Gulf Coast supplies 70% of cargo under shipping waiver
Foreign vessels transported more than 31 million barrels of fuel and chemicals between U.S. ports in the first 90 days after President Trump suspended the Jones Act, according to Maritime Administration data compiled by The Wall Street Journal.
The 1920 law, which restricts domestic shipping to American-made, crewed, and flagged vessels, was suspended for 150 days starting in March as part of the administration’s effort to tame fuel costs during the Iran war. The data tracks the supply routes that have emerged since the suspension took effect in March.
About 67% of the cargo moved under the waiver was refined products such as gasoline, diesel, and jet fuel, while 26% was crude oil. Other shipments included propane, fertilizer, and bitumen.
More than 70% of the shipments originated on the Gulf Coast, home to more than half of U.S. refining capacity. The most popular destination was California, which has the highest gasoline prices in the country and historically depends on Persian Gulf imports. Gasoline was shipped to California from refineries in Texas, Louisiana, and Washington.
Intrastate routes also emerged. Crude oil moved from Los Angeles, where pumpjacks bob around the city, to a refinery near San Francisco. That refinery sent fuels back to Los Angeles, where gasoline prices are roughly 40% above the national average.
Jones Act opponents point to Puerto Rico as a prime example of the law’s cost. The island received 19 cargoes of gasoline, diesel, jet fuel, and propane. Alaska, which ships most of its oil output abroad and faces higher energy prices, received four cargoes, mostly jet fuel.
The waiver has intensified debate over the law’s future. Rep. Salud Carbajal (D., Calif.) said at a Maritime Administration budget hearing last month, “I’m concerned that if this extended waiver is allowed to continue, we will quickly become fully and needlessly reliant on foreign ships—owned and crewed by foreign companies—for our economic security.”
On Tuesday, 52 Republican lawmakers signed a letter asking Trump not to extend the waiver period. Proponents of the Jones Act say the law protects U.S. shipyards from cut-rate competition and leaves them available to the military.
Opponents say the law raises fuel costs and has produced situations where it is more economical to send crude abroad for processing and import refined fuel back than to move barrels between domestic ports. They cite the example of Phillips 66, which used a Jones Act waiver to move North Dakota crude from its export terminal in Beaumont, Texas, to New York City and eventually its refinery in New Jersey.
Brian Mandell, a Phillips 66 executive, told investors in April, “We displaced international crudes with domestic grades into our refining system and sold the international barrels into tight overseas markets.”
Jones Act opponents are using such examples to lobby Congress to repeal the law, warning that the supply routes that have emerged will disappear the moment the suspension ends. They are running up against lawmakers aligned with shipbuilding interests who have asked the Trump administration to provide a defense rationale for each voyage and argue that lifting Jones Act requirements did little to reduce prices at the pump.