WASHINGTON, DC – According to a new report from the Financial Accountability and Corporate Transparency (FACT) Coalition, American oil and gas multinational companies are paying billions more in taxes to foreign petrostates than to the U.S. government.

The report, “America-Last and Planet-Last: How U.S. Tax Policy Subsidizes Oil and Gas Extraction Abroad,” finds that loopholes and subsidies in the U.S. tax code encourage companies to drill overseas. Analyzing disclosures from 11 publicly traded U.S. oil and gas companies between 2018 and 2024, the report shows that, despite collectively producing more oil and gas domestically than in all other countries combined, American multinational oil and gas companies only reported owing less than a fifth of their overall taxes in the U.S.

“American taxpayers are effectively subsidizing oil drilling abroad, including in authoritarian regimes,” said Ian Gary, Executive Director of the FACT Coalition. “This dynamic drains public coffers, weakens U.S. energy independence, and channels taxpayer support to regimes that often lack transparency and accountability. This isn’t just bad tax policy; it’s a raw deal for working families who are picking up the slack at home.”

In one striking example, ExxonMobil reported paying nearly five times as much tax to the United Arab Emirates as to the U.S. federal government in 2023 and 2024. Another leading U.S. oil giant, ConocoPhillips, paid more than twice as much tax to Libya as to the U.S., despite producing more than 70 percent of its oil and gas domestically. 

Chevron, meanwhile, has faced criticism about tax filings it reportedly made in Venezuela, which could have resulted in as much as $300 million worth of associated tax payments to the regime. It is unclear whether Chevron has paid taxes to Venezuela, but if Chevron were in fact making tax payments to Venezuela, directly or indirectly, it would raise significant questions surrounding whether an American company was financing oppression and corruption under Venezuelan president Nicolás Maduro’s regime, and moreover, whether U.S. taxpayers may be underwriting such payments in the form of foreign tax credits.

“Corporate tax avoidance means the U.S. does not have enough revenue to invest in the things our communities need and it also forces regular people to pay more,” said Amy Hanauer, Executive Director of the Institute on Taxation and Economic Policy. “This never makes sense, but it is particularly problematic that, as this report reveals, U.S. tax policy is diverting revenue to other countries while subsidizing huge multinational oil and gas producers who are heating our planet and not paying their fair share.”

The report finds that U.S. oil and gas companies owed an average of only 12 percent in federal taxes on their domestic income since 2017 – well below the 21 percent statutory rate – based on their disclosed “current tax expense”. In Chevron’s case, the effective tax rate on U.S. income since 2017 is as low as 7.9 percent. These low rates are driven by a maze of industry-specific subsidies and rules that allow companies to offset U.S. taxes with payments to foreign governments, including in places plagued by corruption or weak oversight.

“This report makes it clearer than ever: the oil and gas industry is not paying its fair share of corporate taxes in the United States,” said Erich Pica, President of Friends of the Earth. “To address climate change, economic equity and fairness, and funding the social programs, we must repeal all the special tax breaks the oil and gas sector receives and ensure that they are paying tax rates commensurate with what they are paying globally.”

“These policies make no sense economically, environmentally, or ethically,” said Zorka Milin, Policy Director at the FACT Coalition, and report coauthor. “It’s time for Congress to close these loopholes.”

In the report, the FACT Coalition urges Congress to:

• Mandate public country-by-country reporting, ensuring that all multinational corporations disclose where they earn profits and pay taxes.
• End tax subsidies for foreign fossil fuel production, including loopholes allowing oil companies to inflate their foreign tax credits.
• Reform the taxation of U.S. companies’ foreign profits and end incentives for offshoring.

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Notes to the Editor: 

• All figures quoted are the result of calculations based on publicly-reported data from the 11 companies analyzed in the report. See the report’s methodology appendix for more information on the underlying data, calculations, and data limitations.
• According to new research by Oil Change International, oil and gas subsidies in the tax code cost the Treasury as much as $35 billion annually.

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