Administration moves to stabilize energy markets as prices climb during ongoing conflict.
By yourNEWS Media Newsroom
President Donald Trump has approved a 60-day waiver of the Jones Act to help reduce shipping costs and maintain fuel supply flows as energy prices rise during the ongoing conflict involving Iran, the White House announced March 18.
The waiver allows foreign-flagged vessels to transport goods between U.S. ports, temporarily suspending requirements under the 1920 law that mandates domestic shipping be conducted on U.S.-flagged ships. The exemption applies to key commodities including crude oil, natural gas, refined fuels, coal, and fertilizer.
White House Press Secretary Karoline Leavitt said the move is intended to address short-term disruptions in the oil market while U.S. military operations continue. She stated in a post that the decision is part of broader efforts tied to ongoing operations.
The administration said the waiver will allow foreign tankers to assist in moving domestic crude supplies to U.S. refineries, helping offset logistical constraints and rising transportation costs linked to disruptions in the Strait of Hormuz.
Fuel prices have increased sharply since the conflict began. The national average price of gasoline surpassed $3.84 per gallon on March 18, while diesel exceeded $5 per gallon for the first time since 2022, according to data from the American Automobile Association. Diesel prices were approximately $3.67 per gallon just one month earlier.
Estimates on the impact of suspending the Jones Act vary. A 2023 working paper suggested that removing the restriction could lower East Coast gasoline prices by as much as 63 cents per gallon, with potential reductions of up to 82 cents for diesel and 80 cents for jet fuel. However, a 2024 analysis published by the National Bureau of Economic Research projected a more modest decrease of about 3 cents per gallon.
The waiver is part of a broader set of measures aimed at stabilizing global energy markets. The administration has introduced political risk insurance to encourage tanker traffic through the Strait of Hormuz, proposed naval escorts for commercial vessels, and issued temporary waivers permitting the purchase of sanctioned oil.
In addition, the United States and international partners are preparing to draw from emergency reserves. Members of the International Energy Agency plan to release 400 million barrels from global stockpiles, while the U.S. Department of Energy has been authorized to release 172 million barrels from the Strategic Petroleum Reserve.
President Trump said energy prices are expected to decline once the conflict concludes. Speaking to reporters on March 13, he stated, “I think your gas prices, as soon as that’s over, are going to come tumbling down along with everything else,” adding that a significant drop in energy costs could follow the end of hostilities.
Market analysts say the outlook will depend on how long the conflict continues and the timeline for reopening the Strait of Hormuz. LPL Financial chief equity strategist Jeff Buchbinder said restoring normal shipping conditions may take several weeks, noting uncertainty around how quickly disruptions can be resolved.
Oil prices continued to rise midweek despite the announcement. U.S. benchmark West Texas Intermediate crude increased nearly 3 percent to about $99 per barrel on the New York Mercantile Exchange, while Brent crude climbed roughly 6 percent to near $110 per barrel on international markets.
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