US weighs scrapping ship law to relieve oil crunch

The Trump administration is considering a temporary waiver of the Jones Act to help curb rising gasoline and oil prices.

The century-old law requires goods moved between US ports to travel on American-built and American-crewed ships. 

Officials are drafting a 30-day exemption that would allow foreign vessels to transport oil, gasoline, diesel, liquefied natural gas, and fertilizer between US ports. The move would enable cheaper tankers to ship Gulf Coast fuel to the East Coast and other high-demand regions.

Most US refineries sit on the Gulf Coast, while the Northeast depends on imports because only one major pipeline connects the regions. 

The waiver could lower East Coast gasoline prices by around 10 cents per gallon, JPMorgan estimated in 2022, though global oil market trends will still largely drive fuel costs.

Enacted in 1920 to shield US shipbuilders from foreign competition, the rule now constrains supply. With most ships built overseas and just 92 Jones Act–compliant vessels in service as of 2024, areas without pipelines—like the Northeast—rely on imported oil.

Meanwhile, the Treasury Department yesterday temporarily lifted sanctions on Russian oil shipments already at sea to help moderate energy prices.

Strategic oil release underway
The proposal comes as fuel prices surge amid tensions linked to the Iran–Israel conflict. To stabilize markets, the administration has announced the release of 172 million barrels of crude from the Strategic Petroleum Reserve. 

Globally, governments are coordinating a combined release of about 400 million barrels from emergency reserves.