Trump Directs Pentagon to Use Defense Production Act for Domestic Oil and Diesel Production

President Trump directed the Department of War on Thursday to invoke the Cold War-era Defense Production Act to expand American petroleum production, refining capacity, and related infrastructure.

In a speech in Iowa, Trump said the department will release $150 million to increase refining capacity and produce more diesel and gasoline. He signed a presidential memorandum the same day directing War Secretary Pete Hegseth to use the 1950 statute to complete purchases, make commitments, and deploy financial instruments to expand domestic petroleum infrastructure. The memorandum states that petroleum fuels the nation’s armed forces, industrial base, and critical infrastructure, and that without immediate federal action defense capabilities remain vulnerable to disruption.

The determination finds that domestic petroleum production, refining, and logistics capacity—including exploration, pipelines, storage, and marine terminals—are industrial resources essential to national defense. It waives certain statutory requirements under Section 303 of the Act to accelerate capacity expansion. The United States averaged roughly 13.6 million barrels of daily crude production in 2025, the highest in the world, yet the administration has cited financing constraints, long lead times, permitting bottlenecks, and supply-chain limitations as barriers to timely increases in refined product output.

Vice President JD Vance said last week that the administration would use the Defense Production Act to expand capacity at a Texas refinery owned by Delek US Holdings. Legislation signed last year included $1 billion in Defense Production Act funding for energy projects deemed critical to national security. Diesel prices have remained elevated following the U.S.-Israel conflict with Iran that began in late February and subsequent Ukrainian strikes on Russian refining capacity.

The Defense Production Act, enacted in 1950 during the Korean War, grants the president authority to prioritize and expand production of materials essential to national defense. Previous administrations have used it for critical minerals, medical supplies, and other strategic items. The current determination builds on earlier 2026 actions that applied the statute to grid infrastructure and other energy systems.