Six EU states push September talks on oil windfall tax

Oil prices have risen about 25% from levels at the outbreak of the U.S.-Israeli war on Iran on February 28, while prices of refined products surged more - European diesel prices rose more than 70% since the war began, while gasoline prices have climbed around 20%.

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Oil prices have risen about 25% from levels at the outbreak of the U.S.-Israeli war on Iran on February 28, while prices of refined products surged more - European diesel prices rose more than 70% since the war began, while gasoline prices have climbed around 20%.

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Oil prices have risen about 25% from levels at the outbreak of the U.S.-Israeli war on Iran on February 28, while prices of refined products surged more - European diesel prices rose more than 70% since the war began, while gasoline prices have climbed around 20%.

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According to reports, the initiative was launched by the German Finance Minister, Lars Klingbeil, and the ministers have called for the issue of a tax to be included on the agenda of a meeting of the bloc's finance ministers in Dublin next month.

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The letter, signed by German Federal Finance Minister Lars Klingbeil along with his Italian counterpart Giancarlo Giorgetti, Spanish counterpart Carlos Cuerpo, Polish counterpart Andrzej Domański, Portuguese counterpart Joaquim Miranda Sarmento and Austrian counterpart Markus Marterbauer, calls for the next Ecofin Council — the EU's Economic and Financial Affairs Council — to place on its agenda a European mechanism taxing windfall oil profits linked to the war between the United States, Israel and Iran.

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The letter, signed by German Federal Finance Minister Lars Klingbeil along with his Italian counterpart Giancarlo Giorgetti, Spanish counterpart Carlos Cuerpo, Polish counterpart Andrzej Domański, Portuguese counterpart Joaquim Miranda Sarmento and Austrian counterpart Markus Marterbauer, calls for the next Ecofin Council — the EU's Economic and Financial Affairs Council — to place on its agenda a European mechanism taxing windfall oil profits linked to the war between the United States, Israel and Iran.

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Six European Union member states — Germany, Italy, Spain, Poland, Portugal and Austria — have sent a joint letter to the Irish presidency of the Council of the European Union, made public on August 22 and 23, 2026.

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The price surge has also boosted refining margins worldwide, a trend illustrated by Australia's Ampol Limited, whose earnings benefited from rising refining margins.

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Several institutional analyses attribute this gap not to the rise in crude oil itself, but to widening refining margins — the share of the final price captured by refiners rather than crude producers.

This distinction between the cost of the raw material and the margin captured downstream in the value chain is precisely what the six ministers are targeting.

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The conflict, which began in late February 2026, led to a partial closure of the Strait of Hormuz, a passage for a substantial share of global maritime oil transit.

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In Europe, the rise in pump prices for diesel outpaced that of gasoline over the period.

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Their request concerns a fiscal framework aimed more specifically at the foreign profits of multinational oil companies, rather than solely domestic producers as in 2022.

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The supply contraction lasted several months before a gradual recovery began, supported by alternative shipping routes and a partial easing of tensions.

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The international benchmark crude price surged with extreme volatility over the period.

Sharp troughs appeared during phases of diplomatic de-escalation, followed by abrupt spikes whenever hostilities resumed or threats emerged against alternative export routes.

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The price surge has also boosted refining margins worldwide, a trend illustrated by Australia's Ampol Limited, whose earnings benefited from rising refining margins.

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The coalition has expanded compared with an earlier initiative, launched several months prior, which brought together five of these six countries and targeted the European Commission rather than the Council presidency.

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One additional country has now joined the effort, which also shifts its target: the letter is now addressed directly to the Irish presidency, held by Ireland from July 1 to December 31, 2026 and embodied by Tánaiste — Ireland's deputy prime minister — and Finance Minister Simon Harris, in office since November 18, 2025.

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One additional country has now joined the effort, which also shifts its target: the letter is now addressed directly to the Irish presidency, held by Ireland from July 1 to December 31, 2026 and embodied by Tánaiste — Ireland's deputy prime minister — and Finance Minister Simon Harris, in office since November 18, 2025.

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One additional country has now joined the effort, which also shifts its target: the letter is now addressed directly to the Irish presidency, held by Ireland from July 1 to December 31, 2026 and embodied by Tánaiste — Ireland's deputy prime minister — and Finance Minister Simon Harris, in office since November 18, 2025.

fact

One additional country has now joined the effort, which also shifts its target: the letter is now addressed directly to the Irish presidency, held by Ireland from July 1 to December 31, 2026 and embodied by Tánaiste — Ireland's deputy prime minister — and Finance Minister Simon Harris, in office since November 18, 2025.

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Oil prices have risen sharply, while refined fuels — particularly diesel — have experienced even larger increases.

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The proposal revives a politically sensitive question first confronted after Russia's invasion of Ukraine: when companies profit unexpectedly from a crisis that raises household energy bills, should governments recover part of those gains for the public?

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The request does not yet amount to a formal European Commission proposal.

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Nor is there agreement among all 27 member states that a new levy should be introduced.

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But securing a discussion among finance ministers would move an idea debated for months onto the EU's formal political agenda.

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Under the Council regulation, taxable profits exceeding by more than 20% the average profits recorded from 2018 onwards were subject to an additional contribution.

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EU rules required a minimum rate of 33%, although member states were allowed to retain equivalent national measures.

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A European Commission assessment put revenues collected under the earlier solidarity mechanism at roughly €26 billion during 2022 and 2023, although implementation differed considerably between member states.

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Oil and refining companies strongly dispute the logic behind renewed extraordinary taxation.

FuelsEurope, which represents the European refining industry, warned earlier this year that repeatedly imposing windfall taxes would undermine investor confidence and make the EU regulatory environment less predictable.

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The money was intended to support households and businesses facing exceptionally high energy costs.

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The analysis covered Shell, BP, TotalEnergies, Eni, Orlen, Repsol, OMV and Moeve.

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It compared adjusted net income during quarters affected by the current energy crisis with results during the same periods in 2025 and then estimated the share associated with EU business.

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Its methodology and conclusions remain those of an environmental advocacy organisation rather than an official EU assessment, but the figures illustrate why the issue has returned to the political agenda.

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Governments want to protect households from prices inflated by geopolitical events.

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But Europe also needs companies to invest heavily in energy infrastructure, security of supply and the transition away from carbon-intensive fuels.

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Even organisations that recognise the redistributive case for windfall taxes have raised questions about how they should be designed.

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More than 170 Christian organisations across 21 EU countries made a similar argument in July, calling for a permanent windfall tax on fossil-fuel profits alongside targeted support for vulnerable households and investment in the energy transition.

Their initiative, linked to the Laudato Si' Movement, framed the issue in terms of social justice as well as climate policy.

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Higher fuel and heating costs take a larger share of the income of poorer households, while transport-intensive businesses can experience sharp increases in operating costs.

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Companies positioned favourably within disrupted energy markets can, at the same time, record profits that would have been unlikely under normal conditions.

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Previous European action was possible because the 2022 energy crisis was treated as an emergency requiring exceptional intervention.

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A new measure would therefore require careful legal construction as well as political agreement.

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The debate also arrives as European governments face competing demands: reducing living costs, financing defence, investing in the green transition and strengthening energy independence.

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