President Donald Trump announced Tuesday that India’s Reliance Industries — operator of the world’s largest single-site refining complex — will back construction of a new 168,000 barrels per day (bpd) refinery at the Port of Brownsville, Texas, designed specifically to process light, sweet U.S. shale crude.

The project, led by startup America First Refining, aims to address a perceived mismatch between domestic production and Gulf Coast refining capabilities while reducing the U.S. trade deficit with India.

“Thank you to our partners in India, and their largest privately held Energy Company, Reliance, for this tremendous Investment,” Trump posted on Truth Social.

The announcement comes amid spiking gasoline prices driven by the ongoing U.S.-Israeli conflict with Iran, now in its second week, and as midterm elections approach in November 2026, with control of Congress hanging in the balance.

America First Refining stated the refinery will “offset $300 billion in the trade deficit with India” through long-term product offtake and economic impact. Reliance has signed a binding 20-year offtake term sheet committing to purchase the refinery’s output, a move that could help narrow India’s trade surplus with the U.S. — a persistent grievance for Trump.

Reliance, which did not respond to requests for comment, operates the 1.4 million bpd Jamnagar complex in Gujarat — the world’s largest single-location refinery — and reported $125 billion in revenue last year. The company has aggressively expanded into new energy, retail, digital services, and media while maintaining its core refining and petrochemical strength.

America First founder and chairman John V. Calce said: “For the first time in half a century, the United States will build a new refinery designed specifically for American shale oil.”

Many Gulf Coast facilities, configured over the past four decades to run lower-cost heavy, sour crude from imports, struggle to efficiently process the light, sweet crude produced from U.S. shale plays. The Brownsville refinery would fill that gap, targeting domestic shale feedstocks.

A “global supermajor” has made a “9-figure investment” at a “10-figure valuation,” America First said, identifying Reliance as the partner.

Construction is slated to break ground in Q2 2026.

Industry Skepticism on Need and Timing

Analysts expressed caution about some aspects of the deal. John Auers, managing director at Refined Fuels Analytics, said that “Initial announcements like this by the Trump administration have a lot of hyperbole.” He questioned the necessity of new Gulf Coast capacity, noting the region already hosts eight of the country’s 10 largest refineries, with total U.S. capacity at 18.4 million bpd at the end of 2024.

Tom Kloza, principal analyst at Kloza Advisors, suggested the Brownsville location points to an export-oriented facility.

“If Brownsville is indeed the location for the build, I would assume that they are looking at an export refinery. There is not much local demand and there are not pipeline connections to take Brownsville product elsewhere,” he said.

He noted Gulf Coast refineries benefit from low-cost natural gas, hydrogen, and domestic crude, making them competitive suppliers of motor fuel and heating oil to South America. Recent closures of two California refineries (combined 284,000 bpd) due to state fossil-fuel regulations have tightened West Coast supply, but Gulf Coast capacity remains robust. Construction costs for new refineries or expansions have averaged ~$40,000 per barrel of capacity in the past decade, implying a ~$6.7 billion price tag for the Brownsville project.

Geopolitical and Economic Backdrop

The announcement arrives amid volatile oil markets driven by the U.S.-Israeli war with Iran. Brent crude traded above $104 per barrel on Monday, with the Strait of Hormuz effectively closed after Iranian threats. India — importing 85% of its crude (4.2 million bpd) — faces higher import costs and rupee pressure, while U.S. gasoline prices have spiked, contributing to inflation concerns ahead of midterms.

The refinery deal aligns with Trump’s “America First” agenda: boosting domestic energy production, reducing trade deficits, and creating jobs in Texas. Reliance’s offtake commitment could help stabilize U.S. exports while giving India a reliable long-term source of refined products less exposed to Middle East disruptions.

While the project promises economic benefits, analysts remain skeptical about execution and the needs. Permitting, environmental reviews, pipeline connectivity, and securing financing in a high-interest-rate environment will be key hurdles. The 168,000 bpd capacity, modest compared to modern complexes, suggests a focused, export-oriented design.

The refinery could process light shale crude more efficiently than legacy Gulf Coast plants, potentially improving U.S. energy security and export competitiveness. For Reliance, it diversifies its refining footprint beyond Jamnagar and strengthens ties with the U.S. to tackle future global energy volatility.

Oracle delivered a strong signal that the global boom in artificial intelligence infrastructure is translating into real business momentum, after reporting a massive surge in future contracted revenue and forecasting sales growth that could exceed Wall Street expectations through 2027.

The enterprise software giant said demand for AI computing capacity is accelerating rapidly as technology companies race to build and deploy generative AI systems. The surge in demand is helping to justify Oracle’s aggressive and debt-funded expansion into large-scale data centers designed specifically for AI workloads.

Investors reacted positively to the outlook, sending Oracle’s shares up about 8.3% in extended trading following the earnings announcement.

