The US government plans to suspend the Jones Act of 1920 in a bid to control rising oil prices amid the closure of the Strait of Hormuz, a critical passage through which much of the world’s oil supply passes.
According to people familiar with the matter, who were not authorized to discuss the issue publicly, the Trump administration plans to issue a 30-day waiver to the century-old maritime oil law.
According to the official document available on the US Customs and Border Protection website, the Jones Act, part of the Merchant Marine Act of 1920, states that the transportation of goods between US coastal points, either directly or through a foreign port, is reserved for vessels built, owned and documented in the US.
In simpler terms, it states that only ships built in the United States are authorized to transport goods between US ports.
Its suspension will allow foreign vessels to help supply fuel to the East Coast from the Gulf Coast and other parts of the US.
The development comes amid rising oil prices after Iran closed the Strait of Hormuz following joint US-Israeli military strikes.
Iran has responded with missile attacks against Israel and US bases in the Middle East.
The closure of the key oil trade route has already had several impacts on the global oil trade and economy.
Earlier, the International Energy Agency (IEA) announced the historic release of 400 million barrels of oil from its strategic reserves to address shortages caused by supply disruptions.
