President Donald Trump has invoked a Cold War-era law in an effort to boost oil production and lower energy prices.

In a presidential memorandum issued Thursday, Trump determined that petroleum production, refining, and related activities are essential to national defense under the 1950 Defense Production Act. The determination follows Trump’s declaration of a national energy emergency in January 2025.

“Ensuring resilient domestic petroleum production, refining, and logistics capacity is central to United States defense readiness,” the memo reads. “Without immediate Federal action, United States defense capabilities will remain vulnerable to disruption.”

The memo comes as the price of gas and diesel has soared across the country amid supply disruptions caused by the U.S. and Israel’s war against Iran. Brent crude futures rose 1.2% to $114.47 a barrel early Friday, extending gains after Thursday hit a five-month high. U.S. diesel pump prices averaged $6.32 a gallon, slightly higher than Thursday but below the September record, according to AAA. The high energy prices, and related inflation, have become a defining issue for voters in the coming midterm elections.

Here’s what to know.

What does the memo mean for energy production?

The memo means that energy production shortfalls are seen as a national defense risk.

The memo invokes Section 303 of the Defense Production Act, a law that allows the federal government to intervene in private industry for national defense. Section 303 allows the President to make purchases, purchase commitments, provide financial support and equipment, and expand production through other measures.

The memorandum also removes certain Section 303 requirements through an emergency waiver, including ordinary congressional notification and authorization constraints.

While the memo does not specify which projects could be funded, Vice President J.D. Vance said last week that the Administration would use the Defense Production Act to expand capacity at a Delek U.S. Holdings-owned refinery in Texas.

Without taking action, the memo said, U.S. industry would be unable to provide sufficient energy services in a “timely manner due to constrained financing, long lead times, permitting and infrastructure bottlenecks, and supply ​chain limitations.”

Has the Defense Production Act been invoked before?

Enacted during the Korean War, the Defense Production Act was first used to expand domestic industries in critical materials, such as aluminum and titanium, for national defense.

Section 303 of the act was also used during the pandemic to fund domestic production of medicines and vaccines. Former President Joe Biden also invoked the statute to support clean energy manufacturing and supply chains, including minerals used in electric vehicle batteries and the production of of energy-efficient heat pumps and insulation.

In April, more than a month after Iran began disrupting shipping through the Strait of Hormuz in retaliation for U.S.-Israeli Feb. 28 strikes, Trump invoked the act to declare petroleum, natural gas, coal, electricity grid, and other energy infrastructure essential to national defense. Citing April’s natural gas determination, the Department of Energy on Monday committed up to $42 million to advance the proposed Constitution Pipeline linking Pennsylvania and New York. The department also announced up to $50 million last week for transmission upgrades in Virginia and West Virginia, citing April’s grid determination.

Last year, Trump signed legislation providing $1 billion for Defense Production Act activities, including energy projects deemed critical to national security.

Trump’s use of Section 303 of the act for fossil fuel projects has drawn criticisms from environmentalists, with the Center for Biological Diversity calling the April memoranda, which waived congressional notification, “unlawful.” Nevertheless, the statute expressly includes energy production and construction in its definition of national defense.

How else has Trump tried to lower energy prices?

The Trump Administration has pursued a number of other measures aimed at lowering energy prices since the Iran War began. Earlier this month, Trump signed an executive order temporarily expanding access to tax-exempt dyed diesel, which is typically reserved for off-road farm and construction vehicles. The Group of 7 countries, including the U.S., also agreed to release 100 million barrels of diesel and crude oil reserves to the world over four months.

In August, the Administration extended the Jones Act waiver for another 90 days, allowing foreign-flagged ships to transport oil and certain other commodities between U.S. ports.

Trump also announced an agreement with Putin earlier this month to import diesel from Russia, alongside temporary sanctions relief. The deal has faced significant backlash from lawmakers.

For many of these measures, industry analysts and stakeholders have said the reduction in energy prices is likely to be limited and possibly short-lived. Analysts estimated that the Jones Act waiver was expected to reduce gasoline prices by only pennies per gallon. Capital Economics economist Hamad Hussain said the reserve release could lower diesel prices temporarily, but would not resolve the underlying supply crunch. And analysts warned that the dyed diesel measure would have a limited effect on most consumers since the tax-exempt fuel isn’t widely available at ordinary commercial pumps. A Council on Foreign Relations analysis also suggested that damaged Russian refining capacity may make a near-term effect of the Russia deal on diesel markets unlikely, although Trump said the agreement would supply more than 300,000 tons of diesel to U.S. and global markets immediately.

