US President Donald Trump has invoked a Cold War-era defence law to support oil production, refining and related activities, potentially unlocking federal funding for fossil fuel projects.

In a presidential memo issued on Thursday, Trump declared petroleum production, refining and related activities essential to national defence. He also invoked provisions of the Defence Production Act, allowing the administration to offer financial incentives for oil-related operations, pipelines and liquid fuel storage.

Crude oil and diesel prices have surged since the United States and Israel launched joint attacks on Iran at the end of February. The conflict has disrupted global energy shipments, while Ukrainian attacks on Russian refineries have added to fuel shortages.

Rising fuel costs pose a political challenge for Trump ahead of the November 3 elections, as Republicans seek to retain control of both chambers of Congress. A Reuters/Ipsos opinion poll that closed on Monday found that only 36% of Americans approved of Trump's handling of the economy.

The presidential memo warned that the US could struggle to provide sufficient energy services in a "timely manner due to constrained financing, long lead times, permitting and infrastructure bottlenecks, and supply chain limitations."

The memo did not identify specific projects that could receive funding. The US produced an average of around 13.6 million barrels of crude oil per day in 2025, making it the world's largest crude oil producer.

Last week, Vice President JD Vance said the administration would use the Defence Production Act to expand the capacity of a Texas refinery owned by Delek US Holdings.

Last year, Trump signed legislation that included $1 billion in Defence Production Act funding for energy-related projects considered critical to national security.