Key insights
- A potential extension of the Jones Act waiver by President Trump could ease domestic oil shipping constraints. This aims to maintain stable gasoline prices amidst ongoing geopolitical tensions with Iran. While a ceasefire reduces immediate escalation risks, uncertainty around future peace talks and the Strait of Hormuz blockade persists, creating a slightly bullish signal for US equities by potentially stabilizing energy costs.
Investing.com-- U.S. President Donald Trump is considering extending a waiver allowing foreign-flagged cargo ships to move fuel and other goods across domestic ports, Axios reported on Tuesday evening.
Trump had in March issued a 60-day waiver on the Jones Act– a 1920 law that raises the cost of shipping between U.S. ports by foreign-flagged vessels– in a bid to increase domestic oil shipping and offset the impact of higher gasoline prices due to the Iran war.
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He is now considering extending the waiver, Axios reported, citing U.S. officials. The waiver allows vessels to ship oil from major crude producing regions to other parts of the U.S., helping keep domestic markets well-supplied.
The Axios report comes amid growing concerns over prolonged energy market disruptions from the Iran war, after Trump on Tuesday indefinitely extended a ceasefire with Iran.
While the move does point to fewer chances of an escalation in the conflict, it also left future peace talks largely unclear, while a blockade in the Strait of Hormuz remained in place.
U.S. gasoline prices surged some 40% in March with the onset of the Iran war, but tempered some gains in April amid hopes for a lasting peace deal.