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windfall profits tax
$1.1 Trillion Big Oil Subsidies Spark Fresh Calls for Windfall Tax on Profits From Trump's Iran War
"The $1.1 trillion that governments are pouring into fossil fuel subsidies this year is not a safety net, it is a ransom payment."
Jul 01, 2026
With the US and Iranian governments engaged in 60 days of peace talks, the United Nations' latest projections about the illegal war's impact on fossil fuel subsidies this week triggered new demands for taxing the windfall profits of climate-wrecking Big Oil.
The United Nations Development Program (UNDP) on Monday released "Military Escalation in the Middle East: Cushioning the Global Shock," a report detailing how governments have navigated the "most severe oil supply shock in history," caused by Iran limiting traffic through the Strait of Hormuz in response to the Trump administration and Israel's unlawful assault.
As fossil fuel prices have soared worldwide, the report states, "governments have moved quickly to cushion households and firms from higher energy prices through fuel subsidies, tax cuts, price caps, strategic stock releases, emergency procurement, export restrictions, demand-management measures, and fuel switching."
"While energy subsidies had fallen by roughly half in 2024 as energy markets stabilized, the downward trajectory has sharply reversed," the document notes. "We estimate that global fossil fuel subsidies are currently on track to reach $1.1 trillion in 2026 and could reach as high as $1.43 trillion in a severe scenario where the average oil price reaches $110/barrel... This represents an estimated $410-$740 billion increase from 2025."
UNDP Administrator Alexander De Croo said in a statement that "the global spillover of the Middle East conflict is profound and potentially long-lasting. Developing countries, many already struggling with debt, have temporarily managed to protect people from the worst of the energy shock."
"These countries are doing everything they can, but there is a hidden cost," he stressed. "To deal with today's crisis, governments are postponing tomorrow's investments. Money that should be building schools, hospitals, and clean energy systems is being used simply to keep economies afloat. Without international support, these countries won’t escape the shock. They are absorbing it at the expense of future growth."
"No country should have to sacrifice its future development to manage a crisis it did not create," De Croo argued. "First, we must unlock multilateral liquidity in ways that are easy to access for low- and middle-income countries. Second, we must accelerate investment in renewable energy. Every clean energy investment reduces exposure to future shocks. The crisis has made one thing clear: Energy security and the energy transition are no longer separate agendas. They are one and the same."
In addition to reiterating calls for a just transition to clean energy, the advocacy group 350.org has repeatedly advocated for a windfall profits tax targeting oil and gas giants cashing in on the conflict in the Middle East. Executive director Anne Jellema pushed for such policies again on Wednesday, noting the new UNDP numbers.
"The $1.1 trillion that governments are pouring into fossil fuel subsidies this year is not a safety net, it is a ransom payment," Jellema declared. "Every dollar spent shielding the fossil fuel industry from the consequences of its own price volatility is a dollar not spent on the clean energy systems that can bring costs down for good."
"We need a phaseout to end public subsidies for fossil fuel companies, and a permanent windfall tax on fossil fuel profits," she continued. "Not a one-off levy, but a permanent, legislated mechanism that redirects the extraordinary profits of an industry driving this crisis into the just transition every country needs. That means affordable clean energy, retrofitted homes, and funding to protect people from the extreme weather unleashed by fossil pollution."
In the United States, where President Donald Trump's war has cost Americans tens of billions of dollars at the pump, Sen. Sheldon Whitehouse (D-RI) and Rep. Ro Khanna (D-Calif.) reintroduced the Big Oil Windfall Profits Tax Act in March, just weeks into the war.
Backing the bill, Food & Water Watch managing director of policy and litigation Mitch Jones said at the time 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. "Fossil fuel companies must be held accountable for the profiteering they are orchestrating as we speak."
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UN Chief: Tax Big Oil's Windfall Profits and Power AI Data Centers With Renewable Energy
"The companies driving climate chaos cannot continue profiting from the destruction while vulnerable countries struggle."
Jun 24, 2026
As world leaders face mounting pressure to tax the windfall profits of fossil fuel giants that are wrecking the planet, United Nations Secretary-General António Guterres pushed for such policies in a pair of speeches at London Climate Action Week, arguing that "polluters must pay."
Since assuming his post nearly a decade ago, the UN chief has repeatedly sounded the alarm about the fossil fuel-driven climate emergency and demanded that rich countries and companies responsible for the crisis contribute financially to adaptation and mitigation efforts, particularly in the Global South.
Just months away from the end of his term, Guterres on Tuesday highlighted the latest warnings from the World Meteorological Organization (WMO) and that "climate disasters are becoming more frequent, more destructive, and more costly." He also flagged key tipping points—including melting ice sheets driving sea-level rise, shifts in conditions of the Amazon rainforest, and the weakening of major ocean circulation systems.
"Here in London—the city of Dickens—it is clear that our world is facing a Tale of Two Crises," he said. "A climate crisis pushing us deeper toward higher temperatures and closer to catastrophic tipping points. And an energy crisis exposing the folly of a world hooked on hydrocarbons."
"On the surface, these crises may seem separate. But they share the same destructive origin: fossil fuels," he continued. "And they demand the same answer: a fast, fair transition to clean energy—and a surge in adaptation, resilience, and climate justice for those already facing climate harm."
The UN leader stressed that "renewables are the cheapest, fastest, and most scalable source of new electricity in most of the world."
"Since 2010, the cost of solar has plummeted by almost 90%, onshore wind by more than 70%, and battery storage by 95%," he pointed out. "More than 90% of new renewable power added globally is already cheaper than the lowest-cost fossil fuel alternatives."
