Oil and Windfall Profits During a War

Bit of history for you. Major General Smedley Butler (1881–1940) was a U.S. Marine Corps officer known as the most decorated Marine in American history at the time of his death. He earned 16 medals (including two Medals of Honor) for separate acts of heroism. If you serve in the Corps, I am sure you had this factoid drilled into your head early on in Boot Camp.

General Smedley was also famous for a quote of his: “war is a racket” that is “easily the most profitable” and “vicious” in his 1935 book and speeches. He argued that war creates massive profits for a small “inside” group at the expense of many.  He became a vocal anti-war activist and critic of military-industrial interests after his retirement.

For that comment, he is correct. (68-71) If Trump is involved, somewhere the funds are flowing.

“Thanks to Trump’s Iran War, Big Oil Raking in $30 Million Per Hour in Windfall Profits,” Common Dreams

US President Donald Trump’s war of choice in Iran has been a goldmine for the fossil fuels industry. The industry is suffering from massive windfall profits. Thanks mostly to the immediate rise in the price of petroleum.

Published by The Guardian on Wednesday, their analysis estimates the 100 largest oil and gas companies have collectively raked in an extra $30 million per hour. The windfall comes from Trump launching his war with Iran without congressional authorization.

As reported by The Guardian, in just the first month of the conflict; Big Oil made $23 billion in windfall profits. The industry is projected to haul in an additional $234 billion in windfall profits by the end of the year if the price of oil stays in the $100 range.

The top beneficiaries of the Iran conflict are Saudi Aramco, which is projected to earn $25.5 billion in windfall profits by the end of the year; Kuwait Petroleum Corp., which is projected to earn $12.1 billion; and ExxonMobil, which is projected to earn $11 billion.

The Guardian noted. “The excess profits come from the pockets of ordinary people as they pay high prices to fill up their vehicles and power their homes, as well as from businesses incurring higher energy bills. Dozens of countries have cut fuel taxes to help struggling consumers, meaning those nations, including Australia, South Africa, Italy, Brazil and Zambia, are raising less money for public services.”

The Guardian’s analysis was conducted by climate watchdog Global Witness, using data from intelligence provider Rystad Energy.

Patrick Galey, head of news investigations at Global Witness, told The Guardian that Big Oil’s windfall profits should be a wakeup call to the world about the dangers of relying on fossil fuels.

“Moments of global crisis continue to translate into bumper profits for oil majors while ordinary people pay the price,” Galey said. “Until governments kick their fossil fuel addiction, all of our spending power will be held hostage to the whims of strongmen.”

Climate advocates have for months been calling for a windfall profits tax on Big Oil during the Iran War as a way to retrieve some of the money consumers have lost during the conflict.

Earlier this month, the climate advocacy organization 350.org renewed its previous call to slap fossil fuel companies with a windfall profit tax and then invest the revenue into renewable energy sources to provide real long-term relief to global consumers.

Beth Walker, an energy policy expert at climate change think tank E3G, also recommended a windfall profits tax with the aim of ending reliance on dirty energy sources.

“Governments should use taxes on windfall profits to accelerate the transition to green energy,” said Walker, “rather than deepen dependence on fossil fuels.”