Trump May Suspend Century-Old Shipping Law as Iran War Drives Up Gas Prices

The Trump administration is considering temporarily waiving the Jones Act, a 1920 maritime law, to help combat rising fuel costs caused by the ongoing Iran conflict. The law requires cargo between U.S. ports to use American-flagged ships, but critics say it increases transportation costs and slows deliveries.

The ongoing conflict between the U.S., Israel and Iran has disrupted global energy markets and supply chains, prompting the Trump administration to explore suspending requirements under a maritime law that’s been in place for more than 100 years.

Known as the Jones Act, this legislation mandates that cargo transported between American ports must travel aboard vessels flying U.S. flags. Originally enacted in 1920, the law was designed to safeguard America’s shipping industry, though critics have long argued it delays goods delivery and drives up costs, particularly for gasoline.

White House officials confirmed this week they’re examining the possibility of temporarily waiving Jones Act provisions as part of broader efforts to address surging oil prices and shipping disruptions caused by the war.

Officially called the Merchant Marine Act of 1920, this legislation was championed by Senator Wesley Jones from Washington state. Congress approved the measure to help restore America’s shipping capabilities after German submarines destroyed much of the nation’s merchant fleet during World War I.

The Jones Act establishes that vessels transporting goods and passengers between domestic ports must be constructed in America and owned by U.S. citizens, essentially barring foreign-flagged ships from participating in domestic commerce. These ships must also employ American crews.

According to the U.S. Maritime Administration, the law can be suspended for “interest of national defense” purposes through either the Homeland Security or Defense departments.

The legislation was also designed to guarantee America maintained its own merchant fleet during wartime. Some U.S. shipping companies, national security experts and labor unions have championed the law, but eliminating foreign competition has increased domestic cargo transportation expenses.

American-flagged vessels typically cost more to operate and construct compared to foreign alternatives. These elevated costs particularly impact states and territories dependent on maritime supply routes, including Hawaii and Puerto Rico.

Since the Iran war began, oil prices have experienced dramatic spikes and volatility as tanker traffic through the crucial Strait of Hormuz has essentially stopped and major Middle Eastern oil producers have reduced output. Commercial vessels carrying everything from medications to computer components have also faced delays at sea or direct attacks.

These disruptions are increasing costs for businesses and consumers globally. Crude oil now trades near $100 per barrel, climbing from approximately $70 before hostilities commenced. American drivers have already experienced pump price increases, with regular gasoline averaging around $3.63 per gallon on Friday according to AAA, representing a 69-cent jump from the previous month.

These developments have nations seeking additional supply sources and alternative shipping pathways. When asked Friday about potentially suspending the 1920s-era Jones Act, President Donald Trump responded, “we’ll take a look at everything.”

During a Fox News Radio interview, Trump described the Jones Act as a “restrictive act” while acknowledging it enjoys “tremendous support” in Congress. The president’s remarks followed White House press secretary Karoline Leavitt’s Thursday confirmation that the administration was exploring a temporary waiver to “ensure vital energy products and agricultural necessities are flowing freely to U.S. ports.”

Neither official provided a specific timeframe for any decision.

Numerous factors influence gasoline prices. Allowing foreign-flagged vessels access to domestic shipping routes might provide some relief by expanding transportation alternatives, but it wouldn’t represent a comprehensive solution.

The Center for American Progress projects that waiving the Jones Act would reduce East Coast gasoline prices by approximately three cents while potentially increasing Gulf Coast costs. The research organization stated Friday that such action “would also sideline American shipbuilders and workers and allow the oil industry to continue to profit from high prices while reducing transport costs.”

The United States has emerged as a leading crude oil producer, now exporting more petroleum than it imports. However, oil remains a globally traded commodity, and countries worldwide are pursuing additional measures to combat escalating prices.

Thursday evening, the Treasury Department announced another step to release Russian oil from U.S. sanctions related to its Ukraine conflict, issuing a one-month waiver license. This follows last week’s decision granting India temporary authorization to purchase Russian oil.

Earlier this week, the International Energy Agency committed to releasing 400 million barrels from member nations’ reserves, representing the largest emergency oil release in the organization’s history. While Trump previously questioned the need to access reserve oil, he confirmed Wednesday that the U.S. would withdraw 172 million barrels from its Strategic Petroleum Reserve over 120 days as part of the IEA initiative.

Analysts maintain this release will serve as a short-term solution. New supply takes time to reach consumers, and refineries purchase crude oil in advance, meaning higher price impacts could intensify if the conflict continues. Even with additional reserve withdrawals, they may be working with more expensive supply for an extended period.