The White House is considering using the Defense Production Act to boost oil refining capacity in the U.S., as reported by Reuters on Friday.
Currently, American refineries are operating at nearly full capacity, specifically 97.8% during the week ending September 4, according to the Energy Information Administration. Executives from the refining sector advised federal officials recently that federal funds should focus on enhancing the efficiency of existing facilities or expanding them instead of building new refineries, as relayed by two anonymous sources familiar with the discussions.
No definitive actions have been determined yet, and it’s worth noting that, historically, this act has never been employed to increase refining capacity. A brand new facility would require a significant investment and, conceivably, take years to get up and running, according to the same sources.
Diesel prices reached an average of $6.06 per gallon on Friday, marking the first occasion that the national average has exceeded $6, a jump from $5.85 on September 4 and $3.71 last year, as reported by AAA. Meanwhile, the price of regular gasoline stood at $4.29.
President Donald Trump mentioned on Wednesday that he doesn’t expect oil prices to drop before the midterm elections in November.
“Right after the election, oil prices are going to be tumbling downward,” he stated to reporters at Joint Base Andrews.
White House spokesperson Taylor Rogers commented that, “America’s refining capacity is essential to ensuring the United States has continuous access to secure, affordable, and reliable energy. Expanding that capacity is a top priority for the President and his energy team, who are evaluating concrete options to increase our refining capacity through regulatory reform, faster permitting, and additional investment.”
Trump had a meeting with nearly a dozen refiners at the White House on September 1.
America First Refining did not respond immediately to a request for comment.
The Defense Production Act allows the president to direct industrial resources and provide financial incentives for materials considered crucial to national defense. Earlier in April, Trump determined that domestic petroleum production, refining, and logistics capacity are vital for national defense, according to a memo to the energy secretary.
Since the onset of the war on February 28, Iran has blockaded the Strait of Hormuz, which previously accounted for about a fifth of the world’s oil and petroleum consumption in 2024 and early 2025, according to the Energy Information Administration.
A proposed refinery at the Port of Brownsville, Texas, stands as a test case for this initiative, though it remains unclear if the project will receive funding under the act. America First Refining is planning a facility with a capacity of 168,000 barrels per day, which Trump announced in March, characterized by the Port of Brownsville as the first new Gulf Coast refinery in nearly half a century.
Reports indicate that Donald Trump Jr. holds a stake in America First Refining, described by ProPublica in June, although a spokesperson clarified he is merely a passive minority investor without an operational role. Cantor Fitzgerald, with its former leader now serving as Commerce Secretary, is reportedly acting as the company’s financial advisor.
Additionally, the administration is looking to increase foreign supply. The Pentagon’s Office of Strategic Capital possesses a 35% stake in North American Blue Energy Partners, a Venezuelan company that has been granted rights to manage 17 oil fields, and the White House claims that production will eventually be processed through U.S. refineries, as reported by Reuters.
