Biden Rebukes Chevron, Big Oil: Is a Windfall Profits Tax Next?

Soaring oil and gas prices are causing a lot of pain at the pump for consumers in the U.S. and around the world. For Chevron (NYSE: CVX) and other oil giants, however, the tight energy market has brought a big boost in profits and impressive share-price gains.

President Joe Biden says those profits are excessive, and he just told the leaders of Chevron and six other companies with extensive refining operations directly. In a letter to them, Biden emphasized the fact that gasoline prices have risen at an even faster pace than crude prices, a situation which he described as "not acceptable." His public rebuke signals the potential that Washington may bring back a legislative response first used on the oil industry more than 40 years ago.

Biden's letter was directed specifically to the heads of energy giants Chevron, ExxonMobil (NYSE: XOM), Shell (NYSE: SHEL), and BP (NYSE: BP), as well as Marathon Petroleum (NYSE: MPC), Valero Energy (NYSE: VLO), and Phillips 66 (NYSE: PSX), which are focused more extensively on refining operations. In it, he referred to the fact that gasoline prices have risen by more than $1.70 per gallon since the beginning of 2022, and he pointed to Russia's invasion of Ukraine as a substantial contributing factor.