Big Oil Windfall Tax Would Return ‘Egregious’ Iran War Profits to Struggling US Families

With Big Oil poised to profit from a price spike driven by the US-Israeli war on Iran, congressional Democrats on Wednesday revived an excise tax that proponents say would put money back in the pockets of struggling American workers.

Sen. Sheldon Whitehouse (D-RI) and Rep. Ro Khanna (D-Calif.) reintroduced the Big Oil Windfall Profits Tax Act "to curb profiteering by oil companies and provide Americans relief at the gas pump."

The legislation—which only applies to large oil companies—would impose a per-barrel tax "equal to 50% of the difference between the current price per barrel of oil and the average price per barrel last year, when big oil companies were already earning large profits."

As Democrats on the Senate Committee on the Environment and Public Works explained: "Revenue raised from the windfall profits of Big Oil companies will be returned to consumers in the form of a quarterly rebate, which would phase out for single filers who earn more than $75,000 in annual income and joint filers who earn more than $150,000. At $100 per barrel of oil, the levy would raise approximately $33 billion per year. At that price, single filers would receive approximately $216 annually and joint filers would receive roughly $324 annually.”

The committee Democrats noted:

The price of a gallon of gas is up 80 cents just weeks after the onset of war in Iran, and the price of a barrel of oil has increased 50% from what it was at the start of the year. President [Donald] Trump’s war in Iran has further disrupted an already volatile global oil market by reducing supply and choking key shipping lanes. Qatar has warned that oil prices could surpass $150 per barrel in the coming weeks, far above 2022 highs seen following Russia’s invasion of Ukraine.

Trump—who promised gas under $2 a gallon and no new wars—said last week that "when oil prices go up, we make a lot of money."

As in Venezuela—another oil-rich country attacked by a president who has bombed 10 nations, more than any other US leader in history—Big Oil revenue is projected to surge due to the rising volatility and prices the war on Iran is bringing. The Financial Times reported Tuesday that US oil companies could reap $60 billion in additional revenue this year alone if crude prices remain high.

As one oil industry financial analyst told The New York Times earlier this week, “The oil and gas industry’s financial strategy has been ‘pray for war,’ because those are the conditions under which they make money."

Critics said that while fossil fuel interests—which spent close to half a billion dollars to get Trump and other Republicans elected in 2024—rake in profits, ordinary Americans suffer.

“American consumers are once again getting squeezed at the gas pump as President Trump’s war of choice in Iran sends gas prices soaring and money flowing to his Big Oil donors,” Whitehouse said Tuesday. “We should send any big windfall for Big Oil back to the hardworking people who paid for it at the gas pump."

"Over the longer term, accelerating our transition to clean energy will lower energy costs, insulate consumers from these kinds of price spikes, and reduce America’s dependence on foreign despots and greedy fossil fuel companies," he added.

Khanna said: “Trump’s war of choice in Iran is not just a moral mistake but an economic blunder that is skyrocketing gas prices for working Americans. I’m proud to reintroduce the Big Oil Windfall Profits Tax Act alongside Sen. Whitehouse to stop Big Oil from profiteering off of foreign wars at Americans’ expense and deliver real relief at the pump."

Green groups and economic justice advocates were among those applauding the reintroduction of the bill, which one 2022 nationwide poll found is supported by 80% of Americans.

“Let’s be crystal clear that when Trump said ‘when oil prices go up, we make a lot of money’, he was talking about billionaire Big Oil executives while ‘we the people’ are stuck paying higher costs," said League of Conservation Voters (LCV) senior federal advocacy campaigns director Leah Donahey.

"A recent analysis estimates the oil industry could rake in over $60 billion in additional profits this year, which would all be paid by consumers struggling with higher energy costs," Donahey added. "Congress should pass this bill as soon as possible to make sure they are putting people over oil CEO profits.”

Mitch Jones, who directs policy and litigation at the watchdog group Food & Water Watch (FWW), said Wednesday that "historical evidence could not be any clearer: Big Oil will undoubtedly leverage the current crisis in the Middle East to maximize profit margins, pinching American families and enriching their executives and Wall Street speculators."

"This demands a policy response—namely, a windfall profits tax... which would recover much of these egregious, opportunistic gains and return them to everyday Americans," Jones added. "At a time when many families are already struggling with skyrocketing energy bills caused by money-driven AI schemes from the tech industry, fossil fuel companies must be held accountable for the profiteering they are orchestrating as we speak.”

LCV and FWW are among the more than 70 groups urging Congress to pass the Big Oil Windfall Profits Tax Act.

“As instability in the Middle East once again drives up oil prices, American families are being asked to pay more for gasoline and other basic necessities,” the groups wrote Wednesday in a letter to congressional leaders. “Meanwhile, the largest fossil fuel companies stand to collect billions in additional profits. A windfall profits tax would ensure that when oil companies benefit from crisis-driven price spikes, some of those gains are returned to the households paying the cost.”