Jones Act Waiver Fails to Boost U.S. Fuel Supply

A 60-day waiver of the Jones Act, implemented on March 17, aimed to alleviate U.S. fuel price surges by increasing shipments between domestic ports. However, trade data from March indicates this measure has not boosted U.S. oil flows between coastal markets. Crude oil, refined products, biofuels, and liquid chemical shipments between U.S. ports remained largely unchanged from February.

Instead of serving domestic markets, U.S. fuel exports achieved a record high last month. Refiners exported more fuel from the U.S. Gulf Coast to Asia and Europe, and even reversed traditional flows by exporting from the U.S. East Coast to Europe. This trend is driven by greater profitability from international sales, as European and Asian markets face tighter supplies due to geopolitical events.

Ship owners are also benefiting from longer, more profitable journeys to Asia, where refiners are actively seeking U.S. crude to replace Middle Eastern supply. This increased demand for vessels has significantly tightened the U.S. Gulf Coast tanker market and driven up freight rates, rendering the Jones Act waiver less impactful on domestic shipping costs.