President Biden Warns Tax Hits On Oil Companies That Profit From War

In a statement on Monday, U.S. President Joe Biden criticized the "war profiteering" of the oil industry and stated that he intended to pursue tax penalties against oil companies unless they used their record profits to reduce consumer costs and increase production.

His remarks come days after oil giants ExxonMobil and Chevron announced record profitability, demonstrating how the industry has benefited from a rise in crude prices following Russia's invasion of Ukraine. Due to Europe's mobilization to replace lost Russian imports, natural gas prices have also increased.

By increasing production and refining capacity, firms have a responsibility to act beyond the narrow self-interest of executive stockholders and to benefit consumers, according to Biden.

In reference to the profits of energy companies, Biden said, "Their profits are a windfall of war."

Biden added that officials will work with Congress to look into the matter. If businesses do not act to reduce prices, "they're going to pay a higher tax on their excess profits and face other restrictions," he said.

Even if the price of oil and gas has recently decreased, it is still significantly higher than it was prior to Russia's invasion of Ukraine in February. The European debate on windfall profits taxation has been rekindled in part because of the significant profits previously declared by TotalEnergies and Shell."It's time for these companies to stop war profiteering ... give the American people a break and still do very well," Biden said.

Beyond global events, the energy sector has experienced higher refining margins, partly as a result of operational problems at some plants. Gasoline prices have increased as a result of the wide margins, a sensitive topic for American voters as the Nov. 8 midterm elections approach.

Because of how hard American families are being hit by continuously high inflation, voters are most concerned about this problem. ExxonMobil's third-quarter profits nearly tripled to $19.7 billion, setting a record for the business. Chevron's profits increased by 84% to $11.2 billion.

In response to complaints that the sector should return earnings to Americans, ExxonMobil Chief Executive Daren Woods stated on Friday that this was exactly what the company was doing in the form of its quarterly dividend. However, the president responded by saying in a subsequent tweet that "giving profits to shareholders is not the same as bringing prices down for American families."

The president and the ruling party are frequently the targets of frustration and rage over detrimental economic conditions such as growing inflation. In June, average gas prices in the U.S. exceeded $5 per gallon, setting a record.