- The Merchant Marine Act of 1920, commonly called the Jones Act, is a U.S. federal law that regulates maritime commerce within the United States.
- The law requires that domestic shipping between U.S. ports be done only by American-built, American-owned, and American-crewed ships.
- Meanwhile, U.S. Energy Secretary Chris Wright said that the U.S. Navy is not ready yet to escort oil tankers through the Strait of Hormuz amid an intensifying Iran war.
The Trump administration is reportedly planning to issue temporary waivers for the Jones Act amid soaring crude oil prices due to the Iran war.
According to a Bloomberg report citing people familiar with the matter, the waivers would be valid for 30 days, allowing foreign tankers to supply East Coast refiners with fuel from the Gulf Coast and other parts of the U.S.
This comes at a time when crude oil prices have once again soared past the $ 100-per-barrel mark.
U.S. West Texas Intermediate (WTI) crude futures maturing in April soared more than 10% per barrel before shedding some of the gains to hover around $96 a barrel. Brent crude futures expiring in May surged more than 10% to $101.53 before losing some steam to hover around $101 a barrel.
The United States Oil Fund ETF (USO) gained over 9%, while the ProShares Ultra Bloomberg Crude Oil ETF (UCO) was up about 8% at the time of writing.
What Is The Jones Act?
The Merchant Marine Act of 1920, commonly called the Jones Act, is a U.S. federal law that regulates maritime commerce within the United States. It is named after its sponsor, Senator Wesley Jones.
According to Section 27 of the Jones Act, goods transported between two ports in the country must be carried on ships that are built in the United States, owned by U.S. citizens or U.S. companies, registered under the U.S. flag, and crewed primarily by U.S. citizens or permanent residents.
Waiving the Jones Act would allow foreign ships to carry fuel between U.S. ports, which could increase the delivery speeds while potentially lowering costs.
Iran’s New Supreme Leader Says Strait Of Hormuz Will Stay Closed
Mojtaba Khamenei stated on Thursday that the Strait of Hormuz will remain closed, in his first remarks as Iran’s new Supreme Leader.
He also warned in a televised address that Iran will attack all U.S. bases in the region if they are not shut.
Meanwhile, U.S. Energy Secretary Chris Wright said that the U.S. Navy is not ready yet to escort oil tankers through the Strait of Hormuz amid an intensifying Iran war.
“We’re simply not ready. All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities,” he said.
U.S. equities declined in Thursday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 1.03%; the Invesco QQQ Trust ETF (QQQ) fell 1.26%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 1.01%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘bearish’ territory.
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