President Donald Trump has temporarily waived a century-old shipping law to ease the cost of transporting oil, gas and other goods within the United States.
The move will allow foreign-flagged vessels to transport goods between U.S. ports for the next 60 days, a measure taken to ease the movement of energy supplies across the country.
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“This action will allow critical resources such as oil, natural gas, fertilizer, and coal to flow freely into U.S. ports for 60 days,” White House press secretary Caroline Leavitt wrote in X.
Here’s what we know:
What is the Jones Act?
The Jones Act, officially known as the Merchant Marine Act of 1920, was passed by Congress to rebuild the U.S. shipping industry after German U-boats decimated the U.S. merchant marine fleet during World War I. The legislation was sponsored by Sen. Wesley Jones of Washington.
The core of this law requires that all vessels transporting goods and passengers between U.S. ports must be built in the United States, owned by U.S. citizens, and crewed primarily by Americans. This effectively prevents foreign-flagged vessels from participating in domestic maritime trade.
According to the U.S. Maritime Administration, the law allows for temporary waivers in the “interest of national defense,” typically granted by the Department of Homeland Security or the Department of Defense.
The Jones Act was also enacted to allow the United States to rely on its merchant navy during wartime. It continues to receive strong support from some shipping companies, labor unions and national security activists.
But critics argue that limiting foreign competition is driving up transportation costs.
Why is President Trump waiving the Jones Act requirements now?
The oil market has remained volatile since the start of the war against Iran between the United States and Israel. Tanker traffic through the Strait of Hormuz, a key global chokepoint, has been severely disrupted, impacting exports from the Middle East’s major producing countries. Merchant ships carrying everything from fuel to medicine to computer chips have also been delayed or attacked.
The disruption caused prices to rise around the world. Brent crude, the world benchmark, was trading at nearly $109 a barrel Wednesday, up from about $70 before the war. U.S. crude oil rose to about $98 per barrel. Prices have soared, with the national average for regular gasoline reaching $3.84 a gallon, about 86 cents, or more than 25 percent, above prewar levels, according to the American Automobile Association.
With supplies tight and transportation routes disrupted, countries are scrambling for alternatives.
By allowing foreign-flagged vessels to transport energy products between U.S. ports, the administration hopes to reduce transportation costs and increase supply. The exemption also applies to fertilizers, which are in high demand during the current spring planting season.
However, the decision has drawn criticism. The American Maritime Partnership, a coalition representing U.S. ship owners, operators and maritime unions, said it was “deeply concerned” that the 60-day exemption could be abused to displace American workers and businesses.
The group also argued that the measure would do little to lower fuel prices for consumers.
How might the suspension of Jones Act requirements affect U.S. gasoline prices?
Fuel prices are influenced by a variety of factors, and analysts say easing domestic transport restrictions is unlikely to be a drastic solution.
“The exemption simplifies the logistics and makes it a little cheaper and easier to distribute the product,” said Patrick de Haan, head of oil analysis at GasBuddy, an app that tracks fuel costs.
But De Haan cautioned not to expect prices to plummet from the exemption.
“Currently, lower pump prices have no ‘measurable’ impact; they only offset retail price increases. My guess is that they could offset a 3 to 10 cent per gallon ($0.007 to $0.02 per liter) price increase.”
The exemption is part of a broader effort by the Washington government to increase supply. The Treasury Department eased sanctions, allowing U.S. companies to do business with Venezuela’s state oil company, while temporarily opening the door for Russian oil to re-enter global markets.
At the same time, the International Energy Agency (IEA) has committed to releasing 400 million barrels of oil from its emergency stockpile, the largest coordinated release in the agency’s history, and the United States is contributing 172 million barrels from the Strategic Petroleum Reserve.
Still, analysts say such measures will only provide short-term relief. Oil markets remain constrained by global supply disruptions, and additional crude oil may take time to reach refineries and reach consumers.
