Trump Invokes Defense Production Act as Fuel Prices Climb

US President Donald Trump declared domestic oil production, refining and fuel logistics essential to national defense on Thursday (October 22), and directed the Secretary of War to finance new capacity as fuel prices climb less than two weeks before the midterm elections.

In a presidential memo, Trump invoked Section 303 of the Defense Production Act of 1950, a Cold War-era law. The memo authorizes the secretary of war to make “necessary purchases, commitments, and financial instruments” for projects in exploration and production, gathering and transmission pipelines, storage and marine terminals.

Trump also waived the requirements of Section 303(a)(1) through (a)(6), citing the national energy emergency he declared in January 2025 under Executive Order 14156.

“Petroleum fuels the Nation’s Armed Forces, industrial base, and crucial infrastructure,” the memo states. It argues that US industry cannot reasonably be expected to deliver that capacity on time because of “constrained financing, long lead times, permitting and infrastructure bottlenecks, and supply chain limitations.”

Last week, Vice President JD Vance said the administration would use the act to expand capacity at a Texas refinery owned by Delek US Holdings.

Trump signed legislation last year that included US$1 billion in Defense Production Act funding for energy projects critical to national security.

Crude and diesel prices have surged since the US and Israel attacked Iran at the end of February, and the conflict has limited energy shipments worldwide. Ukrainian attacks on Russian refineries have added to fuel shortages.

The average US diesel price has risen 78 percent since the start of the year, from US$3.55 a gallon to US$6.32.

Brent crude also hit US$116 a barrel on Friday after Iran’s Revolutionary Guard claimed it had disabled seven tankers near the Strait of Hormuz.

On Thursday, Trump accused Iran of lying about attacks on ships to drive up oil prices before the elections. Saudi Aramco said on the same day that flows through its East-West pipeline, which bypasses Hormuz, have more than tripled, to 7 million barrels per day from 2 million.

Mike Waltz, the US ambassador to the United Nations (UN), told the Financial Times the war could last another year, though he said he hopes the Iranians “come to the table” before then.

Voters go to the polls on November 3, with Republicans defending control of both chambers of Congress.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.