Trump temporarily loosening shipping rules in bid to lower gas prices

The Trump administration is temporarily loosening shipping laws as part of an effort to lower gasoline and other commodity prices amid the conflict with Iran, though the effort may only have a small impact.

The administration is issuing a 60-day waiver of the Jones Act, according to a Wednesday post from White House press secretary Karoline Leavitt.

The Jones Act is a 100-year-old law that requires shipping between U.S. ports to be conducted by U.S.-flagged ships.

“President Trump’s decision to issue a 60-day Jones Act waiver is just another step to mitigate the short-term disruptions to the oil market as the U.S. military continues meeting the objectives of Operation Epic Fury,” Leavitt wrote.

The move was first reported by Bloomberg, which noted that the waiver could allow foreign ships to carry products including oil, coal, gasoline and other products made from oil, natural gas, fertilizer and more. 

The White House confirmed the accuracy of the Bloomberg report.

However, the effort may not have a major impact on actual prices consumers see at the pump.

In 2022, JPMorgan projected that a Jones Act waiver could save East Coast drivers about 10 cents per gallon.

A 2023 working paper from the National Bureau of Economic Research found that waiving the Jones Act could have reduced average East Coast gasoline prices by 63 cents per barrel.

A standard barrel of oil produces about 19 gallons of gasoline, 10 gallons of diesel and 4 gallons of jet fuel on average, meaning that the projected difference could be just a few cents per gallon of gas.

That paper also found that it would increase Gulf Coast gas prices by about half as much.

Fuel prices have risen sharply because of the war in Iran. Shipping through the Strait of Hormuz, a key shipping channel for oil and other products, has effectively halted. 

About one-fifth of global oil consumption goes through the strait on an average day.

The average U.S. gasoline price was about $3.84 per gallon on Wednesday, up about 92 cents from a month ago.

International benchmark Brent Crude was trading at nearly $110 per barrel on Wednesday morning.

—Updated at 10:40 a.m. Eastern

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