USAupdated 17m ago2 min read
Donald Trump Invokes Cold War Defense Production Act To Expand US Oil Production
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Trump uses Defense Production Act to designate oil production and refining essential to national defense. The move authorizes financial incentives for oil activity and for pipelines and energy storage.
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Defense law for oil
President Donald Trump determined on Thursday that petroleum production, refining, and related activities are essential to national defense, and the decision invoked a Cold War-era Defense Production Act provision tied to oil-related activities, pipelines, and liquid fuel storage.
Trump’s memorandum said the United States would not be able to provide sufficient energy services in a “timely manner due to funding constraints, long wait times, licensing and infrastructure bottlenecks, and supply chain restrictions.”
Vice President J.D. Vance said last week the administration would use the Defense Production Act to expand capacity at a Texas refinery owned by Delek US Holdings.
The memorandum also removed certain Section 303 requirements through an emergency waiver, including ordinary congressional notification and authorization constraints, while it did not specify which projects could be funded.
The Al-Manar TV Lebanon report said the US Department of Energy authorized the release of 400,000 barrels of crude oil from the strategic reserve to address disruptions in oil supplies.
Prices, politics, and polls
Energy prices and fuel shortages shaped the political context for Trump’s move, as the sources tied crude oil and diesel price increases to the conflict after the United States and Israel attacked Iran at the end of February. Time Magazine said Brent crude futures rose 1.2% to $114.47 a barrel early Friday, extending gains after Thursday hit a five-month high. Time Magazine also said U.S. diesel pump prices averaged $6.32 a gallon, slightly higher than Thursday but below the September record, according to AAA.
Reuters/Ipsos polling figures entered the reporting as Reuters/Ipsos poll completed last Monday showed only 36% of Americans approve of Trump’s handling of the economy. Mubtada reported that Trump relied on a provision of the Defense Production Act dating back to the Cold War era to provide financial incentives for activities related to oil production, pipelines, and liquid fuel storage.
What comes next
The sources said the Defense Production Act determination could open the door to federal funding for fossil fuel-related projects, while the memorandum itself did not mention specific projects that could benefit from the incentives. Time Magazine said Section 303 allows the President to make purchases, purchase commitments, provide financial support and equipment, and expand production through other measures, as the memo framed energy production shortfalls as a national defense risk. The Al-Manar TV Lebanon report placed the strategic reserve release alongside the broader question of disruptions in oil supplies, stating the authorization was granted by the US Department of Energy.
Al Jazeera’s analysis linked the pressure on reserves to the lowest levels in decades, saying the world’s emergency oil stocks, already tapped heavily since the Iran war began on February 28, sit at their lowest levels in decades. Al Jazeera also reported that on March 11 the IEA’s 32 members agreed to make 400 million barrels available from emergency supplies, and the US pledged 172.2 million barrels from its Strategic Petroleum Reserve.