President Donald Trump has temporarily waived the Jones Act for 60 days to counter surging energy prices caused by the Iran war, suspending a law that requires cargo shipments between U.S. ports to be carried only on American vessels.
According to Bloomberg on the 18th (local time), Trump authorized foreign-flagged ships to transport crude oil, natural gas, petroleum products, coal, and fertilizer between U.S. ports for the next 60 days. Enacted in 1920, the Jones Act mandates that cargo transported between American ports must be carried on vessels that are U.S.-flagged, U.S.-built, and U.S.-owned.
White House Press Secretary Karoline Leavitt said in a statement, "President Trump's 60-day Jones Act waiver is a measure to mitigate short-term oil market disruptions while U.S. forces carry out Operation Epic Fury objectives." She added, "The administration will continue to commit to strengthening critical supply chains."
The measure comes as the Strait of Hormuz has been effectively closed due to the Iran war, blocking approximately 15 million barrels of crude oil. The International Energy Agency (IEA) has called this "the largest supply disruption in global oil market history." Brent crude surged to around $110 per barrel as tensions between the U.S. and Iran escalated.
The ultimate goal is to lower gas prices. JP Morgan Chase estimated that a Jones Act waiver in 2022 could save East Coast drivers about 10 cents per gallon. James Lucier, managing director at Capital Alpha Partners, pointed out, "Because of the Jones Act, cheap gasoline that should go from Houston to New York ends up going to Mexico."
However, concerns remain that the waiver's impact may be limited. Alex Jacquez, policy director at research organization Groundwork Collaborative, countered that the Jones Act's "impact on retail gasoline prices is less than 2 cents per gallon," calling it "negligible."
The Trump administration is introducing various policies to control skyrocketing oil prices. It has already announced plans to release 172 million barrels from the Strategic Petroleum Reserve and permitted sales of Russian crude oil in transit at sea. The administration also promised Navy escorts for tankers in the Strait of Hormuz and a reinsurance program, though specific details have not been disclosed.
The American Maritime Partnership (AMP), representing U.S.-flagged vessel owners, pushed back against the temporary waiver. "We are deeply concerned that this broad 60-day waiver will be abused to unnecessarily displace American workers and businesses," the group stated. "This waiver exists only to respond to immediate threats to military operations."