Trump announces up to $150 million in funding to expand oil production and refining
Key Facts
On October 22, President Donald Trump’s administration announced plans to provide up to $150 million under Section 303 of the Defense Production Act to expand domestic oil production, storage and logistics at U.S. refineries. The Energy Department said the funding could increase U.S. refining output by millions of gallons a day, including gasoline, diesel, jet fuel and other petroleum products. The announcement sets a ceiling for the planned funding, but does not mean the money has already been disbursed or that specific projects have received it. The department said the project selection process is ongoing and that it would announce the results later. It did not specify when the expected increase in output would occur, leaving the timing of any additional supplies reaching the market uncertain.
The presidential determination directed the secretary of war to carry out the decision through purchases, commitments and financial instruments, drawing on the authority of Section 303 of the act. The White House justified the intervention by saying domestic oil production, refining and logistics are essential to U.S. defense preparedness. The memorandum said financing constraints, long lead times, permitting and infrastructure obstacles, and supply-chain barriers were impeding the timely expansion of capacity. The measure could open the door to funding fossil-fuel projects, but the memorandum did not name specific projects that could receive funding. The decision follows the Trump administration’s use of the law to expand capacity at a Delek refinery in Tyler, Texas, according to an earlier statement by Vice President J.D. Vance.
The announcement comes as U.S. fuel prices remained elevated compared with a year earlier, although gasoline and diesel moved in opposite directions during the week ended October 19. The average price of regular gasoline was $4.284 a gallon, down $0.047 from the previous week but up $1.265 from a year earlier, according to the Energy Information Administration. On-highway diesel averaged $6.276 a gallon, up $0.097 for the week and $2.656 year over year. In September, retail gasoline averaged $4.35 a gallon and diesel $6.29, and the agency said higher crude prices and refining margins had pushed prices up. The figures show diesel remained above $6 a gallon in October, while average gasoline prices fell on the week but stayed above their year-earlier level.
Analysts, however, questioned whether the decision could change fuel prices quickly, given the time needed to expand or restart refining units. Patrick De Haan, an oil expert at GasBuddy, told CBS News: "I don't think that will have a real effect." Energy adviser Tom Kloza added that the funding could accelerate some refining expansions, but said short-term benefits were unlikely. Kloza said restarting units "typically takes months and calendar quarters." The lack of selected projects and a timeline makes it difficult to estimate when the measure could affect supply volumes, even as the department expects output to rise by millions of gallons a day.
Fuel prices are shaped by factors beyond domestic refining capacity. CBS reported that the United States produces more fuel than it consumes, while oil prices are set in the global market. The network linked higher prices to shipment disruptions associated with the Iran war and the Russia-Ukraine conflict. Reuters reported that the United States produced an average of about 13.6 million barrels of crude oil a day in 2025, making it the world's largest crude producer. In its forecasts, the Energy Information Administration said diesel prices could remain above $6 a gallon in October before gradually declining as crude prices fall and inventories recover slightly. It also expected retail prices to remain above $4 a gallon through 2027, with distillate inventories staying below the 2021–2025 average.
The Energy Information Administration expected gasoline prices in October to remain near September levels before gradually declining alongside crude prices. It forecast that gasoline margins would remain above seasonal averages through early 2027 because of low U.S. inventories. On the funding decision, the Energy Department said project selection was still underway and that it would later announce the selected entities and projects. The department did not specify when selection would be completed or work would begin, and it gave no date for an increase in refinery output. Trump had announced on October 9 his intention to use the Defense Production Act to increase oil and fuel supplies, before the October announcement detailed funding of up to $150 million.