Report: Trump Temporarily Exempts Jones Act, Authorizes Foreign Vessels to Transport Energy in Bid to Curb Oil Prices

Questioning AI · How Middle East Conflict Urgently Eases the Century-Old Jones Act?

The Middle East situation impacts global energy supplies, prompting the White House to implement a 60-day exemption, but analysts say the effect is limited.

On March 18, Bloomberg reported that Trump signed an executive order on Wednesday to temporarily waive the century-old Jones Act, allowing foreign-flag ships to carry a variety of bulk commodities such as oil and natural gas between U.S. domestic ports for the next 60 days. This move is one of the White House’s latest measures to address the surge in energy prices caused by the Middle East conflict.

White House Press Secretary Karoline Leavitt stated in a release that this exemption aims to ease short-term volatility in the oil market and maintain the energy supply chain critical to national security. The exemption is expected to reduce transportation costs for West Coast crude oil to East Coast refineries and ease price pressures in the Northeast refined product markets.

Century-Old Jones Act Loosens for the First Time: Foreign Ships Allowed in U.S. Energy Transport

According to details disclosed by White House officials, the scope of commodities covered by this exemption includes coal, crude oil, refined oil, natural gas, liquefied natural gas, fertilizers, finished petroleum products, and other energy derivatives.

The Jones Act, enacted in 1920, requires cargo transported between U.S. ports to be carried on ships flying the U.S. flag, built in the U.S., and owned by U.S. operators. Its original purpose was to support the domestic shipbuilding industry. This exemption temporarily relaxes those restrictions, allowing foreign ships to participate in relevant routes.

James Lucier, Managing Director of research firm Capital Alpha Partners, pointed out that the Jones Act previously made it prohibitively expensive to transport gasoline from Houston’s shipping lanes to New York Harbor and other East Coast destinations, leading to large quantities of cheap gasoline refined from U.S. crude oil being exported to Mexico rather than supplied domestically.

A Drop in the Ocean? Analysts Say Jones Act Exemption Cannot Fully Mitigate Global Supply Shock

Trump’s exemption decision is part of his recent series of measures to respond to rising energy prices. The Middle East conflict has effectively resulted in the de facto closure of the Strait of Hormuz, blocking about 15 million barrels per day of oil supply, severely disrupting the global energy supply chain, and causing intense volatility in financial markets.

The International Energy Agency has characterized this supply disruption as “the largest in the history of the global oil market.” Against this backdrop, some analysts believe that a single domestic transportation policy adjustment has limited buffering capacity and cannot fundamentally fill the supply gap.

Beyond energy products, this exemption may also reduce transportation costs for nitrogen fertilizers along the Mississippi River. However, some analysts expect that the timing of the exemption may be too late to significantly ease agricultural production costs during the main planting season this spring.