EMA Regulatory Alert: Trump Administration to Issue Temporary Jones Act Waiver

EMA Regulatory Alert: Trump Administration to Issue Temporary Jones Act Waiver

Yesterday, the Trump Administration announced that it is preparing to suspend the Jones Act for 30 days, a move with significant implications for petroleum marketers. The Jones Act — formally the “Merchant Marine Act of 1920” — requires that cargo transported between U.S. ports travel on vessels that are American-built, American-owned, American-flagged, and crewed primarily by U.S. citizens. President Trump’s planned 30-day exemption would apply broadly to vessels moving crude oil, gasoline, diesel fuel, heating oil, liquefied natural gas, and fertilizer among U.S. ports, enabling foreign tankers and barges to move those goods.

The announced waiver is a direct response to fuel price spikes triggered by the U.S.-Israel military strikes on Iran and disruption to the Strait of Hormuz shipping lanes. For petroleum marketers, the practical effect could be meaningful — greater tanker availability on domestic waterborne shipping routes should ease supply bottlenecks that have pushed rack prices higher, particularly in East Coast markets that depend heavily on Gulf Coast product.

While announced, the Jones Act waiver itself has not yet been finalized.

“Marketers should monitor developments closely, and if the waiver is finalized and issued, short-term price relief at the rack is possible,” said EMA President Rob Underwood. “However, how quickly the price changes may be seen will depend largely on regional supply conditions and how aggressively suppliers move to take advantage of expanded vessel availability.”