"Overshooting Oil Prices" Triggers Emergency... Trump Pressures Refiners with 'Wartime Act' Card

Calls for Increased Production from the Private Sector Met with Resistance from Companies
Soaring Oil Prices Emerge as Major Challenge Ahead of November Midterm Elections

The Trump Administration, which initiated the war between the United States and Iran, is now grappling with the fallout from the conflict. As oil prices surge, the administration is considering expanding domestic refining capacity through wartime legislation.

According to major foreign media reports on September 12 (local time), President Donald Trump met with representatives from about ten U.S. refining companies on the 1st of the month to discuss using the Defense Production Act (DPA). This move is seen as a response to growing concerns about the need to stabilize soaring oil prices ahead of the upcoming midterm elections in November.

The Defense Production Act was enacted in September 1950, just after the outbreak of the Korean War, to support the supply of military materials necessary for war. Under this law, the President of the United States can mandate private companies to expand the production of key goods.

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

Refining industry representatives reportedly expressed to President Trump that this approach would be inefficient. U.S. refinery utilization rates are already close to 98%, near their upper limit. The refining companies believe that expanding refining capacity would require tremendous costs, and that it would be much more effective to invest federal funds in boosting the efficiency or expansion of existing refining facilities, rather than building new plants that would take several years to construct. Additionally, the reduction in the scale of U.S. refining facilities over the past decade, as some plants have closed due to declining profitability, is also cited as a problem.

The surge in oil prices is considered a critical challenge ahead of the midterm elections. On September 10, the nationwide average price of diesel in the United States surpassed $6 per gallon (1 gallon = 3.79 liters) for the first time in history. On the 11th, the average retail price of diesel reached $6.06 per gallon, up 63.3% year-over-year.

The average retail price of gasoline rose to $4.29, a 44.0% increase compared to $2.98 just before the war with Iran.

Meanwhile, with energy transport bottlenecks at the Strait of Hormuz and Bab el-Mandeb in the Middle East unresolved, and Ukraine now striking Russian refining facilities, there is little sign that oil prices will stabilize.

This content was produced with the assistance of AI translation services.