White House Considers Easing US Shipping Rules to Combat Fuel Price Spike

As gas prices surge and global oil markets convulse from the Iran war, the White House reaches for an obscure maritime statute — and touches the third rail of U.S. shipping policy.

The price Americans pay at the pump has jumped 25% since January. Crude oil has nearly doubled from its pre-crisis lows. And in a scramble to stem the bleeding, the Trump administration is preparing to temporarily suspend one of the oldest protectionist laws on the books: the Merchant Marine Act of 1920, better known as the Jones Act [1][2].

White House spokeswoman Karoline Leavitt confirmed on March 12 that the administration 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" [3]. Industry sources say the oil sector has already been told to prepare for 30-day waivers that would allow foreign-flagged tankers to transport oil, gasoline, diesel, liquefied natural gas, and fertilizer between American ports [4].

The move marks one of the most aggressive domestic policy responses yet to a crisis that began on February 28, when U.S. and Israeli forces struck Iran, killing its Supreme Leader and triggering a retaliatory campaign that has effectively shut down the Strait of Hormuz — the narrow waterway through which roughly one-fifth of the world's oil supply flows [5][6].

The Price Shock

The numbers tell a stark story. WTI crude oil, which traded near $65 per barrel in late February, rocketed past $94 by March 9 — a 45% increase in less than two weeks [7]. The national average price of regular gasoline hit $3.60 per gallon by March 12, up roughly 60 cents since the conflict began and 25% higher than January's low point of $2.78 [3][8].

Source: FRED / U.S. Energy Information Administration

Data as of Mar 11, 2026CSV

Regional variations are even more dramatic. California drivers are paying an average of $5.20 per gallon, while Washington state has seen prices climb to $4.63 [9]. Diesel prices have surged 40%, hammering the logistics industry and threatening to push consumer prices higher across the board [8].

"Gas prices could set new all-time highs by the end of March," warned one Yahoo Finance analysis, noting that the combination of Hormuz disruptions and seasonal refinery maintenance could push national averages past the $5 mark [10].

Source: FRED / U.S. Energy Information Administration

Data as of Mar 10, 2026CSV

The University of Michigan Consumer Sentiment Index has already shown the damage, with mid-March readings stagnating in the mid-50s — roughly 20% lower than the same period last year — as middle- and lower-income families scramble to prioritize fuel and groceries over discretionary spending [11].

What Is the Jones Act?

The law at the center of this debate is a century-old statute that most Americans have never heard of. Section 27 of the Merchant Marine Act of 1920 requires that all goods shipped between U.S. ports be carried on vessels that are U.S.-built, U.S.-flagged, U.S.-owned, and primarily crewed by U.S. citizens [12].

In practice, this means that a tanker carrying gasoline from refineries on the Gulf Coast to consumers in New York or New England must be an American ship with an American crew — even if foreign vessels could do the job more cheaply. The law was originally enacted to ensure the United States maintained a robust domestic merchant marine capable of serving national defense needs [12].

Waiving it is exceedingly rare. The most recent precedents include a 2022 waiver after Hurricane Fiona knocked out power in Puerto Rico, allowing a foreign tanker carrying 300,000 gallons of diesel to dock, and a 2021 waiver following the Colonial Pipeline cyberattack [13]. Trump himself waived the Jones Act for Puerto Rico in 2017 after Hurricane Maria, though that waiver lasted only 10 days [13].

The Administration's Multi-Pronged Response

The Jones Act waiver is just one piece of a broader emergency response. On March 11, the Trump administration announced it would release 172 million barrels from the Strategic Petroleum Reserve — the largest single U.S. drawdown ever — with deliveries beginning within a week and stretching over 120 days [14]. Energy Secretary Chris Wright said the administration plans to replenish the reserve with 200 million barrels within the next year [14].

The SPR currently holds approximately 415 million barrels, about 58% of its authorized 714-million-barrel capacity [15].

Internationally, the response has been equally historic. The International Energy Agency coordinated a collective release of 400 million barrels from member nations' strategic reserves — the largest in the IEA's 50-plus-year history [16]. Despite these interventions, oil prices have remained stubbornly elevated. Brent crude was still trading above $100 per barrel as of March 12 [16].

Will the Waiver Actually Lower Prices?

This is where the debate turns contentious — and where the data gets complicated.

Critics of the Jones Act have long argued that the law inflates domestic shipping costs by restricting competition. The Cato Institute has called it "a burden America can no longer bear" [17]. Sen. Mike Lee (R-UT) and Rep. Tom McClintock (R-CA) introduced the Open America's Waters Act in June 2025, which would repeal the Jones Act entirely, arguing that "outdated regulations have deepened the energy crisis and heightened prices for Americans" [18].

