As Trump’s War Surges Gas Prices, Whitehouse and Khanna Reintroduce Big Oil Profits Clawback to Provide Relief at the Pump

Big Oil Windfall Profits bill would protect consumers from giant oil companies exploiting world events to jack up prices

Washington, D.C. - With gas prices skyrocketing in recent days because of President Trump's war of choice in the Middle East, U.S. Senator Sheldon Whitehouse (D-RI), Ranking Member of the Senate Committee on Environment and Public Works (EPW), and Congressman Ro Khanna (D-CA-17) have reintroduced the Big Oil Windfall Profits Tax Act to curb profiteering by oil companies and provide Americans relief at the gas pump.

"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," said Whitehouse. "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."

"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 Senator Whitehouse to stop Big Oil from profiteering off of foreign wars at Americans' expense and deliver real relief at the pump," said Congressman Khanna.

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 percent from what it was at the start of the year. President 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.

"Let's be crystal clear that when Trump said that '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. The Big Oil Wind Profits Tax Act led by Senator Whitehouse and Representative Khanna would make sure that when oil executives are raking in big profits, they are returned to the American consumers who are feeling the pain of Trump's broken energy prices every day," said Leah Donahey, Senior Federal Advocacy Campaigns Director at the League of Conservation Voters.

"As energy prices skyrocket, the Trump administration continues to exacerbate the affordability crisis as Big Oil and Gas companies seek to profit off of war and geopolitical turmoil. It is a playbook we have seen many times before where fossil fuel companies take advantage of consumers while polluting the environment and looking for ways to lock in more profits through expanded fossil fuel production. It's a dangerous and costly cycle we must break. We applaud Senator Whitehouse and Representative Khanna for introducing this legislation and urge Congress to swiftly enact a windfall profits tax that ensures the fossil fuel industry pays its fair share. It's time to make polluters pay," said Sierra Club Director of Beyond Fossil Fuels Policy Mahyar Sorour.

"Every time oil prices spike because of a geopolitical crisis, American families end up paying the price while the largest oil companies collect billions in unexpected profits. A windfall profits tax is a popular, tested and straightforward way to correct that imbalance. Senator Whitehouse's proposal would ensure that when Big Oil profits from global instability, some of that money is returned to the people paying higher prices at the pump. At a moment when families are already stretched thin, Congress should make sure the benefits of this energy system don't flow only to the companies fortunate enough to sell the fuel," said Cassidy DiPaola, Communications Director for the Make Polluters Pay Campaign.

The Big Oil Windfall Profits Tax would provide consumers guaranteed relief while maintaining American competitiveness and reducing pressure on inflation by attacking corporate profiteering. Under Whitehouse's bill, large oil companies that produce or import at least 300,000 barrels of oil per day (or did so in 2025) will owe a per-barrel tax equal to 50 percent 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. The quarterly tax will apply to both domestically produced and imported barrels of oil to ensure a level playing field.

Smaller companies accounting for roughly 70 percent of the domestic production will be exempt, so oil giants like Exxon Mobil and Chevron cannot gouge consumers further without the risk of losing market share.

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.

In the Senate, the legislation is cosponsored by Senators Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Jeff Merkley (D-OR), Bernie Sanders (I-VT), Chris Murphy (D-CT), Jack Reed (D-RI), Elizabeth Warren (D-MA), Ed Markey (D-MA), Cory Booker (D-NJ), Tim Kaine (D-VA), and Tina Smith (D-MN).

Text of the bill is available here. A one-pager is available here.