U.S. President Donald Trump is considering extending the two-month waiver of the Jones Act to ease fuel prices that have spiked following the war in Iran, Axios reported on Wednesday, citing U.S. officials.
The Merchant Marine Act of 1920, also known as the Jones Act, requires that no vessel may transport any merchandise by water, by land and water, or via a foreign port, for any part of the transportation, between points in the United States, unless the vessel is U.S.-built, U.S.-owned, and coastwise endorsed by the U.S. Coast Guard.
However, as oil and gasoline prices spiked last month due to the Middle East crisis and the de facto closure of the Strait of Hormuz, President Trump on March 18 issued a 60-day waiver of the Jones Act.
The move “is just another step to mitigate the short-term disruptions to the oil market as the U.S. military continues meeting the objectives of Operation Epic Fury,” White House Press Secretary Karoline Leavitt said, referring to the U.S. operations in Iran.
“This action will allow vital resources like oil, natural gas, fertilizer, and coal to flow freely to U.S. ports for sixty days, and the Administration remains committed to continuing to strengthen our critical supply chains,” the White House said last month.
The U.S. Administration is now mulling extending the waiver beyond the original waiver expiry date in mid-May.
Administration officials have been in talks with industry, seeking clarity about a possible further extension, anonymous sources with knowledge of the matter told Bloomberg on Wednesday.
So far, the waiver has had minimal impact on lowering oil prices, as global supply disruptions and rising crude costs outweigh any domestic shipping relief.
Yet, since the waiver was issued, as many as 40 tankers have been able to deliver oil between U.S. ports, boosting the available fleet by 70% and helping to reduce costs, per data provided to Axios by the White House.
By Tsvetana Paraskova for Oilprice.com
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