Meanwhile, oil exports from the Middle East topped prewar levels last week, marking a rebound in regional oil shipments despite continuing security risks. Ships sailing through the Strait of Hormuz, however, still face attacks from Iran, while the Bab el-Mandeb Strait near Yemen has been threatened by the Houthi rebels. Analysts previously told TIME in June that the risk of further attacks and damage to facilities could delay a full-scale recovery.

Thursday’s memorandum could support investment in fuel capacity, but it’s uncertain how quick or measurable an effect it will have on energy prices. Gas prices still depend heavily on globally traded crude, according to the U.S. Energy Information Administration, although they can be influenced by domestic refining and distribution conditions. The U.S. was the largest crude producer globally last year, averaging 13.6 million barrels of crude a day.

Analysts warned, after the April memorandum, that federal support would not necessarily translate into immediate price relief.

“Until the pipes are in the ground and the fuel is flowing or transported, it may not be able to be called a true structural shift,” Cyrus Brooks, director of marketing at energy research firm RBAC, wrote in April.

Still, Brooks said of the April action that federal recognition of energy as important to national security could support important infrastructure investment, potentially relieving a bottleneck in domestic fuel production, refining or transportation.

“Energy security seems to be the brightest neon sign flashing,” he wrote. “Not because it’s everything, but because nothing works without it.”

The U.S. and Israel are reportedly developing plans for major strikes on Iran after the U.S. midterm elections in November.

Citing people familiar with the deliberations, the New York Times reported on Wednesday that Defense Secretary Pete Hegseth discussed the possibility of renewed strikes on Iran with Israeli Prime Minister Benjamin Netanyahu in Israel this week. Possible targets of the strikes reportedly include Iran’s energy infrastructure, nuclear facilities, and missile and drone arsenal. TIME has reached out to the White House for comment.

U.S. officials have repeatedly asserted that the Iranian Islamic Revolutionary Guard Corps are teetering on the edge of collapse but are deliberately prolonging the war in an effort to meddle with Republican prospects in the midterm elections. Once the elections are over, President Donald Trump promised last month, the Iranian regime would quickly capitulate.

“I think the war is going to end immediately after the election,” Trump said. “They can’t hold out any longer.”

Renewed strikes could complicate that outlook.

Some officials have reportedly argued that resuming attacks for an intense but limited campaign would hasten Iran’s economic collapse, especially as the country has been squeezed by an ongoing U.S. blockade on Iranian ports and economic sanctions campaign. The officials hope the blow will make Iran more amenable to negotiations.

Trump has at times shared that view.

Last week, Trump told Newsmax he was considering additional military action in Iran, including a possible strike on Iran’s Pickaxe Mountain, a nuclear facility deep underground. His comments came amid reports that he was weighing deploying a 22,000 GBU-43/B Massive Ordnance Air Blast bomb, also known as the “mother of all bombs.”

The President added the war would end soon, be it through negotiation or escalation.

“Do I annihilate the Islamic Republic and do it quickly, never giving them a chance to kill and destroy people and countries again? Do I drive them into hell with no chance of survival and no hope of future greatness or generations?” he said in a speech to the United Nations General Assembly last month.

“But I believe we’ll make a deal,” he added, “right after the election.”

Will the U.S. renew strikes on Iran?

Intensified fighting between the Iran-aligned Houthi rebels and the Saudi and Yemeni governments has threatened to create a broader regional crisis that could be harder to disengage from. The State Department on Wednesday ordered nonemergency government employees and their families to leave Saudi Arabia amid escalating attacks by the Houthis on Saudi infrastructure.

Houthi attacks on Saudi airports and Aramco facilities, as well as their attempts to disrupt shipping through Bab El-Mandeb, which has become an important alternative to the Strait of Hormuz for energy trade, could prompt direct U.S. strikes in support of Saudi Arabia, analysts have said. Trump said earlier this month that the U.S. “may” join Saudi strikes on the Houthis, although that has yet to transpire.

Israel’s Oct. 27 election could also raise the stakes of additional military action. Netanyahu, whom Trump has endorsed, would remain in office until a new government is formed, even if his bloc loses the election, and his government would retain the authority to order strikes during that transition. But renewed strikes before the election, or after an electoral defeat, could invite scrutiny. “One ordered in the last weeks of a deadlocked campaign would be judged in Israel as politics as well as strategy,” Gregg Roman, executive director of the Middle East Forum, wrote in a September analysis.

