Whitehouse and Khanna Propose Tax on Oil Windfall Profits

U.S. gasoline prices reached an average of $4.11 per gallon as the American Automobile Association reported regular gas costs rising $1 per gallon and diesel rising $1.61 compared to last year. The price surge follows a six-month conflict between the United States and Iran, which resulted in the closure of the Strait of Hormuz and the restriction of 20% of global oil and natural gas shipments. Brent crude prices climbed from $70 to over $100 per barrel during this period.

Sheldon Whitehouse and Representative Ro Khanna introduced legislation to impose a per-barrel excise tax on large oil producers and importers to redistribute funds to consumers. The move comes as oil companies reported massive second-quarter profits exceeding $26 billion. ExxonMobil Inc. more than doubled its profits to $14.5 billion, while Chevron's profits reached $12.1 billion, representing a fivefold increase over 2025 levels. These companies benefited from high crack spreads and the loss of competitor facilities in Russia and the Middle East.

While U.S. refineries profited from the supply disruptions, other nations experienced severe energy shortages. Government offices closed in Nepal and Sri Lanka, and Australia implemented sporadic fuel rationing.