President Donald Trump has authorized a temporary suspension of a long-standing US shipping requirement in an effort to reduce the cost of transporting oil, gas, and other energy commodities domestically as prices surge amid the conflict with Iran, reports Baltimore Chronicle with a link to the original Bloomberg report.
The decision allows foreign-flagged vessels to transport specific goods between US ports for a period of 60 days. The move temporarily lifts restrictions imposed by the Jones Act, a 1920 law requiring that cargo shipped between US ports be carried on vessels that are American-built, owned, and flagged. The administration framed the measure as a necessary step to stabilize supply chains tied to national security and to prevent potential shortages that could affect military logistics.
White House Press Secretary Karoline Leavitt stated that the waiver is intended to address short-term disruptions in the oil market while US military operations under Operation Epic Fury continue. She added that the administration remains focused on strengthening critical supply chains during the ongoing crisis.
Under the temporary exemption, foreign ships will be permitted to carry a broad range of commodities, including crude oil, refined petroleum products, natural gas, natural gas liquids, coal, fertilizers, and other derivatives tied to energy production. Officials indicated that the authorization covers materials essential for both civilian consumption and military operations.
Despite the policy shift, analysts suggest the overall impact may be limited due to the scale of the global supply shock. The International Energy Agency has described the current disruption as the largest in the history of the global oil market. The conflict has effectively shut down the Strait of Hormuz, a key transit route responsible for approximately 15 million barrels of oil per day, triggering volatility across global financial markets.
Oil prices reacted sharply, with Brent crude reaching as high as $109 per barrel during trading in New York as concerns over escalation intensified. The temporary easing of shipping restrictions is expected to lower domestic transportation costs by allowing cheaper foreign tankers to operate within US routes, particularly between the Gulf Coast and the East Coast.
The measure is likely to reduce the cost of moving crude oil to refineries and delivering gasoline and diesel to densely populated regions in the northeastern United States. Previous estimates from JPMorgan Chase & Co. suggest that waiving the Jones Act could lower gasoline prices by approximately 10 cents per gallon for consumers on the East Coast.
Market participants have long argued that the Jones Act increases domestic shipping costs, limiting the efficient distribution of fuel. Industry analysts note that the law has historically made it more economical to export certain petroleum products rather than transport them between US ports.
The waiver may also affect agricultural inputs, including nitrogen-based fertilizers transported along the Mississippi River. However, some experts caution that the timing may limit its impact on the current planting season.
The policy comes amid mounting political pressure on the administration to address rising fuel costs, which remain a significant factor in public perceptions of inflation and economic conditions. The surge in oil prices poses risks ahead of the upcoming midterm elections, where economic concerns are expected to play a central role.
In parallel, the administration has outlined additional measures aimed at stabilizing energy markets, including the planned release of 172 million barrels from the US Strategic Petroleum Reserve as part of a broader global effort totaling 400 million barrels. It has also eased certain restrictions on Russian crude sales and proposed deploying the US Navy to escort tankers through the Strait of Hormuz, alongside a reinsurance initiative intended to reduce shipping costs.
The Jones Act waiver follows similar actions by previous administrations during periods of supply disruption. In 2022, former President Joe Biden issued a temporary waiver to facilitate fuel deliveries to Puerto Rico after Hurricane Fiona.
While the current measure has received support from segments of the energy industry, it remains controversial among US shipbuilders and their allies in Congress, who argue that even temporary exemptions undermine the law’s purpose of supporting the domestic maritime sector. Administration officials emphasized that the waiver is temporary and will not affect long-term US shipbuilding interests.
Officials also stressed that the waiver is designed to ensure uninterrupted delivery of energy supplies to US military installations and bases, reducing the risk of shortages that could disrupt ongoing operations.
Earlier we wrote that Trump warns NATO over Strait of Hormuz crisis and urges China to join mission to secure global oil shipping route