President Donald Trump has urged oil companies to expand refining capacity in an effort to lower fuel costs at the pump following recent geopolitical shocks involving Iran. According to a report from The Wall Street Journal, Trump met with oil executives on Tuesday to discuss scaling up refining operations.
The report suggests that convincing producers to build new refineries could be a difficult task. The process is described as a "tough sell" because building new facilities may not be as profitable for the enterprises. Additionally, the construction of refineries is noted to require billions of dollars and take years to execute.
GasBuddy analyst Patrick De Haan provided further context on the challenges of this approach. He explained that oil producers are beholden to shareholders and lack the incentive to lower gas prices on command. De Haan noted that while companies could choose to build new projects, the results would not be immediate, as such steps would take years to bear fruit.
Amid these discussions, Chevron Corp. (NYSE: CVX) recently announced plans to invest over $7 billion over the next five years. The goal of this investment is to double production to approximately 600,000 barrels per day from 2026 levels.
Current market data indicates that West Texas Intermediate (WTI) crude futures for October were trading at $90.04 per barrel, while Brent crude futures for November hovered around $94.5 a barrel at the time of writing. On the consumer side, the national average price for gasoline remained above $4 per gallon, with diesel averaging $5.6879 per gallon, according to the American Automobile Association (AAA).
