Trump Considers Invoking Defense Production Act to Expand Refining Capacity

Reuters reported that the Donald Trump administration is considering invoking the Defense Production Act (DPA) to expand domestic refining capacity in the United States in response to soaring oil prices driven by the aftermath of the war with Iran.

Citing sources, Reuters reported on the 11th local time that President Trump discussed utilizing the Defense Production Act during a meeting with U.S. oil refining executives on the 1st.

Reuters explained that this unusual discussion reflects the White House's acute sense of crisis, as it needs to stabilize surging gasoline and diesel prices ahead of the November midterm elections.

The Defense Production Act was enacted in September 1950, shortly after the outbreak of the Korean War, to support the supply of military materials needed for the war.

It grants the U.S. president sweeping powers, including compelling private companies to boost the production of key goods.

Previously, President Trump authorized the use of the Defense Production Act in April to support and expand U.S. oil production, refining, and logistics capabilities.

Refinery executives reportedly expressed during the meeting with President Trump that rather than building new refineries, which require massive costs and take several years, channeling federal funds into improving the efficiency of existing facilities or expanding them would be far more effective.

Currently, the operating rate of U.S. refineries is nearing 98%, already reaching capacity limits.

Further compounding the problem, the overall scale of U.S. refining facilities has shrunk as some facilities closed down over the past decade due to deteriorating profitability, and remaining facilities are heavily concentrated along the Gulf Coast.

Soaring oil prices are acting as a major negative factor for President Trump ahead of the midterm elections.

The nationwide average retail price for diesel in the U.S. surpassed 6 dollars per gallon (1 gallon = 3.79 liters) for the first time on the 10th.

The average retail price for diesel on the 11th hit 6.06 dollars per gallon, surging 63.3% compared to 3.71 dollars per gallon during the same period last year.

The average retail price for gasoline climbed to 4.29 dollars.

This represents a 44.0% increase compared to 2.98 dollars just before the war with Iran.

The fundamental issues remain unresolved as bottlenecks in energy transportation persist in the Strait of Hormuz and the Bab el-Mandeb Strait in the Middle East, compounded by Ukraine's strikes on Russian refining facilities.

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.