A recent analysis shows that President Donald Trump’s decision to suspend century-old shipping restrictions has failed to meaningfully reduce gasoline costs for American consumers, despite oil industry participation in the program.
In March, the president temporarily lifted requirements under the Jones Act, which mandates that vessels moving goods between U.S. ports must be American-built, American-owned, and staffed by American crews.
The century-old legislation was designed to bolster the domestic shipping sector and protect national security interests, though it has historically increased transportation expenses for domestic fuel movement.
The presidential action was intended to ease fuel transportation along American coastlines, particularly shipping products from Gulf Coast refineries to Eastern and Western regions that depend on imports because they lack adequate local refining capacity and pipeline infrastructure.
This suspension marks the most extensive Jones Act waiver ever implemented and provides a practical examination of whether relaxing these regulations can lower fuel transportation expenses.
Fuel costs have surged since the U.S.-Israeli conflict with Iran started in late February, prompting the administration to pursue multiple strategies to address rising prices that contribute to inflation. High gasoline costs could damage Republican prospects as they seek to maintain congressional control in November’s midterm voting.
According to AAA, nationwide gasoline averaged $4.49 per gallon on Tuesday, up from below $3 before the conflict began. California drivers faced even steeper costs at $6.11 per gallon on average.
“This waiver is not delivering on what (Trump) was told it would do: lower prices at the pump, and materially increase the flow of product across the country,” said Jennifer Carpenter, president of the pro-Jones Act group American Maritime Partnership.
White House officials stated that information gathered since implementing the Jones Act suspension demonstrated that substantially more supply reached U.S. ports more quickly. Administration representatives expressed satisfaction with the waiver’s performance and informed the petroleum industry they would consider future extensions if circumstances warrant, according to two sources.
Federal records indicate that during the waiver’s initial two months, refiners including Valero and Phillips 66 utilized the exemption approximately 50 times, transporting 2.6 million barrels of crude oil and 7.5 million barrels of gasoline, diesel and jet fuel.
However, these quantities represented only a small portion of daily U.S. consumption, while costs for available foreign-flagged vessels remained elevated because numerous ships were stuck in the Strait of Hormuz.
“Freight rates are much, much higher than they typically would be,” said Ryan Kellogg, an energy policy professor at the University of Chicago. “International vessels were just really hard to get.”
Critics of the Jones Act argue the law creates operational inefficiencies, and point to waiver usage as evidence of demand for additional tanker capacity.
“The fact that waivers have been used 50 times to move energy suggests that this was the best option, and if this didn’t exist, a more expensive, costlier option would have had to be used,” said Colin Grabow at the conservative think tank Cato Institute, which has long called for the law to be repealed.
California, America’s largest oil and fuel importing state, received more than 60% of gasoline and blendstock shipments moved under the waivers — approximately 3 million barrels, equivalent to 2.1 million gallons daily. This amount represents roughly 6% of the 36 million gallons California residents consume each day.
International vessels also delivered gasoline to Alaska, Florida, South Carolina and Oregon, according to data. Total shipments reached about 84,000 barrels daily, a small fraction of the 8.75 million barrels consumed nationwide each day.
Transportation via international vessel from the U.S. Gulf Coast to the West Coast would have reduced costs by approximately 6.6 cents per gallon, or 1% of California’s current prices, compared to using a Jones Act tanker, according to price reporting firm Argus. On the East Coast, strong demand for foreign ships bound for Asia actually made Jones Act tankers the more economical option.
Industry experts predicted companies will likely increase waiver usage in upcoming weeks as international tanker rates decline.
The suspension also seemed to alter shipping patterns, creating concerns about limited U.S. tanker availability. At least one American tanker carried Alaskan crude to South Korea in April, marking its first documented international trip since 2014. Valero recently sought a Jones Act tanker for fuel transport to Mexico, two sources reported.
Industry sources identified this as a potential unintended result of the waiver: Foreign vessels undercutting domestic routes could push more U.S. ships toward international business, creating strain on domestic tanker supply. Tax uncertainty surrounding waiver voyages also discouraged companies from hiring foreign tankers for U.S. routes, according to a shipping source.
