Oil Gains on Hormuz Tensions as Jones Act Waiver Extended

Oil prices extended gains for a fourth consecutive session on Tuesday as market skepticism grew over a quick resolution to supply disruptions involving the Strait of Hormuz, according to Rigzone. The uncertainty supports a firmer global price environment for Bakken crude.

Despite the tensions, a key supply mechanism involving shuttle transits through the strait continues to function, Rigzone separately reported. At least a dozen ships have switched to loading oil outside the immediate chokepoint, helping to maintain some flow of Middle Eastern crude to global markets.

Domestically, President Donald Trump has extended a waiver of the Jones Act for 90 more days, Rigzone reported. The law typically requires cargo shipped between U.S. ports to be carried on American-built, -owned, and -crewed vessels. The extended waiver allows foreign ships to transport oil and other commodities around U.S. coasts.

However, the waiver has been narrowed with new limits, according to the report. The specifics of these limits were not detailed, but a more restricted waiver may offer less flexibility for domestic crude and product shipments compared to previous versions.

For Bakken operators and royalty owners, the dual developments present a mixed picture. Sustained higher global oil prices, driven by geopolitical risk, directly benefit the economics of production in North Dakota. The Bakken formation is a price-taker in the global market, and any upward pressure on benchmarks like WTI and Brent crude improves cash flow and drilling incentives.

The extended Jones Act waiver, even in a narrowed form, provides some continued relief for coastal shipping logistics. It can help alleviate bottlenecks and reduce costs for moving refined products or crude between U.S. regions, including to and from storage hubs. However, the new limits may constrain its utility, keeping focus on pipeline and rail capacity as the primary outlets for Bakken crude to reach premium markets.