The Trump administration is considering a temporary waiver of the Jones Act to enable the smooth transit of energy and agricultural shipments between U.S. ports, Reuters reported on Thursday, citing a statement by Press Secretary Karoline Leavitt.
The decision is yet to be finalized, according to the report.
Besides supply disruptions, this move aims to address the surge in fuel prices triggered by the U.S.–Israeli war with Iran. The temporary waiver would permit foreign vessels to transport fuel between U.S. ports, potentially reducing shipping costs and accelerating deliveries.
However, seven maritime labor unions have criticized the proposal, arguing that gasoline prices are primarily driven by crude oil prices, not shipping costs, reported the publication.
White House did not immediately respond to Benzinga‘s request for comment.
What Is The Jones Act?
The Jones Act, formally known as the Merchant Marine Act of 1920, is a law that has been in place for a century. It stipulates that goods transported between U.S. ports must be carried on ships that are U.S.-built, U.S.-flagged, and predominantly U.S.-owned. The Act aims to sustain a strong domestic shipping industry and safeguard national security in maritime transportation.
Though this Act significantly limits the number of tankers available for domestic shipments, it is strongly supported by maritime labor unions.
Oil Outlook Splits As War Lifts Prices
This move comes in the wake of the Trump administration’s temporary authorization for countries to purchase Russian oil “stranded at sea,” to stabilize global energy markets as tensions from the Iran-U.S. war pushed crude prices higher.
Investor Kevin O’Leary had warned that persistently high oil prices could drive gasoline costs higher for Americans and make energy the defining economic issue for the GOP in the upcoming midterm elections.
On the other hand, BlackRock Inc. (NYSE:BLK) CEO Larry Fink predicted a potential drop in oil prices, possibly even below pre-war levels, once the conflict ends and if “neutralized” Iran re-enters the global market.
When last checked, WTI crude oil is trading 1.16% higher at $96.66 per barrel. At the same time, national gasoline prices on average, as per the American Automobile Association, were $3.63 per gallon.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
Image via Shutterstock
Recent Comments