First new US refinery in 50 years to be backed by Indian firm Reliance

The United States is set to get a new oil refinery roughly 50 years after the last one was built. Indian company Reliance Industries will provide financial backing for the project by US company America First Refining (AFR), US President Donald Trump announced in a post on his social media platform. Reliance Industries is India’s largest private energy company and operates the world’s largest refining complex.

The new refinery, with a processing capacity of 168.000 barrels per day, will be located in Texas and, according to Trump, will be the cleanest refinery in the world. It will process only US shale oil. The facility will strengthen national security, boost US energy production and bring billions of dollars to the economy, Trump said.

Billionaire Mukesh Ambani’s Reliance has also signed a binding 20-year offtake agreement with AFR, meaning it will buy products from the refinery. This should help reduce India’s trade surplus with the US, which Trump has criticised, Reuters reported.

Trump described the project as an investment with a potential value of up to USD 300 billion (CZK 6.3 trillion). AFR clarified that the figure is based on the refinery buying and processing 1.2 billion barrels of shale oil worth USD 125 billion over the 20-year agreement and producing 50 billion gallons (more than 189 billion litres) of refined products with an estimated value of USD 175 billion. This would improve the US trade balance by USD 300 billion. Construction itself is expected to cost USD 4 billion.

The refinery announcement coincides with rising global oil prices amid an escalation of the conflict in the Middle East. Since the start of the current war, launched by the United States and Israel with an attack on Iran on the last day of February, oil prices have been volatile. On Monday, Brent crude rose to nearly USD 120 per barrel; this morning it is below USD 90. The United States is also preparing for elections that could determine which party controls Congress during the final two years of Trump’s term.

AFR President Trey Griggs said the United States has a surplus of light shale oil but lacks the refining capacity to process it. The refinery would strengthen the domestic supply chain, he said. Construction is expected to begin in the second quarter of this year.

Many refineries on the Gulf Coast are unable to process light oil from shale fields. Over the past 40 years, they have been configured to process cheaper heavy crude, which is denser and contains more sulphur. Analysts are sceptical, however, about the need for a new refinery on the Gulf Coast, where eight of the 10 largest refineries in the US are already located.

Tom Kloza, an analyst at Kloza Advisors, noted, however, that the new refinery could have advantages over other plants elsewhere in the US because it could be geared towards exports. The refinery will be built near the Port of Brownsville. “Local demand is not very high, and there is no pipeline link to transport products from Brownsville elsewhere,” he said. US refineries are major suppliers of motor fuels and heating oil to South America.

Since the end of 2025, two California refineries with a combined capacity of 284.000 barrels per day have been permanently shut down due to state regulations on fossil fuels. According to data from the US government’s Energy Information Administration (EIA), US refinery capacity stood at 18.4 million barrels per day at the end of 2024. Analysts expect it to gradually increase by 2030.