U.S. oil producers and shipping organizations have been told to prepare for the possibility that the administration will temporarily waive the Jones Act - the federal law that restricts coastal trade to U.S.-built, U.S.-flagged and majority U.S.-owned vessels. Two sources familiar with the discussions described the alert, and said an official announcement could come as early as Thursday.
The potential waiver is being discussed as a measure to address sharp increases in fuel prices that have accompanied the onset of the U.S.-Israeli war on Iran, according to the sources. The White House did not immediately provide comment on the reported preparations.
The Jones Act requires that goods transported between U.S. ports be carried on ships that meet three conditions: they are built in the United States, they fly the U.S. flag, and they are predominantly owned by U.S. interests. Those conditions substantially narrow the pool of tankers available for domestic fuel shipments.
Temporarily waiving the statute would permit foreign vessels to move fuel between U.S. ports. Supporters of such a move argue it could reduce shipping costs and accelerate deliveries by expanding the number of tankers able to serve domestic routes.
Historically, U.S. authorities have exercised Jones Act waivers only in limited circumstances, typically in response to major supply disruptions. The most recent examples occurred following the 2017 hurricanes that caused widespread damage. At that time, the Department of Homeland Security temporarily authorized foreign-flagged ships to transport fuel between U.S. ports to help relieve shortages and hasten deliveries to the areas affected by the storms.
Officials and industry participants have been put on notice as discussions continue. Because waivers have been rare and are issued principally during acute supply crises, the potential move would represent an exceptional use of executive authority intended to address near-term logistical pressures in fuel distribution.