The largest oil companies in the United States are adopting a more aggressive stance in labor negotiations, aiming to secure greater concessions from unions in new contract agreements.
In recent years, several leading U.S. refining companies have implemented lockouts to enforce their proposals for new labor contracts. This trend began earlier this decade when Exxon locked out approximately 650 workers from its Beaumont refinery for ten months in 2021, marking the longest labor dispute at a U.S. refinery in four decades.
Currently, BP and Marathon are engaged in similar disputes, having locked out workers at their refineries in Whiting, Indiana, and Martinez, California, respectively, over contract disagreements.
These refineries are continuing operations with the help of contractors, supervisors, and replacement workers. This demonstrates that major oil companies are increasingly less hesitant to utilize replacement staff while seeking concessions from unions.
This strategy effectively undermines one of the unions' most potent bargaining tools: the essential nature of skilled unionized labor for operations.
The BP lockout at the Whiting, Indiana, refinery, which began in March 2026 due to contract disputes, indicates that major oil companies are taking a firm stance to compel unions to accept their proposals.
BP has offered an average raise of 13%, or over $7 per hour, spread across four years. They have also agreed that raises in the final two years of the contract would match the levels set in national oil bargaining agreements. However, the proposed 13% raise for the first two years falls short of national oil bargaining standards.
Furthermore, BP seeks to transfer "some non-core craft line work to our incumbent specialized third-party contractors, just as most of our?competitors already do today."
The supermajor has also included proposals for a clear waiver of bargaining rights in two areas: one concerning the use of AI tools and technology, and another related to the use of time clocks.
Eric Schultz, president of United Steelworkers Local 7-1, told Reuters that BP is employing "the exact same playbook" as Exxon did during its 2021 dispute. He noted that BP has hired Jordan Marcks, the former Exxon management official who oversaw the Beaumont lockout, as its lead negotiator in the Whiting dispute.
Marcks, Head of People Relations Americas at BP North America, recently sent a letter to the union requesting a formal response regarding federal mediation. "We are available and prepared to meet. And we continue to believe that direct dialogue is a more productive path than public debate," Marcks stated in the letter to USW 7-1.
The prolonged standoff at the Whiting refinery, now nearing six months, highlights the willingness of major oil firms to maintain operations with replacement workers to secure union acceptance of their proposals.
The resolution of the Whiting refinery dispute could significantly influence how oil majors approach labor contracts and disputes in the future. It also underscores Big Oil's continued efforts to reduce costs and maintain competitiveness, even amidst substantial profits reported over the past six months from their upstream, refining, and trading operations, driven by high oil prices and supply disruptions in the Middle East.
For instance, BP more than doubled its profit in the second quarter compared to the previous year, benefiting from higher oil and gas prices and strong refining margins due to Middle Eastern supply disruptions. These factors, combined with significantly higher refining margins and improved oil and gas trading profits, boosted BP's underlying earnings to $5.7 billion, exceeding analyst expectations.
This surge in earnings comes at a critical time for BP, as CEO Meg O’Neill aims to streamline the business, focusing on the most profitable assets to enhance shareholder value and make BP's stock more attractive to investors.
