New York — Such as the United States and Israel The war against Iran It keeps turning over Energy markets and Supply chains Around the world, the Trump administration says it may suspend ocean shipping requirements under a more than a century-old law known as the Jones Act.
The Jones Act requires that goods transported between U.S. ports be transported on U.S. flagged ships. Passed in 1920, the law aims to protect the American shipping sector — but it has also faced criticism over the years for slowing the delivery of goods, including Critical aid during crises. It is often blamed for making gas, in particular, more expensive.
The White House confirmed that it is considering waiving the requirements of the Jones Act this week, in a temporary measure that will come amid broader efforts to confront Sharp oil prices Shipments were disrupted due to the war.
Here’s what we know.
The official name of the Jones Act is the Commerce Marine Act of 1920. The law was passed by Congress — sponsored by Senator Wesley Jones of Washington state — in an attempt to rebuild American shipping after German submarines destroyed the American merchant fleet during World War I.
Among other things, the Jones Act stipulates that ships carrying cargo and passengers between U.S. ports must be built in the United States and owned by Americans — effectively banning foreign-flagged ships from such domestic trade. The ships must also carry American crews.
The US Maritime Administration notes that the law can be waived “in the interest of national defense,” either through the Department of Homeland Security or the Department of Defense.
The Jones Act was also intended to ensure that the United States would have its own merchant fleet in the event of war. It has been strongly supported by some American shipping companies, national security advocates and organized labor. But the exclusion of foreign competition also drove up the cost of transporting goods domestically.
US-flagged ships are generally more expensive to operate and build than foreign ships. These costs particularly hurt states and territories that are supplied by sea, such as Hawaii and Puerto Rico.
Oil prices have risen and fluctuated rapidly since the start of the Iran war – which has virtually halted the world’s tanker traffic. The main Strait of Hormuz It prompted major oil producers across the Middle East to cut production. Merchant ships – which, in addition to fuel, transport goods Medicines into computer chips – It was also stopped at sea or They faced the attacks themselves.
this Raising prices For businesses and consumers around the world. Crude oil is now trading at about $100 a barrel, up from about $70 before the war began. And in the United States, drivers have already seen prices rise at gas stations — the national average for regular gasoline was about $3.63 a gallon on Friday, per AAA, up 69 cents from last month.
All of this has countries scrambling for more supplies and alternative shipping methods. On Friday, when asked if he would consider suspending the 1920 Jones Act, President Donald Trump said: “We’ll take a look at everything.”
In an interview with Fox News Radio, Trump called the Jones Act a “restrictive law” but also acknowledged that it has “tremendous support” in Congress. The president’s comments arrived after White House press secretary Carolyn Leavitt He confirmed Thursday That the administration was looking at a temporary waiver “to ensure critical energy products and agricultural necessities flow freely into U.S. ports.”
No timetable was set.
Many factors contribute to prices at the pump. Opening domestic shipping routes to foreign-flagged ships may bring some relief in the form of expanded transportation options, but it is not a comprehensive solution.
The Center for American Progress estimates that waiving the Jones Act would lower East Coast gas prices by a modest three cents, but would likely raise costs on the Gulf Coast. The move “would also sideline American shipbuilders and workers and allow the oil industry to continue benefiting from high prices while reducing transportation costs,” the Center for Research and Policy said on Friday.
Late Thursday, the Treasury Department announced it would take another step toward that Liberalization of Russian oil of US sanctions due to its war on Ukraine, and granted it a license to waive those sanctions for a month. This builds on last week’s move to give India temporary permission to buy Russian oil.
Earlier this week, the International Energy Agency also pledged this Launching 400 million barrels of oil available from member states’ stocks, which is the largest volume of emergency oil withdrawn in the organization’s history. Trump previously reduced the need to tap reserve oil, but confirmed on Wednesday that the United States would withdraw 172 million barrels from its reserves. Strategic Petroleum Reserve More than 120 days as part of the International Energy Agency’s efforts.
However, analysts confirm that the release will be Short span bridge. Refiners also purchase crude oil in advance, and it takes time for new supplies to reach consumers. It is also possible that the pain of rising prices will increase further if the war continues.
The United States is a net exporter of oil, but this… Doesn’t mean he’s immune To global booms. Oil is a globally traded commodity. Most of what the United States produces is light, sweet crude, but refineries on the East and West coasts are designed primarily to process heavy, sour products. As a result, it also needs imports.
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AP writers Paul Weissman and Colleen Binkley in Washington contributed to this report.