While outlining several essential steps for ending fossil fuel dependence, Guterres issued various calls, such as urging "far greater urgency" to limit any overshoot of the Paris Agreement's 1.5°C temperature goal for this century, and action in response to the exploding energy demands from artificial intelligence data centers.
Data centers have been met with fierce pushback from communities around the world concerned about water, land, and climate impacts. Guterres said that "by 2030, they could use more power than all but five countries—and enough water to meet the basic needs of all 1.3 billion residents of sub‑Saharan Africa for an entire year."
He proposed the AI Environmental Transparency Initiative, "calling on every major AI company to measure and publicly disclose the full environmental impact of its systems—carbon, water, and land footprints—and to commit to power every data center with renewable energy by 2030."
"No more hidden costs. No more shifting the burden onto those least able to bear it," explained Guterres. "It is time to come clean. If AI is to help build a better future, it must be honest about what it costs us now."
As data centers are sucking up massive amounts of power, he acknowledged that "families feeling the strain with higher bills, greater uncertainty, a sense that the system is not working for them—while fossil fuel giants continue to reap extraordinary profits."
"The eight largest fossil fuel companies reported pocketing an extra $6.5 billion in the first quarter of this year alone—and that only includes one month of the Middle East crisis, as oil prices continued to climb and profits to rise," Guterres said.
Without directly mentioning how the US-Israeli war on Iran—which Guterres has criticized—has driven up oil prices around the world, the UN leader said that "these are windfall gains born of pain—of instability, hardship and dependence. I urge governments to tax them."
"Let me conclude where I began—with Dickens," he said. "For the climate agenda, this is indeed the best of times and the worst of times. The worst—because climate impacts are intensifying, tipping points are looming, and the energy crisis has exposed the deep risks of dependence on fossil fuels."
"But also the best—because the renewables revolution is well underway," he added. "A revolution of clean power, electrification, falling costs, rising ambition—and vast opportunity."
Following his special address on Tuesday, Guterres spoke Wednesday at the Climate & Development Financial Forum, where he emphasized that "the countries facing the greatest climate impacts are those who contributed least to causing them."
In addition to arguing that the international community has to "recognize that climate risk is economic risk," "global financial systems must recognize the value of resilience," and "we need better preparation before disasters strike," the UN chief spotlighted the necessity of closing "the finance gap" in terms of adaptation.
He called for developed countries to triple adaptation finance, replenish multilateral climate funds, and prioritize grant-based and predictable finance, and for multilateral development banks to "use their expanded lending capacity to aggressively scale up investment in resilience."
He also reiterated his call for governments "to tax windfall profits from fossil fuel companies to help finance adaptation and climate related losses and damages," declaring that "the companies driving climate chaos cannot continue profiting from the destruction while vulnerable countries struggle."
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As Trump Discovers Gas Price Gouging, Democrats Offer a Solution: Tax Big Oil
"Mr. President: I have a windfall excess profits bill you could support," said one Democratic senator.
Jun 24, 2026
President Donald Trump said Tuesday that he has directed the US Department of Justice to investigate fossil fuel companies for not lowering gasoline prices as the cost of oil declines amid the prospect of an end to the Iran War.
"The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil. Those prices are dropping like a rock! In other words, customers are being 'gouged,'" Trump said on his Truth Social network.
"I have instructed the DOJ to immediately start looking into this," he added. "Gasoline prices better start going down a lot faster than what I’m seeing!"
While benchmark West Texas Intermediate and Brent Crude oil prices have fallen to their lowest levels since Trump launched the illegal US-Israeli war of choice on Iran on February 28, the average price for a gallon of unleaded gasoline in the United States was $3.93 per gallon on Wednesday, around one-third higher than it was the day before the war started but down from a high of $4.52 a month ago, according to the American Automobile Association.
"The price of fuel is not only a national security issue, it impacts the wallet of every American," an unnamed Trump administration official told ABC News on Wednesday following the president's post. "We will always commit to ensuring affordability in this nation."
Responding to Trump's post, US Sen. Sheldon Whitehouse (D-RI) noted on social media that he has a solution for Big Oil price gouging.
In March, Whitehouse 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.”
Democrats in both chambers of Congress have also called for the prosecution of corporations that use the war as a pretext for price gouging.
Polling has shown that Americans largely support a tax on Big Oil windfall profits, which, according to The Guardian, amounted to $23 billion in the first month of the war alone—or $30 million per hour.
NEW: As Americans face rising oil costs, Maine Senate candidate Graham Platner has released an energy plan aiming to “End Big Oil Price Gouging.”We find voters support key elements of the plan, including an oil windfall tax to freeze or lower electricity rates.
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— Data for Progress (@dataforprogress.org) June 18, 2026 at 11:49 AM
Trump has been a staunch supporter of fossil fuel companies. While running for reelection on a "drill, baby, drill" energy platform, he reportedly promised Big Oil executives that he would eviscerate climate regulations enacted by the Biden administration if they gave $1 billion to his campaign.
Fossil fuel interests spent nearly $450 million during the 2024 election cycle on campaign contributions, lobbying, and efforts supporting Republican causes and candidates, including Trump.
As pump prices soared and Americans suffered amid Trump's war, the president—who promised gas under $2 a gallon and no new wars—said that “when oil prices go up, we make a lot of money."
Last week, the Institute on Taxation and Economic Policy estimated that Americans have paid nearly $54 billion extra for gas and fuel—more than $400 per household—than they would have if the war never happened.
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