BY MIRABEL ODETA
President Donald Trump on Tuesday unveiled plans to build a new oil refinery on the southern U.S. border, backed by India’s Reliance Industries, the operator of the world’s largest refining complex. The announcement comes as American drivers contend with spiking gasoline prices following the outbreak of the U.S.-Israeli conflict with Iran, and as both Republicans and Democrats gear up for midterm elections that could shape control of Congress for the remainder of Trump’s presidency.
“Thank you to our partners in India, and their largest privately held Energy Company, Reliance, for this tremendous investment,” Trump posted on the social media platform Truth Social.
The proposed refinery, with a capacity of 168,000 barrels per day, will be located at the port of Brownsville and is projected to offset $300 billion in the U.S. trade deficit with India, according to a statement from startup America First Refining. Reliance Industries has signed a binding 20-year offtake agreement with the company, agreeing to purchase the products the refinery produces.
“For the first time in half a century, the United States will build a new refinery designed specifically for American shale oil,” said John V. Calce, chairman and founder of America First Refining. Many existing Gulf Coast refineries, built in the last 40 years, were configured to process heavier, sour crude rather than the light, sweet crude extracted from U.S. shale fields.
America First said that a “global supermajor” has committed a nine-figure investment at a ten-figure valuation, naming Reliance as the investor. The project is slated to break ground in the second quarter of this year.
Despite the announcement, industry analysts questioned the need for a new refinery along the Gulf Coast, which is already home to eight of the country’s ten largest facilities. “Initial announcements like this by the Trump administration have a lot of hyperbole,” said John Auers, managing director of Refined Fuels Analytics.
Trump, however, framed the refinery as a multifaceted win for the U.S., claiming it will “fuel U.S. markets, strengthen our national security, boost American energy production, deliver billions of dollars in economic impact, and will be the cleanest refinery in the world.”
Experts noted that the refinery’s location in Brownsville suggests a focus on exports, rather than serving local markets. “There is not much local demand and there are not pipeline connections to take Brownsville product elsewhere,” said Tom Kloza, principal analyst at Kloza Advisors. U.S. refineries are major suppliers of motor fuel and heating oil to South America and benefit from lower domestic costs for crude oil, natural gas, and hydrogen.
Reliance Industries, headquartered in India, operates the 1.4 million barrels-per-day Jamnagar complex, the largest refining facility in the world. The company reported $125 billion in revenue last year and has diversified operations in retail, digital services, media, entertainment, and new energy.
Recent closures in California, including two refineries totaling 284,000 barrels per day, have been attributed to strict state fossil fuel regulations, highlighting potential supply gaps in the U.S. The average cost to construct new refineries or expand existing ones over the past decade has been roughly $40,000 per barrel of capacity, putting the Brownsville project at an estimated $6.7 billion.
U.S. refining capacity stood at 18.4 million barrels per day at the end of 2024, according to the U.S. Energy Information Administration, and analysts expect it to gradually increase through the 2030s. While the Brownsville refinery faces scrutiny from industry observers, Trump and his allies frame it as a strategic move to strengthen energy independence, reduce trade deficits, and meet rising domestic and international demand for refined fuels.
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