US President Donald Trump has announced a temporary 60-day waiver of the century-old Jones Act, aimed at reducing rising energy prices as global oil markets remain volatile due to rising tensions involving Iran.The decision allows foreign-flagged ships to transport fuel and other essential commodities between U.S. ports, a major change to long-standing domestic shipping rules.The White House said the waiver is intended to mitigate the economic impact of supply disruptions caused by the ongoing conflict in the Middle East. Press Secretary Carolyn Leavitt said the move would “minimize short-term disruptions to the oil market” and ensure critical resources like oil, natural gas, fertilizer and coal can move more freely through U.S. ports.The announcement comes as oil prices have risen sharply, disrupting supply chains due to the halt of shipping routes and instability at key global chokepoints.
What is the Jones Act?
The Jones Act, officially called the Merchant Marine Act of 1920, is a US federal law that regulates domestic maritime trade.Enacted after World War I, this law was designed to strengthen the American shipping industry after heavy losses from German submarine attacks.Under the Act, any goods transported between U.S. ports must be carried on ships that are:
- Made in USA
- Owned by US citizens
- Registered under the American flag
- Crewed primarily by Americans
The purpose of the law is to support national security and maintain a strong domestic shipping fleet. However, critics argue that it limits competition and increases transportation costs, especially for fuel and essential goods.
Why the discount now?
The temporary suspension comes as global energy supplies are disrupted due to geopolitical tensions in the Middle East, particularly the conflict involving Israel and Iran.A major flashpoint has been the Strait of Hormuz, through which a significant portion of the world’s oil supply passes. Disruptions in this sector have sharply increased crude oil prices, which has impacted global markets.In the US, petrol and diesel prices have risen sharply in recent weeks, increasing pressure on the administration to act quickly.By waiving the Jones Act, the government hopes to increase shipping flexibility, allowing foreign ships to carry fuel domestically and potentially reducing supply disruptions.The Jones Act waiver coincides with the US Treasury easing sanctions on Venezuelan state-owned oil company Petroleos de Venezuela SA (PDVSA), allowing US companies to resume business with the oil giant under some restrictions, as the Trump administration seeks to boost global crude supplies amid the Iran war.
Will it be less? fuel prices
Experts say the impact may be limited. While the waivers could improve logistics and ease transportation bottlenecks, fuel prices are influenced by the global crude market, refinery capacity and geopolitical risks. Any relief at the pump is likely to be temporary.Still, the move signals a broader effort by the Trump administration to stabilize energy markets as well as steps like easing oil-related sanctions and tapping strategic reserves.