Trump’s suggested Jones Act exemption alone won’t sufficiently reduce gasoline prices

Trump Administration Considers Easing Shipping Law Amid Surging Gas Prices

As gasoline prices soar during the ongoing Iran conflict, President Donald Trump faces limited options to curb the rapid increases. One measure under consideration is temporarily suspending a little-known shipping regulation, though experts suggest this move alone is unlikely to significantly lower prices.

The administration announced Thursday it may grant a short-term exemption to the Jones Act—a law over a century old that mandates goods transported between U.S. ports must travel on American-owned and crewed vessels.

“To protect national security, the White House is evaluating a temporary Jones Act waiver to keep essential energy and agricultural supplies moving smoothly to U.S. ports,” stated press secretary Karoline Leavitt.

According to a Bloomberg report, this potential waiver would apply to commercial shipments of oil, gasoline, diesel, natural gas, and fertilizer—all of which have seen dramatic price hikes since the U.S. and Israel launched strikes against Iran late last month. The change would permit foreign-flagged ships to transport these goods between American ports.

The White House is exploring several strategies to provide relief at the pump for Americans already struggling with rising costs for essentials. Considering changes to the Jones Act highlights the growing political pressure to address escalating fuel prices and the economic impact of the conflict.

On Friday, the national average for gasoline climbed to $3.63 per gallon, up from $2.94 just a month earlier, according to AAA.

However, energy experts caution that a Jones Act waiver by itself is unlikely to cause a substantial drop in gas prices.

“Such a waiver won’t lead to a dramatic reduction in fuel costs,” said Colin Grabow, a trade policy analyst at the Cato Institute, in a recent blog post. “Shipping is only one of many factors influencing what consumers pay at the pump.”

Alex Jacquez, chief of policy and advocacy at the Groundwork Collaborative, echoed this sentiment, noting in a social media post that the effect on retail gas prices would be “less than two cents per gallon—essentially negligible.”

This week also saw other significant steps to address fuel costs. The Department of Energy announced Wednesday plans to release 172 million barrels of oil from the Strategic Petroleum Reserve over four months. This move, coordinated with numerous other countries tapping their emergency reserves, aims to help stabilize oil prices.

Conflict in Iran Drives Oil Market Turbulence

The war with Iran has rattled global energy markets, pushing oil prices to around $100 per barrel. This week, oil trading has been highly volatile as uncertainty about the conflict’s length and potential escalation grows.

Recently, Iran responded with military attacks in the Strait of Hormuz, a vital route responsible for about 20% of the world’s oil shipments. Many shipping companies are now steering clear of the area due to safety concerns and the risk of losing their vessels.

The energy sector is deeply unsettled by the ongoing hostilities, with no clear end in sight. President Trump has sent mixed messages about whether the conflict will persist or is nearing its goals. The International Energy Agency reported this week that the war has caused “the largest supply disruption in the history of the global oil market.”

History and Criticism of the Jones Act

While the Jones Act has not been a focus in Trump’s second term, it has sparked policy debates in the past.

Many trade experts have long argued that the Jones Act restricts shipping options and drives up the cost of transporting goods and shipbuilding within the U.S.

“The law limits transportation choices and increases expenses,” Grabow noted in the same blog post. “A regulation touted as vital for national security suddenly becomes negotiable when the stakes are high.”

The Jones Act drew renewed scrutiny after Hurricane Maria devastated Puerto Rico in 2017 and again following Hurricane Fiona in 2022. Critics argued that the law forced commercial ships to first stop at a U.S. mainland port, raising costs for the island’s residents and economy.

Historically considered nearly untouchable, the Jones Act is now among several unconventional policy options the Trump administration is weighing, including possible intervention in oil futures markets, as reported by Reuters.