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In remarks from the White House, Biden said he is a “capitalist” and has “no problem with corporations turning a fair profit or getting the return on their investment” but that oil companies currently posting record profits are doing as a result of the war in Ukraine.
“Oil companies’ record profits today are not because they’re doing something new or innovative,” Biden said. “Their profits are a windfall of war—the windfall from the brutal conflict that’s ravaging Ukraine and hurting tens of millions of people around the globe. You know, at a time of war, any company receiving historic windfall profits like this has a responsibility to act beyond their narrow self-interest of its executives and shareholders.”
The president went on to state that oil companies “have a responsibility to act in the interest of their consumers, their community, and their country” and should invest in America by increasing production and refining capacity.
Biden then threatened to impose a windfall tax on the industry if it did not move to lower costs for consumers.
“If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions,” Biden said. My team will work with Congress to look at these options that are available to us and others. It’s time for these companies to stop war profiteering, meet their responsibilities to this country, and give the American people a break and still do very well.”
The ExxonMobil Baton Rouge Refinery in Baton Rouge, La. on May 15, 2021. (Kathleen Flynn/Reuters)
Oil Giants Post Record Profits
Biden reiterated his comments on Twitter later on Monday, stating that the oil industry “has a choice,” and can either bring costs down at the pump for consumers while also boosting production and refining capacity or “pay a higher tax on your excessive profits and face other restrictions.”
Energy prices have soared since the start of 2021, with gas prices rising further following post-pandemic demand and Russia’s invasion of Ukraine in February along with subsequent sanctions from the West on Moscow.
Biden has repeatedly blamed the hefty prices at the pump on Russian President Vladimir Putin, or what he calls “Putin’s price hike” while also taking aim at the oil industry.
While gasoline prices have come down from their peak prices of over $5 a gallon in June, the national average price for regular-grade gasoline was still $3.762 as of Oct. 31, up from $3.401 a year ago, according to AAA.
Biden’s threat of a windfall tax on the oil industry comes shortly after U.S. oil giants ExxonMobil and Chevron announced record profits.
Irving, Texas-headquartered ExxonMobil posted third-quarter 2022 earnings of $19.7 billion, up from second-quarter earnings of $17.85 billion and marking the highest quarterly profit in the company’s history. In the third quarter of 2021, ExxonMobil posted $6.7 billion in earnings.
San Ramon, California-headquartered Chevron reported earnings of $11.2 billion, up from $6.1 billion in the third quarter of 2021.
Elsewhere this week, London-based Shell posted a third-quarter profit of $9.45 billion, which was slightly below the second quarter’s record high but was still up from $4.13 billion in that same period the prior year.
All three companies cited a surge in oil and natural gas prices this year as a reason for their bumper profits.
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