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A gas station in Baltimore., March 17, 2026.<\/span>Stephanie Scarbrough\/AP<\/span><\/p>\n<\/div>\n This story was originally published by the<\/em> Guardian<\/a> and\u00a0is reproduced here as part of the\u00a0<\/em>Climate Desk<\/a>\u00a0collaboration.<\/em><\/p>\n With big oil<\/span> companies poised to reap billions of dollars in profits from the war in\u00a0Iran<\/a>, Democratic lawmakers and progressive groups are calling for a windfall tax on major fossil fuel companies.<\/p>\n The US-Israeli strikes on Iran have triggered the largest ever disruption to fuel supply,\u00a0according to<\/a>\u00a0the International Energy Agency, sending crude costs surging over $100 per barrel in recent days. Those high prices have hit US pocketbooks, with average domestic gas prices topping\u00a0$3.70 a gallon<\/a>, and Americans spending more than an additional $2 billion to fill their tanks in the past fortnight according to\u00a0one estimate<\/a>.<\/p>\n \u201cSurges in energy prices exacerbate inequality in our societies.\u201d<\/p>\n<\/blockquote>\n<\/figure>\n As ordinary people struggle, corporations are seeing windfall gains. Since the war began last month,\u00a0share prices<\/a>\u00a0for US oil giants ExxonMobil and Chevron have climbed by more than 5 percent and 7 percnt respectively, while their market values have\u00a0soared<\/a>.<\/p>\n With oil prices continuing to rise, the Sen. Sheldon Whitehouse (D-R.I.) and Rep. Ro Khanna (D-Calif.) have proposed taxing big oil\u2019s windfall profits from the Iran war-fueled crisis. \u201cTrump\u2019s war of choice in Iran is not just a moral mistake but an economic blunder that is skyrocketing gas prices for working Americans,\u201d said Khanna in a statement.<\/p>\n The Guardian<\/em> has contacted the American Petroleum Institute, the top US oil lobby group, for comment.<\/p>\n Hours before the bill\u2019s release, dozens of consumer and environmental advocacy organizations sent a formal letter to Congress backing such a proposal. \u201cRevenue from a windfall profits tax should be returned directly to struggling American households to help offset rising costs,\u201d says\u00a0the letter<\/a>, which was signed by the Make Polluters Pay campaign, the Sierra Club, Public Citizen, and more than 70 other state and national groups.<\/p>\n The time to impose the tax is now, supporters say. If oil prices remain at their current level, gas prices will\u00a0continue to rise<\/a>\u00a0while US fossil fuel firms could collect an additional $60 billion this year, analyses from\u00a0consultancy firm Rystad Energy<\/a>\u00a0and\u00a0investment bank Jeffries<\/a>\u00a0show.<\/p>\n \u201cEnergy producers and commodity trading firms benefit from volatility in energy prices,\u201d Isabella Weber, an economics professor at the University of Massachusetts Amherst, told the Guardian<\/em> last week. Windfall taxes, she said, can \u201craise money to cushion the more vulnerable sections of society from cost-of-living pressures.\u201d<\/p>\n Though the United States has not imposed a windfall tax on oil companies since the 1980s, the sector has profited from various fuel crises since. After Russia invaded Ukraine in 2022, oil companies recorded historic profits\u2014profits that one 2025 study co-authored by Weber found were 13 percent higher than total investment in the US\u2019s green energy transition that year.<\/p>\n \u201cThe only reason Congress won\u2019t pass it is because too many politicians are bought and paid for by big oil.\u201d<\/p>\n<\/blockquote>\n<\/figure>\n Donald Trump has insisted that such excess profits benefit ordinary Americans.<\/p>\n \u201cThe United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,\u201d Trump posted on Truth Social\u00a0last week<\/a>.<\/p>\n The post only holds true if by \u201cwe\u201d Trump meant to refer to wealthy people, according to another 2025 analysis co-authored by Weber. Oil firms\u2019 profits flow to those who own shares in them, either directly or via retirement funds, pensions, or other investments. Those people tend to be well-off, the\u00a0study found<\/a>.<\/p>\n During the 2022 fuel crisis triggered by Russia\u2019s war on Ukraine, 50 percent of the profits of US oil and gas firms went to the wealthiest 1 percent of individuals, while the bottom 50 percent only obtained 1 percent of profits. \u201cSince stock ownership is so heavily skewed towards the richest people in our societies, record profits for energy firms means record income for them,\u201d said Weber. \u201cThe evidence clearly shows that surges in energy prices exacerbate inequality in our societies.\u201d<\/p>\n A windfall tax could help \u201ccontain inequality and raise money to cushion the more vulnerable sections of society from cost-of-living pressures,\u201d said Weber.<\/p>\n In their Tuesday letter to congressional leaders, supporters cited a University of Massachusetts Amherst study indicating that if a similar tax had been enacted during the 2022 price shock, roughly $1,715 could have been returned to each American household. \u201cOther countries have already demonstrated that this approach works,\u201d the letter says, noting that after the 2022 fuel shock the United Kingdom imposed a windfall tax on oil and gas companies, raising $3.3 billion in its first year and $4.5 billion the next.<\/p>\n Khanna and Whitehouse previously proposed a windfall profits tax during the 2022 energy crisis. At the time, one poll showed\u00a0some 80 percent<\/a>\u00a0<\/strong>of Americans supported the move.<\/p>\n \u201cA windfall profits tax is overwhelmingly popular,\u201d said Jamie Henn, director of the anti-oil and gas nonprofit Fossil Free Media, which helped organize support for the current and earlier proposals. \u201cThe only reason Congress won\u2019t pass it is because too many politicians are bought and paid for by Big Oil.\u201d<\/p>\n Ultimately, the US should quickly move toward a managed transition away from \u201cvolatile fossil fuels,\u201d said Collin Rees, US policy manager at the climate research and advocacy nonprofit\u00a0Oil<\/a>\u00a0Change International, which signed the Tuesday letter supporting a windfall tax.<\/p>\n \u201cThat could deliver huge potential benefits there in terms of decreased conflict, in terms of ending the deadly wars for oil that the US keeps waging,\u201d he said. \u201cIn the meantime, we need to stop the oil billionaires from profiteering.\u201d<\/p>\n<\/p><\/div>\n\n
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