US suspends Jones Act for 60 days amid Iran conflict escalation

US President Donald Trump Temporarily Waives Shipping Law to Ease Energy Supply Chain

A 60-day waiver has been granted, allowing foreign-flagged vessels to transport goods between US ports. This move aims to ease the cost of transporting oil, gas, and other commodities within the country.

The Jones Act, passed in 1920, requires that any ship transporting goods or passengers between US ports must be built in the US, owned by US citizens, and crewed primarily by Americans. The law was designed to rebuild the US shipping industry after World War I and ensure the country’s reliance on its own merchant fleet during times of war.

The waiver is granted “in the interest of national defense” and typically requires approval from the Department of Homeland Security or the Department of Defense. However, some critics argue that restricting foreign competition has driven up shipping costs.

The move comes as oil markets have been volatile since the start of the US-Israel war on Iran. Tanker traffic through the Strait of Hormuz has been severely disrupted, affecting exports from major Middle Eastern producers. This disruption has pushed up prices worldwide, with Brent crude trading near $109 a barrel and US crude at roughly $98 a barrel.

The waiver also applies to fertilizers, which are in high demand during the current spring planting season. The administration hopes that this move will reduce transport costs and increase supply. However, some groups have expressed concerns about the potential impact on American workers and companies.

Analysts note that easing domestic shipping restrictions is unlikely to be a sweeping solution for reducing fuel prices. While the waiver may simplify logistics and make it slightly cheaper and easier for products to flow, it is estimated to offset 3 to 10 cents per gallon of price increases.

Source: Al Jazeera