Senator Sheldon Whitehouse Pushes U.S. Windfall Tax on Oil Profits

Senator Sheldon Whitehouse (Rhode Island) has introduced a bill that would tax “excess” profits earned by the largest U.S. oil producers since global oil prices surged after the war with Iran in late February. The plan calculates the average pre-war barrel price, compares it to current spikes—at one point exceeding $120 per barrel—and taxes the difference, allowing companies to retain roughly half of the excess while directing the remainder to tax rebates for low-income Americans.

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Whitehouse first proposed a similar windfall tax in 2022 following Russia’s full-scale invasion of Ukraine; that version stalled in Congress. A renewed version this year also failed to advance, but the concept has been enacted abroad. The United Kingdom introduced a windfall tax on oil-industry profits after Russia’s invasion, and the European Union applied a temporary tax that some member states now seek to revive.

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Researchers at the University of Massachusetts Amherst estimate the oil industry earned more than $900 billion in profits after Russia’s invasion. By contrast, the U.K.’s windfall tax has generated over $12 billion through 2025, the latest year with available data. Whitehouse’s office says the U.S. proposal would affect only the biggest producers, leaving roughly 70 % of domestic oil output untouched.

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Whitehouse argues the tax would “spotlight big oil profits” and fund rebates, noting that “wind, solar and battery power, they’re not raising their prices.” The American Petroleum Institute’s senior vice president Dustin Meyer counters that the United States “are the world’s largest oil producer, the world’s largest natural gas producer,” and warns the tax would undermine “investment certainty” and send “the wrong message at the wrong time.”

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• “We're actually somewhat generous about letting them keep half of the excess profits, but we want at least half of it to go back.” — Sheldon Whitehouse, Senator

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• “WHITEHOUSE: Wind, solar and battery power, they're not raising their prices.” — Sheldon Whitehouse, Senator

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• “Proposals like this only erode that certainty and send exactly the wrong message at exactly the wrong time.” — Dustin Meyer, Senior Vice President, American Petroleum Institute

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• “government introduced a windfall tax on the oil industry's profits, which were, you know, kind of reaching astronomical levels.” — Dominic Eagleton, Global Witness (environmental nonprofit)

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