White House Considers Defense Production Act to Boost US Oil Refining Capacity

The White House is exploring how to use the Defense Production Act to expand domestic oil refining capacity as the ongoing conflict with Iran raises concerns about global crude supply disruptions and rising fuel costs. The move comes as diesel prices have surpassed $6 a gallon nationally and gasoline prices remain elevated, adding political pressure on the administration ahead of the November midterm elections.

Refiners Favor Efficiency Upgrades Over New Plants

The proposal was discussed during a recent meeting between President Trump and nearly a dozen U.S. refining executives. Industry leaders reportedly told officials that federal funding would be more effective if used to upgrade and expand existing refineries rather than build an entirely new facility, which would take years and cost significantly more. U.S. refinery utilization currently stands at 98%, leaving little room for additional output despite strong demand.

Broader Push Includes Foreign Oil Access

The administration is also working to secure additional crude supplies abroad, including a recent equity stake in a Venezuelan oil company with rights to develop major oil fields. Separately, a proposed new refinery in Brownsville, Texas, backed by international investors, has become a test case for expanding domestic refining capacity, though it remains unclear if it will receive federal funding under the act.