The White House is considering using the Defense Production Act to help expand U.S. oil refining capacity as tight global petroleum supplies and sharply higher fuel prices expose limits in the nation’s ability to quickly increase refined-product output.

According to Reuters, the proposal was discussed during a recent meeting between President Donald Trump and executives from nearly a dozen U.S. refiners. No final decision has been made, and discussions are expected to continue. Refining executives reportedly told administration officials that federal support could be more effective if directed toward improving efficiency and expanding capacity at existing refineries rather than attempting to build entirely new plants, which would require significantly more capital and years to complete.

The discussion comes as the U.S. refining system is already operating at very high rates. Reuters reported that recent refinery utilization reached 98%, leaving relatively little unused capacity available to respond to disruptions elsewhere in the global petroleum system. At the same time, refined-product markets have tightened sharply. The U.S. national average diesel price surpassed $6 a gallon on Sept. 10 for the first time, according to GasBuddy, while crude oil remains above $100 a barrel amid continued disruptions to global supply.

The Defense Production Act gives the president broad authority to support or prioritize production considered important to national security. Reuters reported that the law has not previously been used to add U.S. refining capacity, although the administration laid some of the groundwork earlier this year when an April presidential determination authorized use of Section 303 of the Act to support domestic petroleum production, refining and logistics capacity.

The White House says expanding refining capacity is an important part of strengthening U.S. energy security and addressing pressure on fuel markets.

“America’s refining capacity is essential to ensuring the United States has continuous access to secure, affordable, and reliable energy,” White House spokeswoman Taylor Rogers told Reuters. She said the administration is also evaluating regulatory changes, faster permitting and additional investment.

For the lubricant industry, the significance is less about an immediate increase in base-oil supply than about the broader pressure now being placed on the U.S. refining system. Many U.S. base oils are produced at refineries that also manufacture fuels, meaning decisions involving refinery investment, crude slates, operating rates and product economics can influence base-oil markets as well. Any effect on lubricant base-stock availability, however, would depend on where investments are made and which processing units are expanded.

The broader message is that refinery capacity has moved from a relatively obscure infrastructure issue into a national energy-security discussion. With U.S. plants operating at very high utilization rates, policymakers are confronting a basic constraint: additional crude supply does not automatically translate into additional gasoline, diesel or other refined products if sufficient processing capacity is not available.

Whether the Defense Production Act ultimately becomes part of that response remains uncertain. But the fact that the White House is considering use of an emergency industrial-policy tool to expand refining capacity underscores how seriously the administration views the constraint.

Sources: Reuters, Sept. 11, 2026; White House Presidential Determination, April 20, 2026.