Big Oil’s War Windfall

Americans are paying more at the pump while oil companies profit from the chaos. Congress has a chance to stop the windfall.

Francis Chung/E&E News

Gas prices are now at the highest level of either of Donald Trump’s presidential terms. Crude oil has crossed $110 a barrel, and Americans are spending an estimated $200 million more every day on gasoline than they were just days before the Iran strikes began. If the conflict stretches into the summer driving season, analysts warn prices could reach $4.50 nationally and climb above $6.00 in states like California.

Meanwhile, oil and gas company revenues are rising. The executives who attended Trump’s Mar-a-Lago fundraising dinners, who donated millions to his inauguration, who cheered on his “energy dominance” agenda? They are openly cheering the opportunities this conflict has created.

This is the fossil fuel economy doing exactly what it does best. And if we don’t act now, the same thing that happened after Russia invaded Ukraine will happen again. Big Oil will pocket the windfall while working families absorb the cost.

➡️ Sign our petition demanding Congress pass a windfall profits tax on Big Oil now. ⬅️

actionnetwork.org/petitions/big-oil-rakes-in-profits-while-gas-prices-surge-tax-big-oil-billionaires/

Here’s who’s having a good week.

Michael Sabel is the CEO of Venture Global LNG. He attended Trump’s Mar-a-Lago fundraising dinner and donated $1 million to the inauguration. Within hours of the strikes on Iran, he was on an earnings call talking about how many available cargoes his company had ready to fill the supply gaps the war created. Cheniere Energy’s stock jumped 5.5% the day Iranian drones hit Qatar’s natural gas facilities. Their CEO was also at Mar-a-Lago, and also donated $250,000 to a Trump PAC.

Again, none of this means oil executives started the war. But it does mean that when conflict breaks out in an oil-rich region, the industry arrives with a prepared agenda. The companies that spent heavily to put Trump in office are now among the clearest financial beneficiaries of the war he launched. We think that is a fact worth sitting with.

We’ve been here before. Congress had a chance to act. It didn’t.

In 2022, when Russia invaded Ukraine, the fossil fuel industry had one of the best years in its history. ExxonMobil made $77.8 billion in profits, more than double what it made the year before. Oil prices spiked, inflation climbed, and ordinary people paid more for gas and groceries and heat while executives collected bonuses.

The response from Congress was to propose a windfall profits tax, a straightforward idea that works like this: when oil prices spike far above normal because of a war or a geopolitical shock, not because companies innovated or worked harder, the government taxes that excess and returns it to the people paying the price. Sen. Whitehouse and Rep. Ro Khanna introduced the Big Oil Windfall Profits Tax in March 2022 and dozens of Members co-sponsored it. Biden floated the idea from the Roosevelt Room and roughly 80 percent of Americans said that they supported the idea. And then it went nowhere.

Unsurprisingly, that inaction cost us. Researchers at the University of Massachusetts calculated that if Congress had taxed just the industry’s excess profits — what they made above their pre-war baseline — and returned that money to American households, every family could have received $1,715. Instead, about half of those record profits flowed to the wealthiest 1% of Americans. While Congress stalled, the UK’s Conservative government went ahead and enacted their own excess profits levy and used the revenue to help households with their energy bills. We couldn’t manage what the British Tories did.

Now we’re here again, with crude above $110. Is Congress going to make the same mistake twice?

Here’s what we’re asking for.

The math is the same as what was proposed in 2022. Large oil companies — those producing or importing hundreds of thousands of barrels per day (the ExxonMobils and Chevrons), leaving the vast majority of smaller domestic producers untouched — would owe a per-barrel tax equal to 50% of the gap between today’s price and last year’s average. At $100 per barrel, that could generate approximately $33 billion a year, returned directly to consumers. Real money, going back to the people being squeezed at the pump; the money that should have gone to them the first time around.

This is also about what we’re not building.

It’s worth noting what’s happening simultaneously on the other side of the ledger. While Trump’s war drives gas prices to record highs, his administration has blocked or canceled more than 22 gigawatts of wind and solar on public lands, enough to power 16.5 million homes. Republicans in Congress have added $3.5 billion in new annual subsidies to an industry already collecting $31 billion a year from taxpayers. The administration is working to shut down the climate lawsuits and state superfund laws that are the last meaningful check on what the fossil fuel industry can do without consequence.

Clean energy built at home can’t be blockaded or turned into a price spike by a conflict most Americans will never see. A windfall profits tax is the right response to this crisis, but building clean energy is how we stop having the same crisis over and over again, every few years, whenever the next flashpoint ignites in an oil-rich part of the world.

Take Action

Big Oil is already counting its profits from this crisis. Congress needs to hear from you. Sign our petition demanding a windfall profits tax on Big Oil now — and share it with everyone you know.

Photo: Kevin Wolf/AP Images