The numbers come first.
When Chevron posted its highest quarterly profit in six years on July 31, 2026, it was not an outlier. Analyst firm Wood Mackenzie estimates the global oil and gas industry is on course for a cash windfall of $495 billion in 2026 — profit above and beyond what the sector projected before the U.S.-Israel war with Iran began. Of that total, the 49 largest oil and gas companies are expected to pocket roughly $272 billion, an amount Wood Mackenzie says is equal to approximately 70% of their combined annual investment budgets.
President Donald Trump has said the oil companies are 'making too much money.' Three separate bills in Congress — all sponsored by Democrats — are now moving to act on that sentiment.
The first, from Sen. Sheldon Whitehouse and Rep. Ro Khanna, would levy a 50% excise tax per barrel on the difference between the current average Brent crude price and the 2025 average of $69. At the July 2026 average of $84, a company would owe $7.50 per barrel, regardless of production costs or underlying profitability.
The second, the Iran War Oil Crisis Windfall Profits Tax Act introduced by Rep. Brad Sherman, goes further: a 100% tax on the amount by which crude prices exceed $75 per barrel — $9 per barrel at July's average — active only until hostilities end and prices fall below that threshold.
A third proposal, the Taxing Buybacks from Big Oil Windfalls Act from Sens. Ron Wyden, Chuck Schumer and Michael Bennet, takes a different angle: raising the excise tax on stock buybacks from 1% to 25% for large oil and gas companies.
History offers a cautionary data point. The U.S. Crude Oil Windfall Profit Tax, enacted in 1980, was projected to raise $393 billion over ten years. It raised approximately $80 billion — roughly one-fifth of the projection — before being repealed in 1988 after prices collapsed and domestic production was increasingly exempted.
The American Petroleum Institute has argued that proposals like these 'erode the certainty needed to make investment' decisions. The Tax Foundation has warned that 'taxing producers is the opposite of a solution to a supply crisis.' Neither organization, however, has put a specific dollar figure on deterred investment.
The balance-sheet data complicates the industry's own argument. According to Wood Mackenzie, investment spending has barely moved, stock buybacks are on course to fall, and dividends have stayed flat. The cash is accumulating on balance sheets, not flowing into new production.
For context, the U.K.'s windfall tax on North Sea oil and gas — layered on existing levies for a combined rate of 78% on profits — is on course to generate an estimated 8 billion pounds (about $10.8 billion) in 2026, roughly double its 2024–25 revenue. A one-time EU-wide measure after Russia's 2022 invasion of Ukraine raised 26.15 billion euros ($30 billion); five EU countries are now calling for a second round.
CEO Times take: The free-enterprise case against windfall taxes rests on investment incentives — and that case is weakest precisely when companies are sitting on cash rather than deploying it. The 1980 U.S. experiment is the honest benchmark: Congress projected $393 billion and collected $80 billion, a lesson in how quickly price assumptions collapse. The three Democratic bills before Congress are price-triggered, not profit-triggered, meaning a company losing money on high-cost barrels could still owe. That is sloppy tax design, and the Tax Foundation is right to flag it. But the industry's credibility on the investment argument erodes every quarter that $272 billion sits idle on balance sheets. Capital rewards clear rules — and right now neither side is offering them.
