The ongoing US-Iran conflict continues to pose a threat, and the US may take further actions to suppress oil prices; the White House is reportedly considering another extension of the "shipping ban" exemption.

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As the U.S.-Iran conflict escalates again and international oil prices return to around $80, the U.S. government is considering continuing to use a highly controversial policy tool—relaxing the century-old Jones Act.

According to reports on Wednesday the 15th, U.S. Eastern Time, the White House is studying another extension of the Jones Act waiver and discussing adding regional restrictions, seeking a balance between easing energy supply tensions and responding to opposition from the domestic shipping industry. The current waiver is set to expire on August 16, and a final decision is expected before the end of this month.

This is the latest move by the Trump administration this year to control energy prices. Against the backdrop of continued tensions in the Strait of Hormuz, renewed U.S. pressure on Iran, and a rebound in international oil prices, the White House is attempting to increase U.S. domestic maritime capacity to avoid energy transport bottlenecks from further pushing up gasoline and diesel prices.

New extension may add regional restrictions

According to Reuters, citing two sources, the White House this week convened heads of the Department of Energy, Department of Transportation, and Department of the Interior to discuss whether to further extend the Jones Act waiver.

The sources said one option under discussion is to continue allowing foreign-flagged vessels to participate in transportation of goods between U.S. domestic ports, but to add geographic restrictions, permitting applicability only in specific regions, to reduce political pressure from the U.S. shipping industry and Republican lawmakers.

A White House official stated no final decision has been made. The official said Trump’s previous decision to waive the Jones Act helped avoid a nationwide supply chain shortage, and the government is continuously evaluating the efficacy of the waiver policy.

Reports say current U.S. domestic crude prices are about $80 per barrel, and energy price control remains one of the White House’s key policy goals.

In addition to relaxing the Jones Act, the Trump administration previously tapped into the Strategic Petroleum Reserve (SPR) to release crude into the market; current U.S. SPR inventories have fallen to one of the lowest levels since 1983.

What is the Jones Act?

The Jones Act, formally the Merchant Marine Act of 1920, is a century-old maritime protection law in the United States.

The act requires that transporting goods between U.S. ports must use ships that are: built in the U.S.; owned by Americans; and operated by American crews.

For a long time, the act has been supported by the U.S. shipping and shipbuilding industries and is regarded as an important system for maintaining national security and the domestic maritime industry. However, the energy sector believes the act restricts shipping capacity and increases domestic transport costs, especially in times of energy supply shortages.

Therefore, the U.S. government typically only issues temporary Jones Act waivers in cases of major natural disasters or national emergencies.

To lower oil prices, U.S. first lifted the "shipping ban" in March, extended 90 days in April

If approved, this will be the second time this year the Trump administration has extended the Jones Act waiver.

In March this year, as the Strait of Hormuz crisis raised global concerns on energy supplies, the U.S. government announced for the first time a 60-day Jones Act waiver to increase shipping capacity, ease supply chain pressures, and curb rising energy prices.

According to Xinhua News Agency, on March 18, Trump announced a 60-day suspension of the Jones Act, lifting restrictions on domestic port shipping to curb the oil price increases caused by the effective closure of the Strait of Hormuz. White House Press Secretary Karoline Leavitt said in a statement that, “This measure will allow vital resources such as oil, natural gas, fertilizers, and coal to move freely to U.S. ports for 60 days.”

A month later, the Trump administration extended the waiver again, pushing the expiration date back to August 16.

According to Xinhua, on April 24, the U.S. government announced that Trump had signed a document extending the suspension of the Jones Act by 90 days. White House Assistant Press Secretary Taylor Rogers stated via social media that suspending the Jones Act allows more supplies to reach U.S. ports faster, helping ensure the supply of key energy products, industrial raw materials, and essential agricultural goods.

Shipping industry and Republicans continue to oppose

However, this policy has been controversial since its inception.

The White House believes allowing foreign vessels to participate in U.S. coastal shipping can quickly increase capacity and improve the circulation efficiency of key goods such as oil, fuel, and fertilizer between U.S. ports, thereby easing supply tensions.

But U.S. shipping companies and the shipbuilding industry believe the policy weakens the competitiveness of the domestic shipping sector and could harm national security.

Reports state that some Republican lawmakers, including Speaker of the House Mike Johnson, have publicly called this month for the government to end the waiver, arguing that long-term reliance on foreign shipping will undermine the foundation of the American maritime industry.

Now, as tensions rise again in the Middle East and the energy market faces renewed supply risks, the White House once again faces the dilemma between controlling oil prices and supporting the domestic shipping industry. Whether the Jones Act waiver will be extended for a third time will be an important indicator of the Trump administration’s energy policy direction.

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