Trump Waives Shipping Law: Oil, Iran & Israel Impact

President Donald Trump has temporarily waived regulations requiring foreign-flagged ships to be used when transporting oil and gas between U.S. ports, the White House announced Wednesday. The move aims to mitigate rising oil prices amid ongoing tensions related to the U.S.-Israel conflict with Iran.

Trump Administration Waives Jones Act

The 60-day waiver applies to the Jones Act, a 1920 law designed to protect the U.S. shipping industry by preventing foreign vessels from traveling through U.S. waterways with commodities like oil and gas. The White House stated the waiver is “another step to mitigate the short-term disruptions to the oil markets” as the U.S. military pursues objectives in Operation Epic Fury.

U.S. officials have indicated they are aware of continued Iranian oil exports through the Strait of Hormuz, and are “fine with that” given global supply needs. Iran continues to export millions of barrels of oil daily, while also restricting passage for other tankers through the strait.

Oil Exports and Strait of Hormuz Traffic

Iran is currently earning an estimated $140 million per day from oil exports, with at least 13 supertankers carrying a total of 24 million barrels of oil having passed through the Strait of Hormuz since the start of the conflict. While typically over 100 ships transit the strait daily, approximately 90 vessels, including under two dozen oil tankers, have crossed since February 28th. Reports suggest increased passage for Indian and Chinese ships.

At least 16 ships, including tankers and commercial vessels, have been attacked as Iran carries out a blockade in the region, according to reports.

Global Oil Prices Rise

The situation has significantly impacted global oil prices. As of Wednesday morning, Brent crude was trading at $108 a barrel, while U.S. crude was at $97 a barrel. U.S. gas prices have risen to $3.84 a gallon, the highest since September 2023, according to AAA.

Treasury Secretary Scott Bessent stated Monday that the U.S. has allowed Iranian tankers to pass through the strait “to supply the rest of the world,” adding, “We think that there will be a natural opening that the Iranians are letting out, and for now we’re fine with that. We want the world to be well supplied.”

U.S. Military Action and International Alliances

Last week, the U.S. conducted strikes on Iran’s Kharg island, a key oil processing hub, targeting military sites while reportedly leaving oil infrastructure untouched. Trump has been attempting to secure assistance from allies to reopen the Strait of Hormuz.

Following refusals from European allies, including British Prime Minister Keir Starmer, Trump declared on social media that the U.S. does not require assistance from NATO countries, calling the refusals a “very foolish mistake” at a White House press conference Tuesday.