The waiver unleashed a surge in domestic fuel shipments, revealing how the Jones Act constrains US energy flows.

The temporary waiver to the Jones Act, which began on March 17, 2026, has caused a sea change in maritime movements of crude oil and fuel between US producing and consuming regions. The Jones Act limits shipping within US ports to ships that are US-built, US-owned, US-flagged, and US-crewed. As a result, few ships move between American ports.

Among the measures taken to soften the resulting fuel-supply disruption in the United States was a temporary waiver of the Jones Act, first granted for 60 days on March 17, 2026, then extended an additional 90 days on May 18. 

With the temporary waiver set to expire, its renewal, with narrower criteria, was announced on August 9, 2026, with the waiver’s expiration set for November 14, 2026.

Here’s why the United States just extended the waiver. During the months of April and May, shippers sent 377,000 barrels per day of petroleum products to the West Coast, primarily California, from the Gulf Coast. That is almost six times the daily average of January and February. And between March and May, oil was shipped to northeast refineries at twice the rate of the prior three years. 

A Shock with an Identifiable Cause: The Strait of Hormuz

The Strait of Hormuz blockade, a consequence of the ongoing war between Israel and the United States and Iran, has produced the largest energy-supply shock on record, driving shortages and price spikes across hydrocarbons, fertilizer, and helium. Even with an April ceasefire in place, the Strait of Hormuz remains effectively non-functional for commerce: Iran has reopened it only nominally, charging tolls exceeding $1 million per ship and limiting daily traffic to roughly four cargo vessels, against nine during active fighting.

What the Jones Act Actually Costs

The Jones Act, formally Section 27 of the 1920 Merchant Marine Act, requires that cargo shipped between two US points move on vessels that are US-built, US-owned, US-flagged, and US-crewed. The stated goal is to protect domestic shipbuilding and maritime expertise for national security purposes. But is the Jones Act achieving its goals?

The price of that protection is steep: according to statistics from Balsa Research and the Grassroot Institute of Hawaii, US domestic waterborne freight accounts for 4 percent of total freight moved, whereas US road freight accounts for 67 percent. In the European Union (EU), waterborne freight is 28 percent of total, and EU road freight makes up 53 percent. 

Shipping costs from Jacksonville, Florida, to San Juan, Puerto Rico, are 23 cents per ton-mile; in the EU, from the Netherlands to Spain, it ranges from 6 to 12 cents. By comparison, long-haul trucking costs range between 9 and 11 cents in the United States.

Petroleum product shipments on Jones Act tankers cost $89,000 per day; on internationally flagged tankers, $9,000 per day.

A comparable tanker costs about $240 million to build in the United States versus roughly $50 million elsewhere. The number of large ocean-sailing vessels on order in Japan at the end of 2025 was 663, but in the United States it was just 15.

Maritime employment has remained stagnant: there were 273 thousand maritime employees in 1990 compared to 215 thousand in 2023, with appreciable change trending downward in the intervening years. 

What the 2026 Jones Act Waiver Has Revealed

The West Coast received a historic surge of fuel it couldn’t access before. East Coast refineries received crude oil traveling shorter distances from Gulf Coast ports rather than foreign destinations further away. Consider the possibility of US LNG being received at New England destinations.

Naturally, the regions and hydrocarbon movements that surged most under the waiver are exactly those the Jones Act suppresses. The waiver didn’t create new demand—it revealed demand the law had been impeding. If there is this much demand, consider the possibility of an increase in maritime jobs with the absence of the Jones Act.

With national gasoline prices still running above $4 per gallon, the Trump administration has extended the waiver again, with Secretary of Energy Chris Wright saying the waiver “had resulted in lower energy prices in California and on the East Coast.”

But opposition to the Jones Act waiver is organized on both economic and security grounds. Maritime industry groups argue the waiver has shifted domestic commerce to foreign operators. With President Donald Trump’s renewal of the decision, the West Coast and East Coast should continue to benefit considerably from the waiver. 

About the Authors: Max Pyziur and Matthew Sawoski

Max Pyziur is EPRINC’s research director for downstream, transportation fuels, electricity, and natural gas programs. Previously, he held senior analytical roles at PIRA Energy and CPM Group, both commodities market consultancies. He received his MBA from Washington University in St. Louis, and his BA from St. Louis University. He can be reached at MaxP@eprinc.org.

Matthew Sawoski is a senior research analyst at EPRINC, focusing on national and energy security. He leads EPRINC’s work in modeling and AI. He received his BA in advanced mathematics with a minor in history from the University of Michigan. He can be reached at MatthewS@eprinc.org.

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