To amend the Internal Revenue Code of 1986 to impose a windfall profits excise tax on crude oil and to rebate the tax collected back to individual taxpayers, and for other purposes.

HR 7960, the Big Oil Windfall Profits Tax Act, was introduced on March 17, 2026 by Rep. Khanna (D-CA) and referred to the House Ways and Means Committee. The bill imposes a 50% excise tax on the difference between the quarterly average Brent crude price and the 2025 annual average Brent price ($74.72/bbl), applied to each barrel of crude oil extracted domestically or imported into the U.S. The revenue is rebated to individual taxpayers. The bill is in the earliest legislative stage — one committee referral, no hearings, and 5 cosponsors (all Democrats). An identical companion bill (S4111) was introduced in the Senate and referred to Finance. This is an authorization-only bill that does not directly allocate spending — it establishes a tax collection mechanism. The funding impact is a direct reduction of oil company profits, not a government spending program. There is no authorized appropriation; the mechanism is purely a tax increase on the energy sector with a rebate transfer to taxpayers. Structural winners: Individual taxpayers receiving rebates (minor boost to consumer spending). Structural losers: All U.S. crude oil producers and refiners that import crude — the tax is a direct per-barrel cost. Pure-play U.S. E&P companies like $EOG and $OXY face the highest proportional impact because 100% of their production is domestic. Integrated majors like $XOM and $CVX also face significant margin compression on their U.S. upstream segments. Independent refiners like $MPC, $PSX, and $VLO are hit on the import side, facing higher feedstock costs. Real market data shows the sector already under pressure: $XOM is down 11.95% in 30 days, $CVX down 10.79%, $EOG down 9.21%, $OXY down 10.27%. The 7-day bounce (+0.71% to +4.74%) suggests a short-term recovery, but the bill adds a bearish legislative overhang. Critically, on April 20, 2026, the President issued five DPA memoranda to accelerate domestic energy production, including petroleum, natural gas, LNG, coal, and grid infrastructure. These executive actions directly stimulate domestic energy supply and investment, creating a policy conflict: the DPA orders push for more production while this bill would tax that production at 50% above the 2025 baseline. The net effect depends on which policy gains traction — currently, the DPA actions have more immediate force (presidential memoranda are executive actions), while HR7960 is stuck in committee. Timeline: The bill has no hearings scheduled, 5 Democratic cosponsors, and a Republican-controlled House (119th Congress has a GOP majority). Passage probability is extremely low in this Congress. The bill's main market impact is as a narrative risk — it signals the policy conversation around oil profits, which could gain traction if Democrats retake Congress in 2027. In the near term, the DPA memoranda are far more consequential for the sector.