Trump Administration's Jones Act Waiver Could Loosen Fuel Shipping

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Written by Jesse Broehl, Assistant Editor-in-Chief, IIR News Intelligence (Sugar Land, Texas)

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Summary

The waiver would facilitate shipping petroleum products from Gulf Coast to East Coast Ports, changing energy market dynamics, including shipments for transportation fuel, and fuel for oil-fired power plants.

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The Trump administration has waived the Jones Act for 60 days to loosen shipping rules as the Iran war continues, the White House said Wednesday. Waiving the rule would allow foreign vessels to move fuel, among other products, between U.S. ports, helping to ease supply disruptions and potentially lower energy prices. In particular, easier shipment of petroleum products from the Gulf Coast to East Coast ports could be game-changing.

A waiver could substantially change flows of crude, gasoline, fuel oil and other processed product throughout the U.S. because when the Jones Act is in place, there are very few U.S.-flagged, U.S.-built vessels allowed to transport between U.S. ports.

Most prominently, there is also a mismatch between the concentration of U.S. refineries on the Gulf Coast and the more populous East Coast, which has few refineries and where fuel demand and costs are high. There are two pipelines, the Colonial Pipeline and the Plantation Pipeline, that move U.S. fuel between the Gulf and the Northeast. These typically operate at or near full capacity of around 2.3 million BBL/d, according to the U.S. Energy Information Administration (EIA).

All U.S. refineries are shown in the map below and details on each are available for IIR subscribers at this link.

U.S. Operational Refineries as of March, 2026

Source: IIR Energy Global Market Intelligence (GMI). Data at this link for IIR subscribers.

The Jones Act was designed and enacted in the 1920s to protect the U.S. shipbuilding industry. However, it has been controversial and has known side effects. In practice, very few vessels are built in the U.S., creating a major shortage of vessels that can transport fuel between U.S. ports. The few that exist are very old vessels.

Waiver Would Facilitate Shipping Petroleum Products from Gulf Coast to East Coast Ports

Experts from the libertarian Cato Institute say a waiver would more easily allow movement of petroleum products from the Gulf Coast to ports on the East Coast, which has higher fuel costs. "It is helpful. It will provide relief," said Colin Grabow, an associate director at Cato.

For example, only a single Jones Act-compliant crude oil tanker currently serves the East Coast. With additional ships, U.S. refineries could more easily source oil from Texas rather than import it from Libya or Nigeria. According to the Cato Institute, California, which currently imports some fuel from the Bahamas as a costly Jones Act workaround, could obtain it more directly from the Gulf Coast. 

A Jones Act waiver may also have implications for the fast-growing liquefied natural gas (LNG) market. Among LNG tankers, only a single Jones Act-compliant vessel exists, and it is restricted to serving Puerto Rico, according to the Cato Institute.

Implications for U.S. Fuel Oil Power Plants

Increased shipments of petroleum products from the Gulf Coast to the East coast could also change market dynamics in the power plant sector since there are still many plants in the U.S. northeast that run on fuel oil. As shown in the graphic below, there is a greater concentration of power plants (red symbol) and data centers (blue symbol) that use fuel oil as a fuel source. The full list of units is available for IIR subscribers at this link.

U.S. Power Plants and Data Centers that Use Fuel Oil as a Fuel Source

Source: IIR Energy Global Market Intelligence (GMI). Data at this link for IIR subscribers.

Will a 60-Day Waiver Be Extended Indefinitely?

It will be important to see if this temporary waiver is extended beyond the initial 60-day period. The Trump administration has used other temporary emergency measures in other markets, such as 90-day orders prohibiting power plant retirements, and then has gone on to re-up the orders through follow-up extensions

So far, none of the numerous power plant orders have been allowed to expire, creating a de-facto indefinite order. That is a different situation and industry sector altogether to the Jones Act and shipping, but nonetheless is historical administration action worth considering in light of the new waiver.

Key Takeaways

• Trump administration waived the Jones Act for 60 days.
• Waiving the rule would allow foreign vessels to move fuels between U.S. ports.
• A Jones Act waiver would also have implications for the fast-growing liquefied natural gas (LNG) market.
• This could change market dynamics in the power plant sector since there are still many plants in the U.S. northeast that run on fuel oil.
• Likewise, many data centers being developed in the U.S. East Coast run on fuel oil for secondary back-up power and increasingly some for both primary and secondary power.
• The temporary waiver might be extended beyond this initial 60-day period, as the Trump admin has used extensions of other temporary orders in other market sectors.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).