he is, Jared Bernstein.

A very strong report, but you know the immediate reaction was, uh-oh, it's only going to remind folks that the economy is strong, inflation's a problem, the Federal Reserve is going to have to raise rates more. We saw it reflected in higher oil prices today as well, wiping out all of that good news.

How do you react to that?

JARED BERNSTEIN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: Well, I wouldn't come anywhere close to wiping out good news.

I mean, it's not just one month, of course. There's a very solid and long ongoing trend, such that, since this president got here, we have seen a creation of 7.4 million jobs. That's an historical record.

And, look, I take your points, Neil. But, on the other hand, I think it's a real mistake to try to reduce these economic dynamics, the state of this economy, down to one variable, inflation.

It is a real challenge for household budgets. And we have a robust plan for going at it. But imagine if that was occurring without the backdrop of 3.8 percent unemployment, historically strong job growth, strong wage growth, a strong household balance sheet, all tied to policies of the president.

CAVUTO: But, Jared, the problem with that good news is, you talk about strong wage growth. And you're right. It's running at a better-than-5- percent clip.

Unfortunately, inflation's running about 2 percent more ahead of that. So, whatever Americans are making, they're losing. And that's why they're so ticked off in all these surveys. They don't see this as great news. They see the improvement in the economy. You're quite right. But they also see those higher prices at the store. And they're ticked off.

BERNSTEIN: So, let me push back at least at least at one of those points.

If you actually ask Americans to drill down on job availability, they will tell you that they're seeing a lot of help wanted signs. So I think -- I think we have to recognize that.

It's also the case that, if you talk about warehousing, trucking, leisure and hospitality, restaurants -- I looked at the data this morning. Particularly for middle- and low-wage workers, their hourly wages are beating inflation.

But my message here is that we hear you. We hear what the households are telling us in terms of the challenge of this highly elevated...

CAVUTO: But what are you doing about it, right, Jared?

BERNSTEIN: Exactly.

CAVUTO: There's no doubt you hear, and you -- but what are you specifically doing?

BERNSTEIN: That's the right question. That's exactly the right question.

We're trying to make sure that we do everything we can to bolster the economy supply side, getting goods from ship to shelf as quickly as possible, increasing the throughput at the ports, making sure there's ample competition between industries, which puts downward pressure on the level of prices in meatpacking, in shipping, probably in household materials as well.

Over the longer term, trying to help Americans deal with budget crunch costs, like child care, elder care, prescription drugs, and health insurance,. those are all parts of the president's agenda, along with deep investments in semiconductor chips, domestic production therein.

CAVUTO: But that's a lot of spending. And you're a good student of economic history.

Generally, a lot of spending doesn't ease inflation. It actually makes it worse. Are you worried, for whatever efforts you're taking, that you're not getting the results? These are not overnight type of missions. I get that.

BERNSTEIN: Right.

CAVUTO: But that this is dragging on? Now you have got Ukraine, and it's made the whole situation worse. This could be spiraling out of control.

Do you think it is?

BERNSTEIN: No, I don't think it is.

And I think, if you look at virtually every forecast I have seen, you will see inflation coming down pretty significantly by the end of this year. But those are all forecasts. And we can't...

CAVUTO: Every one of those forecasts, Jared, have been wrong.

BERNSTEIN: Could be wrong.

CAVUTO: They're like my commitments to lose weight. They never materialize.

BERNSTEIN: Yes.

CAVUTO: Are you worried?

BERNSTEIN: That is a fair analogy, though with no judgment.

CAVUTO: Yes, I understand.

BERNSTEIN: But you're absolutely -- look, forecasts can be wrong, which is why we are not sitting on our hands. We're engaged in the efforts I told you.

Now, look, I want to -- I want to push back on this idea of spending. First of all, particularly when we're talking about our investments in child care, elder care, the bipartisan infrastructure law, all of those are geared to increase the economy's productive capacity.

You really -- and I know you know this. You really have to look at is the spending juicing the demand side, or is it helping to expand supply-side capacity?

Suppose you stand up an accessible, affordable child care sector. Is that inflationary, or does that let more people come into the labor force, easing inflationary pressures? I would argue strongly that it's more the latter than the former.

CAVUTO: You have got a record number of people in the labor force and darn near record low unemployment. Maybe that's already been done.

BERNSTEIN: Well, look, the labor force is growing a lot more quickly than people think. But we're still below where we'd like to be, especially given such strong labor market demand.

CAVUTO: Got it.

Jared Bernstein, very nice of you to stop by, the White House Council of Economic Advisers, examining all of this.

