As tensions between the U.S. and Iran escalate once more and international oil prices hover near $80 per barrel, the U.S. government is considering the continued use of a controversial policy tool—relaxing the century-old Jones Act.
According to reports from Wednesday, the White House is examining another extension of the Jones Act waiver and discussing the possibility of adding regional restrictions. This move aims to balance easing energy supply constraints with addressing opposition from the domestic shipping industry. The current waiver is set to expire on August 16, with a final decision expected by the end of this month.
This represents the latest action by the Trump administration this year to manage energy costs. Against the backdrop of ongoing tension in the Strait of Hormuz, renewed U.S. pressure on Iran, and a rebound in global oil prices, the White House is attempting to prevent transportation bottlenecks from further driving up gasoline and diesel prices by increasing domestic maritime shipping capacity.
Potential New Extension May Include Geographic Limits
As reported by Reuters, citing two informed sources, the White House convened a meeting this week with leaders from the Departments of Energy, Transportation, and the Interior to discuss whether to continue the Jones Act waiver.
The sources indicated that one option under consideration is to continue allowing foreign-flagged vessels to transport cargo between U.S. ports, but potentially with added geographic restrictions. This would limit the waiver to specific regions, thereby reducing political pressure from the U.S. shipping industry and Republican lawmakers.
A White House official stated that no final decision has been made. The official noted that President Trump's previous decision to waive the Jones Act helped avert nationwide supply chain shortages, and the administration continues to evaluate the policy's effects.
The report notes that with U.S. domestic crude oil prices currently around $80 per barrel, controlling energy costs remains a key policy objective for the White House.
Beyond easing the Jones Act, the Trump administration has previously tapped the Strategic Petroleum Reserve (SPR) to release crude into the market. U.S. SPR inventories are now among their lowest levels since 1983.
Understanding the Jones Act
The Jones Act, formally known as the Merchant Marine Act of 1920, is a century-old U.S. maritime protection law.
The act mandates that cargo transported between U.S. ports must be carried on vessels that are: built in the United States; owned by U.S. citizens; and crewed by U.S. sailors.
Long supported by the U.S. shipping and shipbuilding industries, the law is viewed as crucial for national security and preserving the domestic maritime sector. However, the energy industry argues it restricts shipping capacity and raises domestic transportation costs, particularly during periods of tight supply.
Consequently, the U.S. government typically grants temporary Jones Act waivers only in response to major natural disasters or national emergencies.
Initial Waiver in March to Lower Prices, Extended for 90 Days in April
If approved, this would mark the second extension of the Jones Act waiver by the Trump administration this year.
In March, amid global supply concerns triggered by the Strait of Hormuz crisis, the U.S. government first announced a 60-day Jones Act waiver to increase transport capacity, ease supply chain pressure, and curb rising energy prices.
On March 18, President Trump announced a 60-day suspension of the Jones Act, lifting restrictions on shipping between domestic ports in an effort to counter oil price increases stemming from the effective closure of the Strait of Hormuz. White House Press Secretary Caroline Levitt stated in a declaration that day that the measure "will allow critical resources like oil, gas, fertilizer, and coal to flow freely to U.S. ports for 60 days."
One month later, the Trump administration extended the waiver, pushing the expiration date to August 16.
On April 24, the administration announced that President Trump had signed a document extending the suspension for an additional 90 days. White House Assistant Press Secretary Taylor Rogers stated via social media that pausing the Jones Act enabled more supplies to reach U.S. ports faster, helping to maintain the supply of essential energy products, industrial raw materials, and agricultural necessities.
Ongoing Opposition from Shipping Industry and Republicans
However, this policy has faced significant controversy since its introduction.
The White House believes that permitting foreign vessels to participate in U.S. coastal shipping can quickly boost capacity and improve the flow of critical goods like oil, fuel, and fertilizer between American ports, thereby alleviating supply tightness.
U.S. shipping and shipbuilding interests, however, argue that the policy undermines the competitiveness of the domestic maritime industry and could harm national security.
The report states that some Republican lawmakers, including House Speaker Mike Johnson, have publicly called on the administration this month to end the waiver. They argue that long-term reliance on foreign vessels for transport would weaken the U.S. maritime industrial base.
Now, with renewed tension in the Middle East and the energy market facing fresh supply risks, the White House once again finds itself at a crossroads between controlling oil prices and protecting the domestic shipping industry. The decision on whether to grant a third extension of the Jones Act waiver will serve as a key indicator of the Trump administration's energy policy direction.
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