Why Trump’s Waiver of the Jones Act Is Unlikely To Lower Gas Prices
Oil Prices Rise as Iran Hardens Hormuz Demands Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.
President Donald Trump is weighing another suspension of the Jones Act as gasoline pricesabove $4 a gallonthreaten to become a liability for Republicans heading into the midterm elections.
The move would again open domestic oil and fuel shipments to cheaper foreign-flagged vessels, extending an emergency waiver Trump imposed after the Iran war sent crude prices sharply higher in March.The problem is that the first waiver barely moved gasoline prices.
Shipping costs account for only a small part of what Americans pay at the pump, leaving Trump with limited room to cut prices through maritime policy as he turns up the pressure on ExxonMobil and Chevron over their soaring profits.
At the same time, Trump hasstepped up pressure on Big Oilover high gasoline prices, lambasting Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) for making too much money amid high energy prices and global supply shortages.
Trump has directed the Department of Justice to investigate Big Oil for possible price gouging, accusing oil companies of keeping gasoline prices high even as global crude prices have fallen.
Related: Iran Says Hormuz Stays Closed Until U.S.
Meets Six Sweeping Demands The backlash followed the companies' bumper second quarter results, withChevron's quarterly earningssurging to $12 billion, up from $2.5 billion the previous year whileExxonMobil's profitsmore than doubled to $14.5 billion.
With Big Oil showing no indication of heeding Trump’s threats, extending the Jones Act waiver is another lever to pull, from the perspective of the White House.
The initial 60-day exemption, announced in March after oil prices spiked in the first weeks of the Middle East conflict, is set to expire on August 16.
By temporarily lifting the law’s strict maritime restrictions, the White House has allowed foreign-flagged vessels to transport oil and refined petroleum products between domestic ports.
The Jones Act is a federal law that dictates that all cargo transported between U.S.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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