Nevertheless, the forum assessed that a large-scale Israeli strike on Iranian territory, with or without U.S. participation, was probable before the end of the year. Analysts told the Times Netanyahu could use the prospect of joint strikes to form a unity government that could allow him to stay in power. 

“The larger constraint,” Roman argued, “is Washington.”

Trump has not yet approved the proposed strikes, the Times reported.

Trump has also called off plans to renew attacks on Iran before. He reportedly blocked an Israeli plan for a multi-day offensive against Iran earlier this month, and rejected five proposals for major operations against Iran or the Houthis in recent months.

The U.S. and Iran have not exchanged major fighting in recent weeks. The last reported U.S. strikes on Iran were on Sept. 8, even as Iranian attacks on commercial shipping have continued. Earlier this month, Trump ruled out attacking Iran before the midterms.

Read More: What Is the Status of the U.S.-Iran Peace Talks? Here's What Both Sides Are Saying

How might Iran respond to new strikes?

Tehran’s reluctance to make concessions to the U.S. appears to have strengthened, rather than weakened, over the course of the war. Iranian leaders reiterated this week that they will not directly negotiate with the U.S. unless Washington accedes to certain demands, which include ending its naval blockade and releasing frozen Iranian funds.

The initial U.S. and Israeli bombing campaign on Iran that began the war on Feb. 28, as well as June 2025 attacks during an earlier round of U.S.-Iran nuclear diplomacy, also hardened the Iranian view that the U.S. is not serious about negotiating. Iranian Foreign Minister Abbas Araghchi said in March that the previous disruptions of negotiating rounds had increased distrust in Washington.

Last month, the IRGC published an open letter appealing to American voters to “wrest control” from their government. In the letter, the IRGC said: “Despite all the hardships that our enemies impose on us, we will continue fighting, as we have done for the past 47 years.”

Both the U.S. and Iran appear to believe they hold enough leverage to achieve their goals, and those “dueling perceptions” have impeded progress towards a deal, according to an Oct. 1 analysis by the New York-based nonpartisan research organization The Soufan Center.

Iran’s key point of leverage is its blockade of the Strait of Hormuz, a narrow waterway vital to global energy trade. Iran’s militarization of the strait has disrupted global oil and liquefied natural gas supplies, leading to soaring energy prices and inflation.

Analysts previously told TIME that the higher prices are politically costly for Trump. In recent weeks, a growing number of Republicans have broken with Trump on Iran. The President has also seen his lowest approval ratings of his second term.

Iran’s ability to choke off regional oil exports, however, appears to be waning. Middle East oil exports topped prewar levels last week as shipping companies use alternative routes to bypass the Strait of Hormuz. HSBC Group Chief Executive Georges Elhedery also projected that Hormuz could be “redundant” in five years thanks to investment in alternative logistics routes.

Iranian officials told the Times that they are aware of the U.S. and Israel’s war planning and are developing their own tactics.

Earlier this week, IRGC spokesperson Hossein Mohebbi told the Tehran Times that “even a limited” attack from Washington would provoke a “serious energy crisis” for the world. Iranian Foreign Ministry spokesperson Esmail Baghaei said that an attack on Pickaxe Mountain would be met with a response “just as hard,” if not “stronger.”

And earlier this month, Iranian officials said Iran had prepared potential retaliatory operations that would depart from the U.S. and Israel’s assumptions. Security Chief Mohsen Rezaei told Press TV that Iran could respond to renewed attacks by targeting new targets, including U.S.-linked data centers and AI facilities in the Gulf, as well as subsea communications cables. Last month, Iran threatened to retaliate against any further U.S. attacks by targeting U.S. oil and gas assets in the Gulf.

Read More: ‘One of the World’s Most Critical Digital Bottlenecks’: How the Iran War Could Threaten Global Internet Access

In a post on Telegram on Sunday, Mahdi Mohammadi, a senior adviser to Iran’s negotiator Gen. Mohammad Bagher Ghalibaf, said, if the U.S. and Israel attack, “they may want to keep it short, but we will not allow it.”

He added on Wednesday: “The war will continue longer and across a wider geography than the enemy calculates.”

The world’s richest man has publicly backed a potential combination of SpaceX and Tesla in what could be the biggest merger in history.

On Tuesday, Elon Musk, the CEO and largest shareholder of both companies, said the electric vehicle maker and the rocket company had formed special committees at the request of shareholders to discuss the idea.

