- White House reportedly weighing an additional extension of Jones Act waivers as renewed Iran conflict stirs price fears
The Jones Act is a U.S. shipping law formally known as the Merchant Marine Act of 1920. One of its main provisions requires that any cargo transported between two U.S. ports must be carried on ships that are:
- Built in the United States
- Owned by U.S. companies
- Registered under the U.S. flag
- Crewed primarily by U.S. citizens or permanent residents
The law was originally intended to support a strong U.S. merchant marine for both national security and economic reasons.
How it relates to the Iran situation
The connection is about energy supply and fuel prices.
If tensions with Iran disrupt oil or fuel shipments—particularly through the Strait of Hormuz—the U.S. may need to move more crude oil, gasoline, diesel, or LNG quickly between domestic ports.
Normally, the Jones Act limits those shipments to a relatively small fleet of U.S.-qualified vessels. That can:
- Increase shipping costs.
- Slow the movement of fuel from one region of the country to another.
- Contribute to higher gasoline and diesel prices during supply disruptions.
A Jones Act waiver temporarily allows foreign-flagged ships to carry cargo between U.S. ports, increasing available shipping capacity.
With renewed concerns over Iran:
- Oil prices have become more volatile.
- There is a greater risk of supply disruptions or regional shortages.
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Allowing foreign vessels to move fuel domestically could help:
- Keep gasoline and diesel flowing to areas that need it.
- Reduce transportation bottlenecks.
- Ease upward pressure on fuel prices.
For markets, an extended waiver is generally viewed as slightly bearish for oil prices, or at least a measure designed to limit price spikes, because it improves the efficiency of moving energy around the US.
The price of crude oil is trading down $-0.62 at $78.70. The low price today has reached a $78.19. The high prices up at $80.93. The low price from July 14 reached $77.84. That represents the next target followed by the underside of the downward sloping trend line near $77.11 (see the chart below).
In other Iranian news this morning
- US projectile hits Hengam Island
Hengam Island is a small Iranian island in the Persian Gulf, located just 2 km (1.2 miles) south of Qeshm Island and only a short distance from the Strait of Hormuz, one of the world’s most important maritime chokepoints. Although the island itself is small—about 34 square kilometers (13 square miles)—its location gives it outsized strategic significance.
- Hengam sits on the approaches to the Strait of Hormuz, through which roughly 20% of the world’s oil and LNG trade passes.
- The island provides Iran with an observation point over shipping entering and leaving the Persian Gulf.
- While it is not as heavily militarized or economically important as islands such as Kharg or Qeshm, its location makes it part of Iran’s broader defensive network around the Strait of Hormuz.
in other headline news:
- Israel and Lebanon have agreed on the outline and mechanism for withdrawing from the pilot area, which will be finalized and implemented in the coming days. That is good news.
- Iran Foreign Minister spokesperson says US attack on the south of the country is an example of aggression and is completely illegal.
- There are reports of an explosion heard in Kuwait
This article was written by Greg Michalowski at investinglive.com.
