U.S. President Donald Trump invoked the Cold War-era Defense Production Act to support the American oil industry amid rising global energy prices. The decision will allow the government to finance oil extraction, refining, and transportation projects. Reuters reports, UNN writes.
Details
In a presidential memorandum, Trump designated oil production, oil refining, and related infrastructure as critical to U.S. national defense.
This will enable the administration to provide financial incentives for the development of oil refineries, pipelines, and fuel storage facilities. At the same time, the document does not yet identify specific projects that will receive government support.
Why Trump decided to support the oil industry
Oil and diesel prices surged after the start of the military conflict between the United States, Israel, and Iran at the end of February. Ukrainian strikes on Russian oil refineries placed additional pressure on the global fuel market.
The White House explained that without government intervention, the United States could face difficulties securing the necessary energy capacity due to a lack of financing, permitting delays, and infrastructure problems.
Trump’s decision was also made ahead of the November 3 congressional elections. Rising fuel costs create additional political risks for Republicans. According to the latest Reuters/Ipsos poll, only 36% of Americans support the president’s economic policies.
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