Trump Invokes Defense Production Act for Oil — $150M Refining Boost as Fuel Prices Surge

By The Eagle Wire | October 23, 2026

President Donald Trump has invoked the Cold War-era Defense Production Act to expand domestic oil production, refining and logistics capacity, declaring petroleum infrastructure essential to national defense as fuel prices surge during the ongoing war with Iran.

In a presidential determination issued Thursday, October 22, Trump determined that domestic petroleum production, refining and logistics capacity — including exploration and production, gathering and transmission pipelines, storage facilities and marine terminals — are “industrial resources, materials, or critical technology items essential to the national defense.”

The memorandum is addressed to Secretary of War Pete Hegseth and invokes Section 303 of the Defense Production Act of 1950. It authorizes the War Department to use federal purchases, purchase commitments and financial instruments to support projects the administration considers essential to national defense. Trump also waived certain statutory requirements governing the use of those powers, citing the national energy emergency he declared on returning to office in January 2025.

“Without immediate Federal action, United States defense capabilities will remain vulnerable to disruption,” Trump wrote in the determination.

The White House argument is straightforward: petroleum fuels the nation’s Armed Forces, its industrial base and its crucial infrastructure, and private industry cannot expand the needed capacity fast enough on its own because of “constrained financing, long lead times, permitting and infrastructure bottlenecks, and supply chain limitations.”

On Friday, the Department of Energy announced plans to provide up to $150 million through Title III of the Defense Production Act to expand petroleum production, storage and logistics at domestic refineries, aiming to increase output of gasoline, diesel, jet fuel and other petroleum products by millions of gallons a day. “These Defense Production Act funds will be used strategically and in partnership with private industry to rapidly bolster America’s existing energy infrastructure,” Energy Secretary Chris Wright said.

The move comes as crude oil and diesel prices have surged since the United States and Israel attacked Iran in joint action at the end of February. The conflict has limited energy shipments globally, and Ukrainian attacks on Russian refineries have worsened fuel shortages. Brent crude climbed above $114 a barrel on Friday morning, its highest since May, and the surge poses a political risk for Trump just days before the November 3 midterm elections, with a Reuters/Ipsos poll closing Monday showing just 36 percent of Americans approving of his handling of the economy.

The administration had already signalled the step. Last week, Vice President JD Vance said the administration would use the Defense Production Act to expand capacity at a Texas refinery owned by Delek US Holdings. Trump also signed legislation last year that included $1 billion in Defense Production Act funding for energy-related projects deemed critical to national security.

The determination names no specific projects beyond the Energy Department’s $150 million refinery plan. It opens the door to federal money and purchase guarantees for oil, pipelines and fuel storage — wartime economic powers, deployed in peacetime, to bring fuel costs down before voters go to the polls.

Sources: Reuters; The White House (Presidential Determination, October 22, 2026); US Department of Energy announcement via IANS; Anadolu Agency.