We, in the meanwhile, we have got the latest what's going on in Ukraine that has propelled a lot of this activity that Jared and I were just talking about.

Stay with us.

(COMMERCIAL BREAK)

CAVUTO: Huge crowds in the Czech Republic just to get the opportunity to show their support for Ukrainian President Zelensky, who spoke to them via remote, as he did a number of other countries.

But to say that he has become an international rock star and a beacon of hope for the Western world, particularly in Europe, would probably be an understatement.

And doesn't my next guest know it, Ambassador Michael Carpenter, the U.S. ambassador to the Organization for Security and Co-operation.

Ambassador, very good to have you.

MICHAEL CARPENTER, U.S. AMBASSADOR TO THE ORGANIZATION FOR SECURITY AND CO- OPERATION IN EUROPE: Thanks for having me.

CAVUTO: What did you think of this response? That was just the Czech Republic. I could play it out again and again, dating back to the early part of this week, with a standing ovation from the European Parliament.

They're all rooting for him. And there's great international support. But, today, with that no-fly zone decision out of NATO, perfectly understandable, is their hero in trouble?

CARPENTER: Yes, look, Neil, I have never seen here up so united, NATO so united in confronting this naked aggression.

I mean, that's the good news story here, is that some of our more skeptical European partners who in 2014 believed that there were actually local separatists or little green men that were rising out of the woodwork to make war in Ukraine, now they see very clearly what this is. It's Russia's naked aggression against Ukraine.

That's the good news. Obviously, it's difficult because Putin has decided to escalate, even in the face of immense sanctions that will bring ruin to his economy. And yet he continues to escalate this war.

CAVUTO: I know they're planning peace talks, a third one next week, but one that came out that the brief, but at least promising peace talk yesterday was this agreement on the part of Ukraine and Russia to provide sort of like a humanitarian safe zone to help Ukrainians get out of the country, or those who wish to, and for aid to come in.

But do you know Vladimir Putin will honor that?

CARPENTER: Well, that's exactly the point.

I mean, we have seen him make pledge after pledge. A couple of weeks just prior to the invasion, he was saying: We have absolutely no plans to invade Ukraine. It's hype, it's hysteria. The West is spreading misinformation.

Well, I'm sorry, how can one believe a single word that's coming from the Kremlin? Unfortunately, one cannot. I mean, this is a regime that is broken, all boundaries, all norms of international law. So, they say they're going to allow a humanitarian...

CAVUTO: So, if he doesn't honor this, Ambassador, if he doesn't honor it, to your point -- let's say he's not going to allow aid to come in, because he will say, well, it's military aid that's coming in, I won't allow it. The situation gets worse.

How do we respond to that?

CARPENTER: Well, as of today, there is humanitarian aid that is flowing in.

The problem is that it's not getting to all the population centers that need it, especially in the east in places like Kharkiv and Kherson. And so we're going to have to continue to work at that.

But the West is dedicated to providing Ukraine with the arms to defend itself, with weapons, with other forms of assistance. And humanitarian aid is being prepositioned and is actually flowing across the border.

But a no-fly zone, as you know...

CAVUTO: But it seems to be flowing -- sorry to jump on you again.

CARPENTER: Yes.

CAVUTO: But if you're getting that in, you're getting it into areas controlled by the Ukrainians -- you mentioned Kherson and some of these others that have now since fallen to the Russians. So can aid get to those regions?

CARPENTER: Well, it's going to be difficult.

And that's why we have got to try to get a humanitarian pause, so that the supplies can reach those affected areas. But I'm not sure that President Putin is interested in that. I mean, he continues to escalate, despite the fact that now Russia has struck so many civilian targets. He doesn't seem to care.

He just continues to go and go and go. And so we will continue to ratchet up the costs for this barbaric attack on Ukraine. And you're already seeing it.

I mean, the Russian, not just the stock market, but the Russian economy is going to take a huge hit in the coming days and weeks.

CAVUTO: It's taking a huge hit now.

Very quickly, are you worried that no financial sanctions will stop Putin, no matter what?

CARPENTER: I think he has catastrophically miscalculated.

And the thing that I don't know is, I don't know what sort of information is reaching him or how he's making the decisions that he's making.

CAVUTO: OK.

CARPENTER: At some point, reality is going to catch up, though, with the Kremlin.

CAVUTO: Yes, you would think.

Ambassador, thank you very, very much, Ambassador Michael Carpenter on that.

We will continue following this tomorrow with our live Saturday coverage at 10:00 a.m.

Here comes "The Five."

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