Here's a classic Washington move: when a geopolitical crisis pushes up gas prices, start looking at a 104-year-old shipping law. According to reports, the Trump administration is mulling a temporary waiver of the Jones Act. The goal? To let foreign vessels transport fuel and agricultural products between U.S. ports, hoping to smooth out supply snarls and maybe take a little pressure off prices at the pump.
Press Secretary Karoline Leavitt confirmed the consideration in a statement, though the decision is reportedly not yet final. The context is the surge in fuel prices triggered by the U.S.–Israeli war with Iran. The idea is that by allowing more ships into the domestic shipping lane, you could reduce costs and speed up deliveries.
Not everyone is on board, of course. Seven maritime labor unions have already criticized the proposal. Their argument is straightforward: gasoline prices are driven by the price of crude oil, not by shipping costs. Waiving the Jones Act, they suggest, is solving the wrong problem.
What Is The Jones Act?
So, what's the big deal about this law? The Jones Act, formally the Merchant Marine Act of 1920, is a piece of protectionist legislation that's been around for a century. It's simple in its rules: goods transported between U.S. ports must travel on ships that are U.S.-built, U.S.-flagged, and predominantly U.S.-owned and crewed.
The law's goals are to maintain a strong domestic shipping industry and safeguard national security in maritime transportation. The trade-off is that it significantly limits the number of tankers available for domestic shipments, which can drive up costs. It's no surprise that the maritime unions are its staunchest defenders.
Oil Outlook Splits As War Lifts Prices
This potential waiver comes on the heels of another administration move to stabilize energy markets. The White House recently gave temporary authorization for countries to purchase Russian oil "stranded at sea" as tensions with Iran pushed crude prices higher.
The oil market itself seems to be sending mixed signals about what comes next. Investor Kevin O'Leary has warned that persistently high oil prices could keep gasoline costs elevated for Americans, potentially making energy the defining economic issue in the upcoming midterm elections.
On the other side of the bet, BlackRock Inc. (BLK) CEO Larry Fink has predicted a potential drop in oil prices—possibly even below pre-war levels—once the conflict ends and if a "neutralized" Iran re-enters the global market.
As of the latest check, the market was leaning toward the worried side. WTI crude oil was trading 1.16% higher at $96.66 per barrel. Meanwhile, the national average for a gallon of gasoline, according to the American Automobile Association, sat at $3.63.
