WASHINGTON (AP) —Exxon and Chevron don’t set the price of American oil, which has ricocheted between $68 and $115 a barrel, driven by supply and demand, and what traders, refiners and other buyers are willing to pay.
Democrats nevertheless hope to tax major oil producers for profits from 2026 onward and redistribute that revenue to consumers.
“It’s fair to put a windfall profits tax on inordinate windfall profits rather than cut off children’s food programs,” said Sen. Sheldon Whitehouse. His measure and a companion bill by Rep. Ro Khanna of California would impose a per-barrel tax on companies that produced or imported at least 300,000 barrels of oil per day in 2025.
The UK and other European countries have extended temporary windfall profits taxes on fossil fuel companies to 2030, according to Tax Foundation Europe.
Critics say the energy company windfalls are unjustified
“There are constituencies around the world who are having a very good crisis, and the oil producers are one of them,” said Patrick Galey, fossil fuels lead at Global Witness, a nonprofit organization that investigates environmental issues.
“When you compare that to the hundreds of millions of people who are struggling with rolling blackouts, with electricity curbs, rationing, waiting in line for food queues, or the disruption to fertilizers and the potential impact that that has on food prices, we don’t think that it’s a justifiable price for the rest of the world to be paying.”
Major oil companies reap massive profits as US and Iran fighting drives energy prices higher
American oil and gas giants are announcing huge spring windfalls thanks to the fighting between Iran and the U.S. that made consumers around the world pay more for fuel.
Exxon Mobil on Friday reported that its second quarter profits doubled to $14.53 billion, boosted by record diesel production. The oil giant, based in Spring, Texas, brought in $116.02 billion in revenue, up 42%. Chevron, based in Houston, nearly quadrupled its profits to $12.07 billion and revenue jumped 56% to $70.06 billion.
Six of Europe’s largest oil companies posted combined first-quarter profits of $22 billion, more than 40% higher than last year.