NEW YORK (AP) — The Trump administration said Friday it would extend the waiver on a more than a century-old act known as the Jones Act for another 90 days as the war in Iran continues to upend energy markets and supply chains worldwide.
The Jones Act requires that goods hauled between U.S. ports be moved on U.S.-flagged vessels. Passed in 1920, this law aims to protect the American shipping sector — but it’s also faced criticism over the years for slowing the delivery of goods, including critical aid during time of crisis.
In March, the White House said that it would suspend Jones Act requirements for 60 days, in a measure that arrives amid wider efforts to counter steep oil prices and cargo disruptions due to the war. The Jones Act is often blamed for making gas, in particular, more expensive. Still, some analysts and industry groups say this waiver will do little to ease consumers’ fuel bills today.
In a post on social media site X on Friday, Taylor Rogers, White House assistant press secretary, said that President Donald Trump issued a 90-day extension to the Jones Act waiver.
Here’s what we know.
What is the Jones Act?
The Jones Act’s official name is the Merchant Marine Act of 1920. Congress passed the law — sponsored by Sen. Wesley Jones of Washington state — in an effort to rebuild U.S. shipping after German U-boats decimated America’s merchant flee during World War I.
Among other things, the Jones Act mandates that ships carrying cargo and passengers between U.S. ports must be built in the United States and owned by Americans — effectively prohibiting foreign-flagged ships from this domestic trade. The vessels are also required to carry U.S. crews.
The law can be waived in the “interest of national defense,” the U.S. Maritime Administration notes, either through the Homeland Security or Defense Department.
The Jones Act also was intended to ensure that the U.S. had its own merchant fleet in case of war. It’s been strongly supported by some U.S. shipping companies, national security advocates and organized labor. But cutting out foreign competition has also driven up the cost of carrying cargo domestically.
U.S.-flagged ships are generally more expensive to both operate and build than foreign ones. And those costs are especially damaging to states and territories that are supplied by sea, such as Hawaii and Puerto Rico.
Why is Trump waiving Jones Act requirements again?
Oil prices have spiked and swung rapidly since the start of the Iran war. Nearly all tanker movement in the key Strait of Hormuzremains at a halt, which has led major oil producers across the Middle East to cut production. Commercial ships — which, beyond fuel, haul cargo from pharmaceuticals to computer chips — have also been stalled at sea or faced attacks themselves.
That’s pushing up prices for businesses and consumers worldwide.
The price for a barrel of Brent crude, the international standard, to be delivered in June, swung between roughly $103 and $107 in the morning and most recently was down less than 0.1% at $105.04. That’s up from roughly $70 before the war began. The price for Brent delivered in July, which is where more of the trading is happening in the market, fell 0.4% to $98.96.
U.S. drivers have already seen prices at the pump jump dramatically — with the national average for regular gasoline raching $4.06 a gallon Friday, per AAA, up about $1.08 from before the war.
Rogers of the White House said Friday that “new data compiled since the initial waiver was issued revealed that significantly more supply was able to reach U.S. ports faster.”
How could extending the waiver impact gas prices?
A number of factors contribute to prices at the pump. And many note that opening up domestic shipping routes isn’t a sweeping fix.
The Center for American Progress estimated in March that waiving the Jones Act would decrease East Coast gas prices by a modest 3 cents, but potentially raising costs on the Gulf Coast. And the move “would also sideline American shipbuilders and workers and allow the oil industry to continue to profit from high prices while reducing transport costs,” the research and policy think tank said.
The U.S. is looking for additional ways to boost oil supply. Also in March, the Treasury Department eased sanctions to allow U.S. companies to do business with Venezuela’s state-owned oil and gas company. And the Trump administration has announced it will temporarily free up Russian oil from U.S. sanctions, too.
The International Energy Agency also pledged to release 400 million barrels of oil available from its member nations’ stockpiles, the largest volume of emergency oil pulled in the organization’s history. Trump, who previously downplayed the need to tap into reserve oil, confirmed that the U.S. would pull 172 million barrels from its Strategic Petroleum Reserve over 120 days as part of the IEA’s effort.
Still, analysts maintain this will be a short-term bridge. Refineries also buy crude oil in advance, and it takes time for new supply to trickle down to consumers. And, of course, it’s possible the pain of higher prices could increase further if the war drags on.
The U.S. is a net exporter of oil, but that doesn’t mean it’s immune to global spikes. Oil is a commodity traded globally. And most of what the U.S. produces is light, sweet crude, but refineries on the East and West coasts are primarily designed to process heavier, sour product. As a result, it also needs imports.
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AP Writers Seung Min Kim, Paul Wiseman and Collin Binkley in Washington contributed to this report.
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