Amid rising oil prices as the conflict with Iran continues to escalate, the Trump administration is considering suspending a key maritime law that requires US ships to be used for transportation between US ports.“In the interest of national defense, the White House is considering waiving the Jones Act for a limited period of time to allow critical energy products and agricultural needs to flow unhindered to U.S. ports,” White House Press Secretary Carolyn Leavitt said in a statement, quoted by Bloomberg. But clarifying that, “This action has not been finalized.”
The proposal comes as Donald Trump is taking a series of measures to address the sharp rise in crude oil and gasoline prices following the ongoing conflict with Iran.In the latest on oil prices, crude oil rose sharply on Thursday after Iran’s Supreme Leader Mojtaba Khamenei pledged “revenge” following attacks by the United States and Israel, while the Islamic Revolutionary Guard Corps (IRGC) warned that the strategic Strait of Hormuz would remain closed.At around 1450 GMT, international benchmark Brent crude rose 9.46 percent to $100.68 a barrel, briefly surpassing the $100 level earlier in the trading session.On Wednesday, the administration said it would release 172 million barrels of crude from the Strategic Petroleum Reserve to help ease supply pressure. The move is part of a broader coordinated effort in which several countries are planning to release about 400 million barrels of oil from their reserves under the International Energy Agency (IEA).Also read: ‘We make a lot of money’- Trump on rising oil prices amid US-Iran war
What is the Jones Act?
The Merchant Marine Act of 1920 (Jones Act), commonly known as the Jones Act, is a US federal law that regulates domestic shipping and maritime commerce. It requires that ships transporting goods between U.S. ports be built, owned and registered in the United States, and operated by crew who are U.S. citizens or permanent residents.This legislation was introduced to protect and maintain a strong American maritime industry and shipping fleet. As it stands, the White House is considering temporarily waiving the Jones Act to help deal with rising oil and fuel prices. The suspension would allow foreign-flagged vessels to transport oil between U.S. ports, potentially increasing supply flexibility and reducing fuel shortages.The government has, in the past, temporarily waived U.S. shipping requirements to address fuel shortages after major hurricanes, but such a move is often politically sensitive. The Jones Act is strongly supported by his colleagues in Congress as well as some of the nation’s largest shipbuilders and vessel operators. On Thursday, a White House official said the Trump administration could ensure that the move would not impact the US shipbuilding industry.The US last granted a waiver under the act in October 2022, allowing a tanker to deliver supplies to Puerto Rico after Hurricane Fiona.The Biden administration also temporarily approved a waiver for Valero Energy following a cyberattack on a major fuel pipeline along the US East Coast in 2021.