The United States is considering waiving a law that requires U.S. ships to be used to move goods between its ports, in a bid to ease the impact of surging oil prices.
Under the proposed Jones Act exemption, the law would be waived for 30 days for vessels moving oil, gasoline, diesel, liquefied natural gas, and fertiliser, Bloomberg reported.
“In the interest of national defense, the White House is considering waiving the Jones Act for a limited period of time to ensure vital energy products and agricultural necessities are flowing freely to U.S. ports,” said White House press secretary Karoline Leavitt.
“This action has not been finalized.”
A waiver could be announced as soon as today, per Reuters.
Oil prices have soared amid the U.S. and Israel’s war against Iran. Iran has closed the Strait of Hormuz, where around 20% of global oil flows would usually transit.
Iran’s newly-chosen Supreme Leader, Mojtaba Khamenei, said in a written statement today that the country would continue to block the strait as a “tool to pressure the enemy”. Its military has also said the U.S. should “get ready for oil to be $200 a barrel”.
In the U.S., national average gasoline prices rose to US$3.598 per gallon today, compared with $3.578 yesterday and $2.944 one month ago.
Seven U.S. maritime labour unions said they opposed a Jones Act waiver in a letter to the administration. “Waiving the Jones Act would do nothing to reduce gasoline prices,” they wrote.
“A Jones Act waiver would instead create opportunities for foreign-flag operators that avoid paying U.S. taxes, rely heavily on low-wage labor, and operate under regulatory regimes that circumvent international labor and vessel safety standards in direct conflict of America’s national security and economic interests.”
The move would also come after the U.S. agreed to release 172 million barrels of oil from its emergency reserves this week.
