President Trump announced Thursday that he invoked the Cold War-era Defense Production Act to enable his administration to offer financial incentives for oil-related activities, including drilling, building pipelines and storing liquid fuels.
The Defense Production Act empowers presidents to do what they deem necessary to push the private sector to increase production of any goods or services viewed as critical for national defense or emergency preparedness.
“In breaking news, my administration is using the Defense Production Act to release $150 million to increase American refining capacity to produce more diesel and more gasoline at record levels,” Mr. Trump told supporters at a midterm rally in Sioux City, Iowa.
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“The fact is, we have more oil than Russia and Saudi Arabia combined,” he said, adding the challenge is getting the U.S. up to capacity.
Prices for crude oil and diesel have surged since the U.S. and Israel attacked Iran in a war that began in late February. The conflict has reduced energy shipments globally, which are also in short supply because of Ukrainian attacks on Russian refineries exacerbating the fuel shortages.
Soaring oil prices threaten Mr. Trump and Republicans’ control of the House and Senate in the Nov. 3 midterms. A Reuters/Ipsos poll released this week found that 31% of Americans approve of Mr. Trump’s handling of the economy.
The directive Mr. Trump signed invoking the Defense Production Act said that unless the U.S. takes action, it will be unable to provide energy services in a “timely manner due to constrained financing, long lead times, permitting and infrastructure bottlenecks and supply chain limitations.”
The memo does not list projects that will be funded or how much more oil the U.S. could produce under the Defense Production Act. The U.S. produced an average of 13.6 million barrels of crude oil a day in 2025 according to the Energy Information Administration, making it the largest crude producer in the world.
Last week, Vice President JD Vance said the administration would use the Defense Production Act to expand capacity of a Texas refinery owned by Delek U.S. Holdings.
Trump signed legislation last year that included $1 billion in Defense Production Act funding for energy-related projects deemed critical to national security.
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