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The US president, Joe Biden has accused the oil companies active in the US market of profiting from the war situation. Biden said that the leading oil companies in the country are using the stringent situations created by the war between Ukraine and Russia to generate record-breaking profits. Amid the global fuel crisis, these companies are profiting as Russia has cut down their oil and gas supply to European countries. Because of this, gas and oil prices have skyrocketed globally as Russia was one of the major suppliers. Biden, hence, has threatened the oil companies with the possibility of applying windfall tax for their exploitation of the situation.
Russia is one of the largest producers of oil and gas in the world, coming in third position after the US and Saudi Arabia. Most European countries used to rely on Russia for the import of oil and gas. But due to the sanctions from western countries and restrictions due to its war with Ukraine, Russia has cut down Europe's supply of oil and gas. Because of this, European countries are being forced to purchase their oil from the US and Saudi companies. Hence, even though the world is facing inflation and economic slowdown, the oil and gas industry in the US is generating record-breaking profits and revenues.
The world is ready to enter into the winter season, during which the oil and gas industry experiences the highest demands. But as the prices for oil and gas are still extremely high due to inflation, countries across the world are struggling to manage their oil supplies. Hence, Biden has stated that he is willing to force these companies into acting up to actively lower gas prices. Biden said that the record profits being generated by the oil companies are not because of their exceptional or innovative business practices, but because they exploited war situations. Biden’s battle with the oil companies has been going on for weeks now. But his current ultimatum to the oil companies is to act in favor of their country, their people, and their community. Biden urged these companies to up their production to support their country during the fuel crisis, out of self-interest. This time, instead of a request, Biden has warned the oil companies to either act or be ready for an increase in taxes. Biden said that it is finally the time for these companies to leave their self-interest and act in favor of their country and support the American people.
On the other hand, the oil companies have answered against Biden’s call stating that the oil industry is facing an extremely low supply of oil and gas and rapidly decreasing stocks of diesel. Oil companies also stated that they are already doing their best to assist the American people during the hard times. Darren Woods, the CEO of Exxon Mobil, stated that the company is actively returning a significant share of its profit to help the American people through quarterly dividends. To this statement, Biden replied that giving back some part of profits to the shareholders is nowhere near similar to cutting down the oil prices for the Americans. Because of this, Biden has stated to bring a Windfall tax, which will assist the government in actively splitting these higher profits from oil companies among the American people.
Yash Ranjan11/02/2022
