President Donald Trump is pushing oil companies to build more refineries in hopes of bringing down gas prices, but the reality on the ground is far more complicated than a presidential nudge.
Trump Wants More Refineries to Tame Gas Prices, but It's Not That Simple
MarketDash
The president is pushing oil companies to expand refining capacity, but analysts say it's a tough sell with years-long timelines and little profit incentive.
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A Tough Sell
According to a Wall Street Journal report, Trump met with oil executives on Tuesday and urged them to scale up refining capacity. But the report notes that this could be a "tough sell" for producers, as new refineries aren't exactly cash cows for the companies.
Building a refinery costs billions of dollars and takes years to complete. GasBuddy analyst Patrick De Haan, in an exclusive interview with MarketDash, pointed out that oil producers answer to shareholders, not the White House. "Trump cannot direct them to lower gas prices because they have little incentive to do so," De Haan said. Even if companies decided to build new projects, he added, it would take years before they'd actually produce anything.
Chevron Charts Venezuela Investment
Meanwhile, oil giant Chevron Corp. (CVX) recently announced plans to invest over $7 billion over the next five years in Venezuela, with a goal of doubling production to roughly 600,000 barrels per day from 2026 levels.
This follows Trump's claim that the U.S. had secured 65 billion barrels of oil from Venezuela, calling it the "biggest oil deal" in world history. But even with Venezuelan oil potentially flowing, De Haan warns that refining capacity remains a major hurdle. "There was no room for more oil," he said, noting that refineries were already running at 95% capacity all summer.
Oil, Gas Prices
As of this writing, West Texas Intermediate (WTI) crude futures for October were down 1.07% at $90.04 per barrel, while Brent crude futures for November slipped 1.18% to around $94.5 a barrel.
At the pump, the national average gas price stayed above $4, coming in at $4.1203 per gallon on Wednesday, according to AAA. Diesel was even pricier, averaging $5.6879 per gallon.
Trump's 'Tanker for Tanker' Policy
The push for more refining comes amid escalating tensions with Iran. Trump reportedly approved a "tanker for tanker" policy against Iran, and the U.S. has already struck two Iranian oil vessels as part of a naval blockade. This follows an exchange of missile strikes after the U.S. hit Iranian targets on Sunday.
Iran retaliated by targeting U.S. assets in the region and criticized a strike in Iran's Kuhestan that killed four people, including a child, at a wedding celebration.
In a characteristically bold move, Trump suggested renaming the Strait of Hormuz the "Trump Strait," touting U.S. control over the vital waterway. The idea drew sharp criticism from Democratic leaders, including Senate Minority Leader Sen. Chuck Schumer (D-NY).
So while Trump's refinery push sounds good in theory, the combination of shareholder pressure, years-long project timelines, and already-strained refining capacity means cheaper gas isn't coming anytime soon.
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