Trump invokes Section 303 to support oil production and refining, tasks Secretary of War with implementation
Key Facts
U.S. President Donald Trump issued a decision to support domestic oil production, refining and logistics capacity, according to a memorandum published by the White House on October 22, 2026, aiming to ensure the timely availability of capacity the administration considers essential. The decision cited obstacles to developing this capacity, including "financing constraints and long project lead times," as reasons presidential intervention was needed. The intervention tools it specifies include government purchases, allowing the government to buy what is needed to support the development of production capacity. They also include "purchase commitments," alongside financial support earmarked for developing this capacity, according to the text of the decision. The move thus combines purchasing and financing tools to address the obstacles the White House identified to expanding oil production, refining and related logistics.
Trump addressed the new memorandum to the Secretary of War, tasking him with implementing the decision on domestic oil capacity. The move followed a decision bearing the same title issued on April 20, 2026, but addressed to the Secretary of Energy, according to the presidential document published through the U.S. Government Publishing Office. Responsibility for implementation has therefore shifted in the new memorandum from the Secretary of Energy to the Secretary of War. The decision exempts the expansion of the capacity it covers from the requirements of paragraphs (1) through (6) of Section 303(a) of the Defense Production Act. It also gives its provisions precedence over those of previous memoranda, proclamations and executive orders to the extent that those provisions conflict with it.
The move comes after U.S. operable atmospheric distillation capacity fell to 18.2 million barrels per calendar day on January 1, 2026, according to the U.S. Energy Information Administration. That represents a decline of more than 250,000 barrels per day, or about 1%, from its level on January 1, 2025. Meanwhile, U.S. refinery capacity utilization reached 98%, according to the latest data cited by Reuters in its report dated September 11, 2026. That high operating rate limits the scope for increasing refinery output solely by raising utilization. Reuters said refining executives told the administration that directing funds toward improving the efficiency of existing refineries or expanding them was preferable to financing an entirely new refinery.
At the project level, Vice President JD Vance announced the use of the Defense Production Act to expand a Delek US refinery in Tyler, Texas, according to Reuters. The project aims to increase processing capacity at the company's refinery. The facility was processing about 74,000 barrels per day at the time of the agency's report dated October 13, 2026. The project places the expansion of an existing facility among the moves the administration has announced using the law to support the refining sector. That approach is consistent with the option executives presented to the administration, which involves directing funding to existing refineries to improve their efficiency or expand them.
The decision coincided with rising U.S. on-highway diesel prices, according to the Energy Information Administration's weekly report. The average price reached $6.276 per gallon on October 19, 2026. The average had stood at $6.179 per gallon on October 12, showing a continued increase from the previous week. In the year-earlier comparison, the price was $3.620 per gallon on October 20, 2025, against the higher level recorded this month. The increase in retail fuel prices comes as the administration seeks, through the purchasing and financial support tools set out in the decision, to develop domestic production, refining and logistics capacity.
Implementation of the expansions, however, faces the long timelines typical of refining projects, which Reuters said are capital-intensive and require many months or years depending on the complexity of the additions. On prices during October, the Energy Information Administration forecast in its Short-Term Energy Outlook issued for the same month that retail distillate fuel prices would remain above $6 per gallon. The agency also warned that a narrowing spread between crude and wholesale fuel prices would not immediately be reflected in retail prices. It said in its report that "lower wholesale refining margins will not immediately translate into lower retail prices." Procedurally, Trump's decision dated October 22, 2026, directs that it be published in the Federal Register.