Trump invokes Defense Production Act and lifts Russia sanctions in bid to cut record fuel prices

Americans paying record prices at the pump — a national average of $4.29 a gallon for gasoline and $6.32 for diesel, up 40% and 74% respectively from a year ago — are the target of a cluster of White House energy moves announced October 25, 2026, including a $150 million invocation of the Defense Production Act and a deal with Russia's Vladimir Putin to ship millions of barrels of diesel to the United States. Whether any of it will move the needle at the pump is a different question.

The centerpiece domestic measure is the administration's use of the Defense Production Act, a Korean War-era law that allows the president to deploy loans, purchase commitments and other tools to incentivize production of critical goods. The Department of Energy said the $150 million in DPA funding will increase U.S. refining output by millions of gallons per day, according to CBS News. The announcement followed a White House meeting between President Trump and refinery executives to discuss steps to bring more capacity online quickly.

On the international side, Trump signed an executive order lifting sanctions on Russian energy — most of which had been imposed only last month under the Lindsay O. Graham Act, which specifically targeted Russia's energy industry, according to OilPrice.com. The sanctions removal is tied to an agreement with Putin for Russia to supply approximately 2.3 million barrels of diesel to the United States and other countries this month, followed by another 7.6 million barrels in November and the months after, OilPrice.com reported.

Oil markets responded with a modest dip early in the week, but from an already elevated base. Brent crude, the international benchmark, was trading at $116 a barrel on Friday — up 2.6% and at its highest level since May — while West Texas Intermediate, the U.S. benchmark, stood at around $103 a barrel, up 3%, according to CBS News. Earlier in the week, before the Friday surge, Brent had briefly dipped to around $107.84 following the Trump-Putin deal announcement, OilPrice.com noted.

The White House also announced additional energy measures, according to its own release. Those claims originate solely from the White House and their details have not been independently verified in the other sources reviewed.

Energy experts who spoke to CBS News were skeptical that the DPA measure would produce meaningful near-term relief.

I don't think that's really going to have any impact.— Patrick De Haan, petroleum expert, GasBuddy

There is no slack in U.S. refining, so production can't be added regardless of political will.— Tom Kloza, chief energy adviser, Gulf Oil

Kloza told CBS News it typically takes months and multiple calendar quarters to bring refining units back into service. He did allow that DPA funds could speed up some expansions already in progress, but said short-term benefits remain unlikely. A White House official countered that the DPA money targets expansion and modernization of existing infrastructure — a faster path than building new refineries from scratch.

The Russia diesel deal drew similar skepticism. Analysts cited by OilPrice.com said the volumes — roughly 9.9 million barrels across the coming months — are nowhere near large enough to shift the global diesel market balance. Oil traders appeared to agree only partially, producing a modest price dip rather than a sustained decline. Uncertainty about how long the sanctions exemption will last and continued Iranian strikes on tankers in the Strait of Hormuz are keeping markets on edge, OilPrice.com reported. The seven-day moving average of oil flow through the Strait has fallen to 8.5 million barrels daily from an estimated 20 million barrels daily the previous week, according to data from Kpler cited by OilPrice.com.

A spokesperson for the American Fuel & Petrochemical Manufacturers, the trade association representing U.S. refiners, told CBS News that the country's 128 operating refineries already produce more fuel than the U.S. consumes — 9.5 million barrels of gasoline per day against domestic consumption of 8.9 million, and 5.3 million barrels of distillate fuel oil per day against consumption of about 3.6 million. The U.S. exports roughly 1.4 million barrels of diesel per day. Because oil prices are set on the global market, domestic production levels have limited direct effect on what Americans pay at the pump; the ongoing Iran conflict and the Russia-Ukraine war have been the primary drivers of elevated prices, according to CBS News.

The practical timeline for any price relief remains unclear. The DPA refining investments will take months to materialize. The Russian diesel shipments, if they arrive as agreed, would begin this month but analysts say the volumes are too small to move global prices significantly. Meanwhile, the geopolitical disruptions driving crude higher — Iranian tanker strikes and the Russia-Ukraine conflict — show no sign of resolution.

Why it matters — With gas and diesel at multi-year highs and a majority of Americans pessimistic about the economy, the success or failure of these measures will directly affect household budgets and the political landscape heading into the next news cycle.

Sources differ on Near-term impact of DPA refining investment on fuel prices: Will increase refining output by millions of gallons per day and lower fuel prices for Americans (whitehouse.gov / Department of Energy) vs 'I don't think that's really going to have any impact' — and no slack exists in U.S. refining to add production regardless of political will (cbsnews.com)

Sources differ on Whether Russia-U.S. diesel volumes are large enough to affect global prices: Volumes are nowhere near significant enough to make a difference in the global diesel market balance (oilprice.com (analysts)) vs Oil traders responded with a modest price dip, suggesting some market belief in the deal's signal (oilprice.com)

Reported by whitehouse.gov, cbsnews.com, oilprice.com