Donald Trump is trying to make it easier for foreign tankers to move around the US, temporarily allowing foreign-flagged ships carrying oil and gas to travel between US ports, the White House announced Wednesday.
The move comes as the president tries to manage a delicate balancing act, attempting to mitigate the increasing price of oil while also carrying out the US-Israel war on Iran.
On Wednesday, Trump issued a 60-day waiver to the Jones Act, a law passed in 1920 as a way to protect the US shipping industry. The law prevents foreign-flagged ships that carry commodities like oil and gas from traveling through US waterways.
In a statement, the White House said the waiver is “another step to mitigate the short-term disruptions to the oil markets as the US military continues meeting the objectives of Operation Epic Fury”.
Earlier this week, US officials said they were aware Iran is exporting oil from the passage, where typically a fifth of the world’s oil passes through, and are “fine with that” given global oil supply needs.
Iran is still exporting oil through the strait of Hormuz as the country continues to ship out millions of barrels while blocking other tankers from the waterway. The country is still earning an estimated $140m a day from its oil exports as at least 13 of its supertankers, carrying a total 24m barrels of oil, have passed through the strait since the conflict began, according to the Financial Times.
Typically, more than a 100 ships would pass through the strait on a daily basis. About 90 ships total, including under two dozen oil tankers, have crossed the strait since the start of the conflict on 28 February. Reports also suggest that Iran is allowing more Indian and Chinese ships to pass through the waterway.
At least 16 ships, including tankers and commercial ships, have been attacked as Iran carries out its blockade, according to the New York Times.
The impact on global oil prices has been major. By Wednesday morning, Brent crude, the global benchmark, was trading at $108 a barrel, while US crude was trading around $97 a barrel. US gas prices at the pump rose to $3.84 a gallon on Wednesday, according to AAA, the highest since September 2023.
The US treasury secretary, Scott Bessent, told CNBC Monday that the US has allowed Iranian tankers to pass through the strait “to supply the rest of the world”.
“We think that there will be a natural opening that the Iranians are letting out, and for now we’re fine with that. We want the world to be well supplied,” he said.
Last week, the US carried out strikes on Iran’s Kharg island, where the vast majority of its oil shipments are processed. The US said that it hit military targets on the island, while leaving its oil and energy infrastructure untouched.
Donald Trump has spent the last few days unsuccessfully pressuring allies to help the US reopen the strait.
After being rebuffed by European allies, including the British prime minister, Keir Starmer, Trump declared on social media that the US does not need assistance from Nato countries. At a press conference in the White House Tuesday, Trump called the refusals for assistance a “very foolish mistake”.
“Everyone agrees with us, but they don’t want to help. And we as the United States have to remember that because we think it’s pretty shocking,” he said on Tuesday.
