Trump Ramps Up Pressure on Squeezed Refiners to Ease Pump Prices

(Bloomberg) — President Donald Trump pressured U.S. oil refiners to increase domestic gasoline and diesel production during a closed-door meeting Tuesday, as he grapples with high prices and growing concerns about the cost of living ahead of the November midterm elections. Most Read Bloomberg Trump made clear that he wants lower gas prices at the pump for Americans and asked executives how to increase refining capacity, according to a White House official who provided details on condition of anonymity. The official said industry representatives were aligned with that goal and that the discussion addressed regulatory changes, faster permits and additional investments. The head-to-head pressure highlighted the political danger for a president who campaigned on reining in energy costs only to see them skyrocket amid the U.S. war on Iran. Fuel prices in the United States are at their highest seasonal level ever recorded, with gasoline now selling for more than $4 a gallon and diesel for nearly $6 a gallon on average nationwide, according to the American Automobile Association. In return, Trump received a rebuke over federal biofuel blending requirements, as some refinery executives used the hour-long meeting to argue that quotas forcing them to blend alternative fuels with gasoline are driving up prices at the pump, according to people familiar with the conversation who asked not to be identified because it was private. About a dozen executives from fuel refining and distribution companies joined Trump in the White House Cabinet Room for the discussion, followed by a quick visit to the Oval Office, some of the people said. They reflected a who’s who of the industry, with leaders from small independent fuel makers like Delek US Holdings Inc. along with representatives from large refiners including PBF Energy Inc., Marathon Petroleum Corp. and Valero Energy Corp. Energy Secretary Chris Wright and Interior Secretary Doug Burgum, who heads Trump’s National Energy Mastery Council, were at the session along with other officials. The meeting was dominated by conversations about the Renewable Fuels Standard, the federal law that requires refiners to blend corn-based ethanol, soy-based biodiesel and other alternative fuels into gasoline and diesel, the people said. Industry representatives criticized the administration’s decision to set record biofuel blending quotas, with some calling the targets unattainable and describing them as raising gasoline costs, some of the people said. Tensions over the issue rose after Trump’s Environmental Protection Agency on Monday granted a number of small refiners exemptions from some of those mandates. At the same time, in a blow to large refinery owners, the administration also said it would seek to ensure that other non-exempt facilities are forced to blend those exempt volumes instead. Related: Refineries get highest level of biofuel waivers since 2017 Renewable fuel quotas are a particularly thorny issue for Trump because they divide the agriculture and oil industries, two key sectors. Administration officials on Tuesday acknowledged the political dynamic by suggesting their hands were tied on the issue, some of the people said. Trump called the meeting as the Iran war continues to disrupt the flow of crude and refined oil products, fueling higher gasoline and diesel costs. It’s a pressing concern for Trump, who has struggled to allay concerns about voters’ pocketbooks ahead of elections to determine which party will control Congress for the next two years. While gas prices have fallen from this year’s high of more than $4.50 a gallon in May, they are still about $1 higher than they were at the start of the war on Feb. 28, let alone the $2.79 low Trump set in January. Trump says prices will eventually come down and that Americans understand his stated goal of preventing Iran from obtaining nuclear weapons. He told reporters on Monday that he couldn’t say with certainty that prices would drop before the election. The president is also seeking to unlock more crude flows from Venezuela, tapping a guaranteed share of production at the cost of North American Blue Energy Partners, a private company that has been granted 100-year concessions in 17 oil fields. Any increase in Venezuelan production would likely flow to US Gulf Coast refineries that are optimized to process the country’s particularly heavy crude, although significant increases in output are unlikely in the near term. At Tuesday’s meeting, refiners were asked how the United States can process more Venezuelan crude and how the administration can make it easier, people familiar with the conversation said. While some refiners are already importing volumes from Venezuela (particularly Valero and Chevron Corp.), taking on more will not make geographic sense for some facilities in the United States, industry representatives said. Participants also praised Trump for a Jones Act waiver that allows foreign ships to transport oil and other raw materials through the United States. Trump initially issued a broad waiver to ensure adequate fuel supplies and lower costs amid the war, but narrowed its scope in August. –With help from Cole Martin and Nathan Risser. 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