President Donald Trump extended his waiver of the Jones Act for another 90 days on Monday while narrowing its scope, a move designed to keep fuel flowing to American consumers as the Iran war continues to disrupt global oil markets just months before midterm elections. The extension marks the third time Trump has suspended the century-old shipping law since the U.S. and Israel launched heavy strikes on Iran less than three weeks before his first waiver on March 17.
The latest extension will apply only to vessels hauling certain energy resources, a White House official told CNBC. It'll also require the Pentagon to consult with the U.S. Maritime Administration and determine if the waiver applies to each individual shipping voyage. The new limitations address concerns from the U.S. maritime industry, according to the official.
Energy Security Amid Global Turmoil
Trump's decision comes as oil prices jumped about 5% Monday on growing doubt that Washington and Tehran will reach a deal to increase ship traffic through the Strait of Hormuz. U.S. West Texas Intermediate futures climbed about 5% to close at $82.13 per barrel. Brent crude, the international benchmark, also settled around 5% higher at $87.72 a barrel.
Kristin Whitman, senior vice president of government relations at the American Petroleum Institute, said in a statement, "We commend the administration's leadership in extending the Jones Act waivers, a critical action that will keep American energy moving, strengthen supply security and help protect consumers from unnecessary price volatility." Whitman added, "This decisive step will ensure critical fuels reach the regions that need them most while reinforcing America's resilience amid ongoing global market disruptions."
Since Trump first waived the law, 210 voyages have been completed that otherwise would have been deemed unlawful, according to Maritime Administration data. The majority of these vessels were hauling gasoline and crude oil. Cato, citing that data, calculates that nearly 55 million barrels of cargo in total have been shipped by utilizing the waivers.
Blockade Strategy Over Airstrikes
President Trump told Axios on Sunday that the U.S. is "only semi-negotiating" with Iran, after he insisted last week that Washington and Tehran were in fact holding talks. Trump indicated that he would rely on the U.S. naval blockade to pressure Tehran rather than another wave of airstrikes. He said, "We are just watching Iran with its huge inflation and the fact they have no money."
Trump canceled a planned attack against the Islamic Republic on Aug. 1 to allow for negotiations. Iran's Foreign Ministry spokesman, Esmail Baghaei, said Monday that the U.S. must lift its blockade before Tehran would agree to fully open Hormuz. Baghaei said, according to the state news agency Tasnim, "As long as the U.S. naval blockade continues, the necessary conditions for the reopening of the Strait of Hormuz do not exist." He said Iran and Oman are holding bilateral negotiations over shipping routes in the strait.
Trump often boasts that the U.S. naval blockade on Iranian ports has crippled the country economically. He told Axios Iran "is in very bad shape" as a result of the blockade.
Compensation Demands and Hardened Positions
In an Aug. 10 post on Truth Social, Trump countered Iran's demand for financial compensation by saying he's "likewise demanding compensation from Iran" for all the people killed or injured by Iranian attacks over the years. He said Iran should also compensate families of innocent protesters killed by the Iranian regime over the past half-century. Trump wrote, "I have instructed my representatives to put this firmly into any, and all, future negotiations."
Trump's position marked a major shift from Aug. 3, when he warned Iran he was giving it one final opportunity to agree to a peace deal or risk "decapitation." At the time, Trump said he decided to hold off on ordering what would have been "the biggest attack since World War II" at the request of Saudi Arabia, the United Arab Emirates and Qatar. He later said, "It will work out. It always works out. It's like a chess game," referring to the back-and-forth with Iran.
The U.S. and Iran signed a memorandum of understanding on June 17 to open Hormuz to commercial ships, but the deal quickly collapsed as fighting erupted over which routes vessels could use. Iran launched multiple attacks on tankers transiting Hormuz along Oman's coast under U.S. military protection. Tehran demanded that ships sail through its territorial waters when transiting the strait. The U.S. staged multiple waves of airstrikes and reimposed its naval blockade in retaliation for the tanker attacks.
White House spokeswoman Taylor Rogers said the Trump administration took the step "to ensure our military and key industries maintain uninterrupted access to critical resources." Rogers said, "Data shows the waiver has driven a significant increase in domestic deliveries of essential products such as gasoline, diesel, and jet fuel. President Trump continues to take bold, commonsense action that protects and strengthens America's economic and national security."
The Jones Act is a 1920 law requiring that the transport of goods between American ports be conducted by U.S. vessels. It was intended as an effort to grow the domestic shipping industry after World War I. Some economists, including those at the libertarian Cato Institute, argue the Jones Act is an outdated form of protectionism.
The White House said the president was aboard Air Force One as he left a NATO summit, but The Washington Post reported that his departure included an elaborate ruse that concealed his travel. The Post said an Iranian assassination threat against President Donald Trump prompted an extraordinary operation last month in which he flew secretly from Turkey on an alternate military aircraft while the White House said he was aboard Air Force One.
Why This Matters:
Trump's continued suspension of the Jones Act demonstrates how military conflict directly impacts domestic energy markets and consumer prices. The administration's willingness to waive protectionist shipping regulations reflects the economic reality that regulatory flexibility can be essential during national security crises. With nearly 55 million barrels of cargo moved through these waivers, the policy has tangibly increased fuel supply at a time when oil prices are climbing above $82 per barrel. The narrowing of the waiver shows the administration attempting to balance energy security with domestic maritime industry concerns. Meanwhile, Trump's economic pressure campaign through the naval blockade offers an alternative to costly military escalation, letting Iran's inflation and financial crisis do the work. As midterm elections approach, voters will judge whether this strategy successfully protects American interests while keeping fuel flowing and prices manageable.