International oil prices fell in the short term as the White House extended the shipping exemption period to ease the oil crisis.

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To alleviate supply shortages caused by the Middle East conflict, Trump announced an extension of the shipping waiver, allowing foreign ships to engage in U.S. coastal transportation. Oil prices fell in response.

On April 24, according to media reports, the Trump administration extended a key shipping waiver policy by 90 days, allowing foreign vessels to transport oil, refined products, and fertilizers between U.S. ports. The waiver, originally set to expire on May 17, now extends through mid-August. White House spokesperson Taylor Rogers stated the extension aims to “provide certainty and stability for the U.S. and global economy,” ensuring a steady supply of critical energy, industrial materials, and agricultural goods.

According to Xinhua, on March 18—a month earlier—U.S. President Trump announced a 60-day suspension of the Jones Act, lifting restrictions on domestic shipping between U.S. ports in hopes of curbing oil price hikes caused by the effective closure of the Strait of Hormuz.

The outlook for the current Middle East situation remains unclear, with signals of negotiation progress and escalation alternating. According to CCTV News, on April 24 local time, sources in the Pakistani government stated that Iranian Foreign Minister Araghchi would lead a delegation to Islamabad that evening. Previously, CCTV International News quoted U.S. media sources on April 23 as saying that the U.S. military is developing new plans to focus on Iran’s military defenses around the Strait of Hormuz if the U.S.-Iran ceasefire collapses. The report also said the U.S. military might target Iranian dual-use military and civilian infrastructure, including energy facilities, to force Iran back to the negotiating table.

Passage through the Strait of Hormuz is effectively blocked by war, with about 13 million barrels per day of crude oil and refined products disappearing from the global market, continuously driving up energy prices. In this context, the shipping waiver extension is expected to immediately benefit U.S. refiners seeking waterborne crude and starting to book July deliveries.

Waiver Covers 659 Commodities, Already Delivered in Multiple States

According to the 1920 Jones Act, the waterborne transport of goods between U.S. domestic ports must use ships built, owned, and flagged in the United States. The Trump administration’s waiver provisionally lifts this restriction, covering coal, crude oil, refined products, natural gas, natural gas condensates, fertilizers, and other energy derivatives.

The waiver applies to about 659 specific commodities identified by U.S. Customs and Border Protection, with the extension not reducing the range of covered products. Since the waiver’s issuance in March, ships have transported renewable diesel, crude, ammonia, ethanol, gasoline, and more under it, delivering to a number of states such as California, Florida, Pennsylvania, and South Carolina.

Driven by Defense Needs, Multiple Measures Respond to Energy Crisis

The waiver was initially requested by the U.S. Department of Defense. According to amendments to the Jones Act passed by Congress years ago, a waiver requested by the Department of Defense must meet two conditions: first, there are not enough qualified vessels to meet national defense needs; second, the waiver is indispensable to addressing immediate adverse impacts on military operations.

The shipping waiver is one of several measures taken by the Trump administration to curb soaring fuel prices and ease supply shortages. According to Bloomberg, the Trump administration has also temporarily waived some domestic fuel specification requirements and relaxed certain sanctions on seaborne Russian crude. Trump and other senior officials predict that oil and gasoline prices will fall once the Middle East conflict ends. However, current price spikes have created political pressure for the president—with just a few months before the November midterm congressional elections, whose outcome will determine control of Congress and, in turn, affect his legislative agenda.

Diverging Positions: Oil Industry Supports, Shipping Strongly Opposes

Oil industry representatives and other waiver supporters previously lobbied the government for an extension, saying the policy helps facilitate fuel and oil supplies and allows flexible switching to new sources as needed.

However, supporters of the Jones Act strongly oppose it. Offshore Marine Service Association president Aaron Smith said that extending the waiver undermines legislative goals to protect U.S. shipbuilding and maritime strength, sending a message that U.S. ships can be marginalized, thereby suppressing long-term domestic shipping investment. “This extension sacrifices the foundations of the U.S. shipping industry and navy for the benefit of oil traders and foreign shipowners,” Smith added.

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