At the center of the optimism is the company’s remaining performance obligations (RPO), a key metric that measures the value of contracted revenue yet to be recognized. Oracle said RPO jumped 325% year-on-year to $553 billion in its third quarter. That figure surpassed analysts’ estimates of about $540.37 billion compiled by Visible Alpha and rose sharply from $523 billion reported in the previous quarter.

The scale of the backlog suggests Oracle has already secured long-term commitments from customers that will drive revenue growth for years. Executives said most of the surge in RPO is tied to large AI computing agreements involving companies building and operating advanced AI systems.

These contracts typically involve long-term commitments to rent large volumes of computing capacity from Oracle’s expanding network of data centers. Among the companies relying on Oracle’s infrastructure are leading AI developers, including OpenAI and major technology platforms such as Meta, both of which require enormous computing power to train and operate increasingly sophisticated AI models.

Oracle has been pouring billions of dollars into building and expanding data centers capable of hosting high-performance AI workloads. The strategy marks a significant shift for a company historically known for its enterprise database software.

Over the past several years, Oracle has repositioned itself as a cloud infrastructure provider, competing directly with hyperscale cloud platforms operated by Amazon through its AWS division and Microsoft through Azure. While those rivals dominate the cloud computing market, Oracle is attempting to carve out a niche by offering infrastructure optimized for large-scale AI training and inference workloads.

Industry analysts say the company’s growing backlog suggests the strategy is beginning to gain traction.

“Oracle’s quarter is a beat and a stress test result for the AI trade,” said Jacob Bourne, an analyst at eMarketer. “As the most debt-exposed major player in AI infrastructure, Oracle is the canary in the coal mine and this report suggests there’s underlying health in AI spending beyond the hype.”

Oracle’s heavy borrowing to finance new data centers has been a point of concern for investors. Building AI infrastructure requires enormous capital expenditures for facilities, power systems, and advanced chips.

However, the company said the large AI contracts already secured mean it does not expect to raise additional funds to support its current infrastructure expansion. That assurance helped calm fears that Oracle’s investment cycle might strain its balance sheet before generating meaningful returns.

The company also lifted its long-term financial outlook.

Oracle now expects revenue to reach $90 billion by fiscal 2027, well above analysts’ forecasts of $86.6 billion compiled by LSEG.

Executives believe demand for AI infrastructure will continue to expand as enterprises adopt generative AI technologies across industries ranging from finance and healthcare to manufacturing and retail.

On a call with investors, Oracle executive Clay Magouyrk said profitability in the company’s cloud business should improve significantly as AI infrastructure scales. Magouyrk explained that renting out high-performance chips supplied by partners such as Nvidia is expected to generate margins of around 30% to 40%.

But he noted that a significant portion of customer spending goes beyond raw computing capacity.

Between 10% and 20% of cloud customers’ spending typically flows into additional Oracle services, including the company’s core database products. Those offerings generate much higher profit margins, often ranging between 60% and 80%.

“When you combine all of these pieces together, the overall margin profile of Oracle Cloud Infrastructure continues to strengthen and grows rapidly,” Magouyrk said.

Oracle’s broader strategy also pinpoints the growing influence of artificial intelligence in software development itself.

On the earnings call, Oracle co-founder and executive chairman Larry Ellison addressed rising speculation that AI coding tools could reduce demand for traditional software vendors by allowing companies to generate their own applications.

Ellison argued that the opposite could happen for Oracle.

He said the company is embracing AI coding tools internally to enable smaller engineering teams to build sophisticated new applications more quickly.

“Thank God we have these coding tools now that allow us to build a comprehensive set of software — agent-based software to automate a complete ecosystem like healthcare, or financial services,” Ellison said.

“That’s why we think the ‘SaaS apocalypse’ applies to others but not to Oracle.”

The remarks highlight a broader shift taking place across the technology industry, where AI is not only creating demand for massive computing infrastructure but also reshaping how software itself is built and deployed.

Oracle’s financial results for the quarter also exceeded expectations.

The company reported revenue of $17.19 billion for the third quarter ended February 28, topping analysts’ average estimate of $16.91 billion.

Looking ahead to the current fiscal fourth quarter, Oracle forecast adjusted earnings between $1.96 and $2.00 per share, slightly above analysts’ expectations of $1.94. The company expects overall revenue growth of 19% to 21% in the fourth quarter, broadly consistent with analysts’ forecasts of about 20.2% growth to approximately $19.12 billion. Cloud revenue is expected to grow even faster. Oracle projected cloud sales growth of between 46% and 50%, close to analyst expectations of about 48% growth to nearly $9.98 billion.

The strong projections reinforce the idea that the infrastructure supporting generative AI is becoming one of the most powerful growth engines in the global technology industry.

As corporations and governments race to develop AI systems capable of automating tasks, generating content, and analyzing vast datasets, demand for the computing resources needed to run those models is exploding.

The latest results point to Oracle’s high-stakes gamble — investing billions to become a major provider of AI computing infrastructure — is beginning to deliver tangible financial returns. The company is expected to emerge as one of the most important infrastructure providers in the AI economy if the surge in spending continues.