“I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, ​and there’s a lot to be gained from cooperating,” Musk told SpaceX investors on a conference call.

“I think it would be a good ​idea, but it’s really up to the special committees of both companies,” he added.

The committees, which are made up of independent directors, would need to agree on the transaction terms of any deal before putting it to shareholders for a vote. Musk said his conflict of interest prevents him from participating in their discussions.

Musk has previously teased a Tesla-SpaceX merger. On a July 22 earnings call, Musk said there was “more and more overlap” between Tesla and SpaceX as the companies expand into artificial intelligence and robotics. Last week, Barclays analysts suggested that a merger could be announced before Tesla’s annual shareholder meeting in December.

Tuesday’s call was the first confirmation that the companies were formally exploring a combination.

A merger could create a company worth around $3.5 trillion, putting it among the world’s most valuable companies. It could also become the biggest merger ever by deal value, potentially surpassing SpaceX’s record-setting $250 billion acquisition of Musk-owned AI company xAI in February. SpaceX is currently valued at about $2 trillion, and Tesla at $1.5 trillion. A deal could also help propel Musk back into trillionaire ranks, depending on its terms and how investors value the combined company. Musk owns around 48% of SpaceX and 20% of Tesla.

The shares of both companies rose in after-hours trading on Tuesday. SpaceX, which went public in June, reported a quarterly net profit of $4.4 billion. Musk told investors he expects annual recurring revenue of between $500 billion and $1 trillion by the end of 2027.

Some analysts, however, have warned of regulatory and geopolitical hurdles, particularly in terms of Tesla’s Chinese operations and SpaceX’s U.S. defence work. Morningstar analysts said a merger could raise U.S. national security concerns involving the combined company’s supply chain. JPMorgan analysts also flagged regulatory approval in China as a potential stumbling block.

Any deal could also face congressional scrutiny, which could intensify if Democrats win control of either chamber in the coming midterm elections. Democratic lawmakers have previously questioned Musk over conflicts of interest and raised national security concerns about reported Chinese investments in SpaceX. Democrats have also challenged major acquisitions in the past on consumer protection grounds. In June, Sen. Elizabeth Warren (D, Mass.) criticized SpaceX’s IPO, citing Musk’s concentrated voting power and weak investor protections—concerns that could resurface in a Tesla-SpaceX merger.

Why a merger matters

A merger could bring two of Musk’s biggest businesses under one corporate umbrella, making it easier for the companies to move investments and resources between projects. “This would allow him to run all their operations under one roof without tripping on as many governance issues,” wrote Morningstar analysts Seth Goldstein and Nicolas Owens in June. “For example, Musk could move Tesla software developers or engineers to work on SpaceX AI projects, and vice versa, or have Tesla and SpaceX supply one another without the need for related party transaction disclosures or risking shareholder lawsuits claiming the resources of one firm are being diverted for the benefit of the other.”

Analysts noted that Tesla’s robotaxis could benefit from Starlink connectivity, while its autonomous vehicles and Optimus humanoid robots could more closely integrate SpaceX’s AI technology. SpaceX’s planned orbital data centers, meanwhile, could potentially benefit from access to Tesla’s battery and energy storage products.

A combined company could also mean greater control of several stages of the AI value chain, from chip design and planned manufacturing to computing infrastructure, AI software, and its deployment in vehicles and robots.

The companies already collaborate. In March, they announced Terafab, a joint semiconductor manufacturing project intended to produce chips for Tesla’s vehicles and humanoid robots and SpaceX’s planned AI satellites. SpaceX technologies have also been used in some Tesla products, including the new Roadster prototype, which uses SpaceX-developed thrusters.

David Nicholson, chief technology advisor at market research firm The Futurum Group, told the BBC that a merger also appears to align with Musk’s long-held ambition of colonizing Mars. Musk previously outlined plans to send Tesla’s Optimus robots to the planet aboard SpaceX’s Starship spacecraft.

A merger could also strengthen Musk’s influence over Tesla’s direction. Barclays estimated that a SpaceX acquisition of Tesla could give Musk around 37% of the combined company while controlling around 56% of its voting power. He currently controls around 82% of voting power at SpaceX and 20% at Tesla. That could represent either a benefit or a risk for shareholders, as decision-making would become faster but have fewer checks.

“One thing I don’t think people talk enough about with SpaceX and Tesla as well: You do still have a huge amount of key-man risk here,” wrote Morningstar analyst David Sekera earlier this month. “God forbid anything were to happen to Elon Musk.”