White House Extends Jones Act Waiver as Executives See Prolonged Hormuz Disruption

The Trump administration has extended a key shipping waiver for 90 days, allowing foreign-flagged vessels to transport energy commodities between U.S. ports through mid-August, according to Rigzone. The move is a direct effort to counter supply disruptions tied to the ongoing war with Iran, which has blocked the Strait of Hormuz.

The waiver temporarily suspends requirements of the 1920 Jones Act, enabling ships to move coal, crude oil, refined products, natural gas, and fertilizers domestically. A White House spokeswoman said the extension "provides both certainty and stability for the U.S. and global economies," Rigzone reported. The extra time is expected to immediately help U.S. refiners seeking waterborne crude shipments.

The extension comes as oil market stability hinges on the reopening of the Strait of Hormuz, a critical chokepoint currently closed by the conflict. According to an updated Dallas Fed Energy Survey, most oil and gas executives expect a prolonged disruption. The survey, conducted from April 15-20, found 39 percent of 99 responding executives expect traffic to return to normal by August, while 26 percent see a return by November, and 14 percent expect it even later.

Furthermore, a majority of executives believe future disruptions are likely. When asked how likely geopolitical events would disrupt the strait again within five years after it reopens, 48 percent of 112 respondents said it was "very likely," and 38 percent said "somewhat likely," the Dallas Fed update outlined.

The market is reacting to the fading hope of a quick resolution. SEB analyst Ole R. Hvalbye noted in a report Friday that the assumption of a May 1 reopening is "slowly falling apart," Rigzone reported. He warned that every week of delay beyond that date theoretically adds about $5 per barrel to the rest-of-year average price for Brent crude, which was at $106.3 per barrel Friday morning.

The sustained disruption is also expected to permanently increase shipping costs from the Persian Gulf. A Dallas Fed survey question revealed the most common expectation among 70 executives is for costs to increase by "more than $2 but not more than $4" per barrel once the conflict ends.

For Bakken operators, the extended domestic shipping waiver provides logistical flexibility to move crude to coastal refineries if economics favor it. However, the prevailing industry view of a protracted global supply crisis, underscored by the survey data and analyst warnings, suggests a sustained high-price environment driven by structural constraints, not just temporary war risk.