The second extension of the 1920 shipping law exemption comes as the Strait of Hormuz remains effectively closed and U.S. petroleum reserves hit their lowest level since 1983.
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Trump narrows Jones Act waiver extension to 90 days as oil crunch deepens
The second extension of the 1920 shipping law exemption comes as the Strait of Hormuz remains effectively closed and U.S. petroleum reserves hit their lowest level since 1983.
Trump extended the Jones Act waiver 90 days on Monday but narrowed its scope to energy and fertilizer cargo, keeping foreign ships moving oil between U.S. ports while the Iran war disrupts global crude flows.
"Data shows the waiver has driven a significant increase in domestic deliveries of essential products such as gasoline, diesel, and jet fuel," Taylor Rogers, White House spokeswoman, said.
The extension, effective August 17, requires the Pentagon to consult with the U.S. Maritime Administration on a case-by-case basis for each voyage. Since Trump first waived the 1920 law on March 17, 210 voyages have been completed that would otherwise have been unlawful, with nearly 55 million barrels of cargo shipped, according to Maritime Administration data cited by the CATO Institute.
The waiver now covers a narrower list of commodities — gasoline, jet fuel, crude oil, naphtha, liquefied natural gas, soy oil and fertilizers — reflecting the bulk of cargo already moved under the exemption. The decision comes as oil prices resume their climb after a short-lived U.S.-Iran ceasefire failed to reopen the Strait of Hormuz, and U.S. petroleum reserves have fallen below 300 million barrels, the lowest since 1983.
The narrowed scope addresses concerns from U.S. shipbuilders and their allies in Congress who argued the blanket exemption was undermining the domestic maritime industry. Dozens of House Republicans, including Speaker Mike Johnson and Majority Leader Steve Scalise — both from Louisiana, a major shipping hub — had appealed to Trump to stop waiving the law. The Jones Act, enacted after World War I to bolster America's maritime capacity, requires cargo moving between U.S. ports to be carried on ships built in the U.S., owned by U.S. companies and crewed by American workers.
The White House's trade adviser Peter Navarro has defended the law from within, while Trump has been described by current and former officials as an ardent critic of the statute. The new case-by-case review process mirrors the scrutiny that has accompanied individual waivers in recent years, a pivot from the blanket relief Trump authorized in March. The exemption has been used by scores of ships for more than 230 coastal transits, including a surge of otherwise-rare shipments from the U.S. Gulf Coast to the West Coast and deliveries of American liquefied petroleum gas to Puerto Rico.
Oil market pressure builds as Hormuz stays shut
The extension comes just days before the previous waiver was set to expire on August 16. Traffic through the Strait of Hormuz — a primary waterway for shipping oil and natural gas — remains at a trickle after a renewed fight between Tehran and Washington kept millions of barrels from reaching markets daily. Oil prices have resumed their climb after Trump's signals of a deal to reopen the waterway failed to materialize in early August.
The American Petroleum Institute welcomed the extension. "This decisive step will ensure critical fuels reach the regions that need them most while reinforcing America's resilience amid ongoing global market disruptions," said Kristin Whitman, senior vice president of government relations at the institute.
The waiver's political stakes are elevated with midterm elections approaching in November, just months after inflation-weary Americans have faced higher fuel costs. Trump has acknowledged he was motivated to sign a short-lived ceasefire with Iran in part to forestall an "economic catastrophe" and avoid comparisons to Herbert Hoover, who was president during the 1929 stock market crash. The extension runs through mid-November, past the election date.
The last time a president suspended the Jones Act for an extended period was after Hurricane Sandy in 2012, when the Obama administration issued temporary waivers for fuel deliveries to the Northeast. Trump's exemption, now in its sixth month, is the longest suspension of the more than century-old law in its history.
This article is for informational purposes only and does not constitute investment advice.
