The EU is considering a windfall profit tax on oil and gas firms to help citizens with soaring energy bills, as six member states push for action amid record corporate profits.
The European Commission is investigating a continent-wide windfall profit tax on oil and gas firms. The move comes as governments across the bloc face pressure to help households struggling with soaring energy bills.
Energy prices have climbed sharply in 2026. Brent crude reached near USD 120 per barrel in late April and remains more than 70% above January levels. The spike follows the US-Israeli conflict with Iran and disruptions to shipping through the Strait of Hormuz. Oil and gas companies have recorded exceptional profits from these market conditions without increasing supply or services.
Wopke Hoekstra, the European Commissioner for climate and taxation, confirmed on 12 October 2026 that the Commission would establish a working group to assess the tax proposal. Hoekstra said excessive corporate profits amid global instability stand at odds with citizens facing rising household costs.
Six member states push for action
Germany, Spain, Portugal, Italy, Poland, and Austria have called on the EU to create a unified levy. Several of these countries have already implemented national windfall taxes. Portugal, for example, introduced a 33% tax on extraordinary profits earned by oil and refining companies in 2026.
Legal challenges from 2022 remain unresolved
The EU introduced a similar windfall profit levy in 2022 following Russia’s invasion of Ukraine. That scheme imposed a 33% minimum levy on surplus profits, defined as earnings exceeding 20% above a company’s average historical earnings. The 2022 tax generated nearly EUR 29 billion (approximately USD 32 billion).
However, legal disputes continue. Companies, including ExxonMobil, challenged the legality of the levy. Hoekstra noted that the Commission must account for these ongoing court cases before finalising any new measure.
Earlier, EU finance ministers discussed a joint windfall tax on energy companies at a meeting in Dublin on 18 September 2026, amid rising oil and gas prices following the closure of the Strait of Hormuz.
