President Donald Trump is wasting no time getting ahead of what is all but certain to be a long, extended period of Middle East volatility for shipping – especially for oil. This week, the U.S. government preemptively extended the waiver put in place earlier this year against the Jones Act, a long-standing U.S. law that required only U.S.-flagged vessels to move goods and commodities to and from U.S. ports.
Waiver extension specifics
The previous waiver was set to expire on May 17th, and the White House’s extension keeps the waiver in place through at least the middle of August 2026. As a result, oil will be able to keep being transported on foreign-flagged vessels into and from U.S. ports.
Without a waiver, the Jones Act would have severely restricted oil movements worldwide, as the U.S. is a dominate trade partner globally. And if the extension was announced closer to the previous May 17th expiration date, shippers would have scrambled to change vessels, schedules, routing, and more. By announcing the waiver nearly a month in advance, the Trump administration has made continuing existing routings and schedules easier to plan out as we get closer to summer.
The latest in the Strait of Hormuz
Iran and the U.S. have traded words publicly, even as the fragile ceasefire between Israel and Lebanon has stayed in place. The U.S. has left the door open for further direct talks with the Iranian government, although no dates are set in stone as of the date of this article.
The U.S. Navy has continued its week-long blockade of the Strait of Hormuz, even as Iran has increased pressure on the U.S. by threatening and engaging with select vessels in the strait. The U.S. and Iran are locked in a continuing standoff in the Strait of Hormuz. The U.S. has announced that another oil tanker was boarded, after the U.S. identified what it said was Iranian oil being smuggled. For its part, Iran said it seized two vessels this week.
What’s next for shipping in the Middle East?
Tehran is demanding the U.S. drop its naval blockade of the Strait of Hormuz before resuming direct talks with the U.S. – a demand that the U.S. has continued to rebuff fearing further reprisal, attacks, and other disruptions from the Iranian government. As a result, there is no clear path towards the Strait of Hormuz opening up safely for a while. Oil prices are likely to stay high, and vessels will continue extraordinary maneuvers to push back against these disruptions.
The Jones Act waiver is a small step to ease oil movement around the world, but the fact remains that only lasting peace will fully resolve shipping movements in the Middle East. The U.S. and Iran remain far apart, so there’s no telling when there will be a return to even a semblance of normalcy in the region.
