White House extends shipping waiver to August

President Donald Trump’s administration has given a 90-day extension to a shipping waiver making it easier to move oil, fuel and fertiliser around the US, marking the latest effort by the White House to counter supply disruptions tied to the Iran war.

The decision adds about three more months to the existing waiver that had been set to expire May 17, enabling foreign-flagged vessels to move commodities between American ports through mid-August.

Normally, under the 1920 Jones Act, goods carried by water between domestic ports must be transported on US-flagged, -built and -owned ships. Trump’s exemption temporarily removes those restrictions for coal, crude oil, refined petroleum products, natural gas, natural gas liquids, fertilizer and other energy derivatives.

The initial waiver applied to some 659 specific products identified by US Customs and Border Protection, and the covered goods were not scaled back with the extension.

“This waiver extension provides both certainty and stability for the US and global economies,” said Taylor Rogers, a White House spokeswoman. “The Trump administration has taken several actions to mitigate short-term disruptions to the energy markets, and this extension will help ensure vital energy products, industrial materials and agricultural necessities are maintained.”

The waiver issued in March has already been used by ships transporting an array of goods — including renewable diesel, crude oil, ammonia, ethanol and gasoline. Cargoes covered by the waiver have been shipped across the US, with deliveries in California, Florida, Pennsylvania and South Carolina, among other states, according to reports filed with the US government.

The administration is taking the step of extending the waiver three weeks before its expiration to allow ample time for the maritime industry to ensure sufficient vessels are available to keep moving applicable goods to where they are needed, a White House official said.

The effective closing of the Strait of Hormuz during the war has pulled some 13 million barrels of crude oil and refined product supplies from the world market each day. It has caused prices for crude and fuels made from it to climb, and sent buyers rushing to find supplies that can fill the shortfall.

The extra time is expected to immediately help US refiners seeking waterborne shipments of crude and beginning to book cargoes for delivery in July.

The initial waiver was issued at the request of the Defense Department. Under five-year-old changes Congress made to bolster the Jones Act, waivers sought by the department can only be issued when the government finds that otherwise there are insufficient qualified vessels to meet national defense needs and that the exemptions are essential to address an immediate, adverse effect on military operations.

The action is one of a number of steps Trump has taken to blunt elevated fuel prices — and address growing supply concerns — with the US and Israeli war against Iran setting off a global energy crisis. The administration has also temporarily waived some domestic fuel specifications and sanctions for some waterborne Russian crude.

Trump and other top US officials have predicted crude and gasoline prices will fall after the Iran war ends. Yet the current spike creates political peril for the president, coming months before midterm elections in November that will determine control of Congress — and, in turn, much of his legislative agenda.

Advocates for the waiver, including oil industry representatives, had lobbied for an extension, telling the administration the relief has made it easier to access fuel and oil supplies — and nimbly pivot to new options when necessary.

Jones Act supporters, however, have long warned against exemptions they say undercut the law’s goal of protecting American shipbuilding and maritime might. Extending the waiver undermines the law and signals American ships can be sidelined, driving away long-term investment in the industry, said Aaron Smith, president of the Offshore Marine Service Association.

“A waiver extension sells out our American maritime industry and the foundation of our Navy to benefit oil traders and foreign shippers,” Smith added.

Trump administration officials have said, without providing further details, that the waiver will not affect American shipbuilding.

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