Oil prices skyrocketed, Trump is anxious? The White House announced a temporary exemption from the century-old Jones Act to reduce energy transportation costs.

The White House announced on Wednesday that President Trump has approved a temporary waiver of the century-old Jones Act, allowing foreign ships to participate in energy transportation between domestic ports in the United States for the next 60 days to reduce the transportation costs of oil, natural gas, and other bulk commodities. Since its implementation in 1920, the Jones Act has required that cargo transportation between U.S. ports must be carried out by ships built in the U.S., registered in the U.S., and operated by U.S. companies. This waiver means that some goods will temporarily no longer be subject to the above restrictions, and foreign oil tankers can participate in domestic energy transportation in the U.S. White House officials stated that this waiver covers a wide range of products, including crude oil, refined oil, natural gas, liquefied natural gas, coal, and fertilizers, among other energy-related products. White House Press Secretary Levi stated that this measure is one of the measures taken by the government to address the energy market turmoil caused by the Iran war, aiming to alleviate short-term supply shocks and ensure the stability of critical energy supply chains. She said, "This 60-day waiver measure will help alleviate short-term disruptions in the oil market, while ensuring the energy supply needs of the U.S. military in relevant operations." Currently, tensions in the Middle East continue to rise, with transportation through the Strait of Hormuz blocked and about 15 million barrels per day of crude oil transportation affected. The International Energy Agency has previously referred to this impact as the "largest supply disruption in the history of the global oil market." As a result, international oil prices have continued to rise, with Brent crude oil reaching $109 per barrel at one point on Wednesday. Analysts point out that in the short term, relaxing the restrictions of the Jones Act will help reduce domestic transportation costs in the United States. The inclusion of foreign oil tankers can alleviate transportation bottlenecks from refineries along the Gulf Coast to the East Coast, while reducing the supply costs of gasoline and diesel in the Northeast. JPMorgan estimated in 2022 that such policies could provide a price reduction of about 10 cents per gallon for consumers on the U.S. East Coast. James Lucier, Managing Director of Capital Alpha Partners, noted that the Jones Act has long raised domestic transportation costs in the U.S., leading to low-priced gasoline that could have been transported to markets on the East Coast, such as New York, being exported to Mexico instead. This waiver will help address this resource allocation issue. Moreover, this policy may also reduce the transportation costs of nitrogen fertilizers along the Mississippi River. However, some analysts believe that the timing of the policy being introduced late, as the peak planting season approaches, may limit its impact on agricultural costs this season. In recent years, the U.S. government has used similar waivers in emergency situations multiple times. For example, in 2022, then-President Biden provided temporary waivers for oil tankers delivering fuel to Puerto Rico after Hurricane Fiona. Recently, Trump has taken a series of measures to address the rise in oil prices, including plans to release 172 million barrels of strategic petroleum reserves, relax some restrictions on the sale of Russian oil, and propose to send U.S. troops to escort oil tankers through the Strait of Hormuz. Meanwhile, the government is also considering lowering shipping costs through reinsurance mechanisms. However, waivers of the Jones Act have long been controversial. The U.S. shipbuilding industry and its supporters in Congress have long viewed the law as an important policy tool to protect the country's maritime industry and have opposed any form of relaxation. In response, White House officials emphasized that this waiver is only a temporary arrangement and will not have a long-term impact on the U.S. shipbuilding industry. From a political perspective, rising oil prices are becoming an important pressure facing the Trump administration. Energy prices play a significant role in U.S. inflation and the cost of living for people, and the upcoming midterm elections make controlling oil prices a key issue.