Joe Biden hints at windfall tax on oil companies
U.S. President Joe Biden urged two major oil giants, Exxon Mobil and Chevron, to expand production on Oct. 31 (local time).
It also threatened that if they do not expand production, they could face a windfall tax on their record-high net profits.
Polls show that the midterm elections on the 8th are unfavorable to the Democratic Party of Korea, and they are fiddling with the windfall tax card with a last-minute turnaround in the economic issue, which is the biggest issue in the midterm elections.
According to foreign media such as the Financial Times (FT), President Biden urged oil companies to expand production again in his White House speech.
In his speech, Biden again urged U.S. households to pour record profits into investment to lower living costs and expand energy production.
Biden also urged Congress to consider imposing punitive taxes and other regulations on oil companies if they do not accept the demand.
U.S. oil giants once again revealed record-high net profits in their earnings reports on Friday.
After Russia invaded Ukraine on February 28, it continued its record-high performance march, which began amid soaring oil prices.
Exxon Mobil, the largest oil major in the U.S., posted a quarterly net profit of nearly $20 billion, while its rival Chevron announced a net profit of $11.2 billion, slightly less than the record-high net profit recorded in the second quarter.
Gasoline prices at gas stations in the U.S. are jumping while oil majorities are passive in expanding production, which is a negative factor for the White House and the Democratic Party ahead of the midterm elections on the 8th.
Although U.S. oil prices have fallen slightly over the peak summer season, they are still more than 60% higher than before Biden took office.
Due to the high price of oil directly touching voters’ skin, the Democratic Party will have to give up its majority status to the Republican Party in the midterm elections on August 8.
Biden also warned energy companies in early October.
“This is my message to U.S. energy companies,” he said. “We should not use our net profit for treasury stock purchases or dividends.” The time is not now,” he stressed.
Biden is urging to invest in profits to lower production costs and expand oil and natural gas production, but Wall Street has a different opinion.
Wall Street investors are pressuring energy companies to return huge profits to shareholders through treasury stock purchases or dividends.
ExxonMobil CEO Darren Woods announced his performance on the 28th, saying, “There are many discussions about the oil industry returning some of its profits directly to Americans,” adding, “In fact, that’s what ExxonMobil does now in the form of quarterly dividends.”
In response, Biden countered in a tweet, “Sharing profits to shareholders is not the same as lowering prices for U.S. households.”
Meanwhile, Biden is releasing strategic reserve oil (SPR) to lower U.S. oil prices.
Biden promised to refill the SPR when oil prices reach $67 to $72 a barrel.