Libertarian outlet Reason went further, arguing in a March 10 editorial that "Trump may waive the Jones Act for oil shipments. Let's repeal it instead" [19].

But the shipping industry pushes back with hard numbers. A detailed analysis published by gCaptain, a leading maritime industry publication, argues that current global tanker market conditions mean foreign vessels would actually cost more than Jones Act ships to move fuel domestically [20].

The data: the 2026 Worldscale flat rate for a Houston-to-New York voyage is $10.88 per tonne, with current market rates at WS410 — equivalent to $44.61 per tonne, or roughly 14.5 cents per gallon. The same voyage on a Jones Act tanker costs approximately 13.5 cents per gallon [20]. For a Houston-to-Fort Lauderdale run, the foreign-flag option costs about a penny more per gallon than the domestic alternative.

"Substituting a foreign-flag tanker on a domestic route currently served by a Jones Act tanker would more than likely result in an increase in the delivered cost of fuel," the analysis concludes, urging policymakers to base decisions on "market realities" [20].

Colin Grabow, associate director at the Cato Institute's trade policy center — hardly a Jones Act defender — conceded that while waiving the act could help, "the impacts are apt to be limited" [20].

The real potential benefit, analysts say, may not be in cost savings per gallon but in capacity. With global tanker markets strained by the Hormuz crisis, opening U.S. coastal routes to the international fleet could increase the total volume of fuel reaching East Coast refineries and consumers, even if the per-unit shipping cost remains similar.

The Union Backlash

Maritime unions have responded to the waiver talk with fury. The Seafarers International Union, the Marine Engineers' Beneficial Association, and other labor groups have called the proposed waivers "illegal, unjustified, and unnecessary" [21].

Their argument rests on both legal and economic grounds. The Jones Act, they contend, supports approximately 650,000 American jobs in shipbuilding, vessel operations, and related industries. A waiver — even a temporary one — could undermine the domestic fleet by allowing foreign operators with lower labor costs to capture market share that American companies may never reclaim [21].

The American Maritime Partnership, the industry's primary lobbying group, has also pushed back sharply, arguing that the domestic fleet has sufficient capacity to meet current demand and that the crisis is one of global supply, not domestic shipping logistics [22].

The political dynamics are complex. The Jones Act has historically enjoyed bipartisan support — both Trump and Biden publicly backed it during their respective administrations [23]. Maritime unions represent a constituency that both parties court, and the law's protections are particularly important in swing states with significant shipbuilding industries, including Virginia, Mississippi, and Louisiana.

The Bigger Picture: A 106-Year Debate

The current crisis has amplified a policy debate that has simmered for decades. Free-market economists and energy industry executives have long argued that the Jones Act drives up costs for American consumers, particularly in energy-dependent regions like New England, Hawaii, and Puerto Rico. One frequently cited example: Massachusetts and Puerto Rico have had to import liquefied natural gas from Russia because no Jones Act-compliant LNG carriers exist [18].

The National Taxpayers Union Foundation has pointed to a "Jones Act paradox" — a law deemed "essential" for national security that is nevertheless "so frequently waived" in emergencies, suggesting the statute's costs outweigh its benefits in normal times as well [24].

Defenders counter that the law's national security rationale is more relevant than ever. With geopolitical tensions rising and global shipping lanes under threat, they argue, the last thing the United States should do is weaken its domestic maritime capacity by opening the door to foreign competition.

Project 2025, the Heritage Foundation-backed conservative policy blueprint, proposed initiating Jones Act waivers "whenever possible" and pursuing Congressional repeal [19]. Whether the current crisis provides the political catalyst for more permanent reform remains to be seen.

What Comes Next

The White House has emphasized that "this action has not been finalized" [3], leaving the door open for continued negotiation with stakeholders. If the waivers are issued, they would likely take effect within days and last 30 days, with the possibility of extension depending on market conditions.

The administration faces a difficult balancing act. Gas prices are a potent political issue — Trump himself dismissed the surge as "a little glitch" related to the Iran conflict, but the potential political costs of sustained high prices loom large heading into the 2026 midterm elections [25].

Meanwhile, the underlying crisis shows no signs of abating. Iran's Islamic Revolutionary Guard Corps has vowed that "not a litre of oil" will pass through the Strait of Hormuz [6], and Gulf state oil production has fallen by a reported 6.7 million barrels per day [5]. Even with historic reserve releases and potential Jones Act waivers, the fundamental supply constraint — a blocked chokepoint carrying 20% of global oil — remains unresolved.

The Jones Act waiver, whatever its merits, is a band-aid on a wound that only diplomacy or military resolution can ultimately close. But in the meantime, as Americans watch the numbers climb at the pump, every tool in the policy toolkit is being put on the table — including a 106-year-old shipping law that most people learned about for the first time this week.