Jones Act Waiver Reshapes U.S. Oil Trade as Foreign Tankers Flood Domestic Routes

The Trump administration’s emergency Jones Act waiver is rapidly reshaping U.S. oil flows, opening domestic shipping routes to foreign-flagged tankers and triggering trade patterns rarely seen in modern American energy markets.

New analysis from RBN Energy shows at least 60 waiver-approved shipments have moved crude oil and refined products between U.S. ports since the White House suspended key Jones Act restrictions in mid-March following the Strait of Hormuz crisis. The waiver has since been extended through August 17.

The result is that foreign tankers are now functioning as an extension of the U.S. domestic fuel distribution system.

More than 3 million barrels of gasoline, diesel, jet fuel and crude oil have already moved into California alone, according to RBN, while additional Gulf Coast cargoes are flowing to the East Coast, Florida and Puerto Rico.

“This isn’t a one-off cargo here or there,” the RBN analysis states. “It’s dozens of foreign-flagged vessels moving crude oil and refined products around the country.”

California Supply Crunch

California has emerged as the clearest example of how the Hormuz crisis is reshaping U.S. energy logistics.

The state imported roughly 230,000 barrels per day of Middle Eastern crude last year, according to Kpler, leaving refiners exposed after Gulf shipping disruptions cut access to Persian Gulf supplies. At the same time, California has lost roughly 575,000 barrels per day of conventional refining capacity since 2020 following refinery closures and renewable fuel conversions involving Phillips 66 and Valero Energy facilities.

Earlier this month, California saw the arrival of the New Corolla, reported to be the final California-bound Iraqi crude tanker to depart the Persian Gulf before hostilities erupted in late February.

“This oil tanker signals how the conflict in Iran is reshaping shipping routes and raising the cost of gas and virtually everything consumers buy,” Dr. Noel Hacegaba of the Port of Long Beach said at the time. “With about 20% of our oil coming from the Middle East, we are closely monitoring impacts on California’s oil supply.”

Foreign-flagged tankers are now helping backfill that shortfall.

Among the largest shipments tracked by RBN was the Singapore-flagged Pelican Pacific, which transported 322,000 barrels of gasoline blendstock from Houston to Los Angeles. The Singapore-flagged Solar Claire completed multiple fuel deliveries from Texas Gulf Coast refineries into California, while the Marshall Islands-flagged Garnet Express carried nearly 300,000 barrels of gasoline from Washington State to Northern California. Another Marshall Islands-flagged tanker, Cabo Deseado, repeatedly shuttled heavy crude and refinery feedstocks between Northern and Southern California refineries.

The disruptions have become so severe that crude from the U.S. Strategic Petroleum Reserve has now reached California for the first time ever.

According to Kpler, SPR crude from Louisiana was transported via the Panama aboard foreign-flagged vessels before ultimately reaching Chevron refineries in California — a highly unusual movement that underscores how dramatically U.S. oil flows have shifted since the Strait of Hormuz crisis began.

Chevron confirmed earlier this month that it was using the Jones Act waiver to move Gulf Coast crude to the West Coast.

Gulf Coast Becomes Emergency Supply Hub

The waiver is also reinforcing the Gulf Coast’s role as the country’s emergency fuel hub.

Foreign-flagged tankers have moved gasoline, diesel, jet fuel, ethanol and crude oil from Texas and Louisiana into Florida, the Northeast and Puerto Rico.

Originally designed to preserve a domestic merchant marine and shipbuilding base, the Jones Act requires cargo moving between U.S. ports to travel aboard U.S.-built, U.S.-owned, U.S.-flagged and U.S.-crewed vessels.

But the eligible tanker fleet has shrunk dramatically over the decades. RBN estimates only about 100 Jones Act-qualified vessels remain today, down from roughly 400 ships in 1950.

Whether the waiver remains temporary is quickly becoming a major political fight. The administration has framed the policy as an emergency response to the Middle East crisis and the need to stabilize domestic fuel supplies.

But the waiver has triggered growing backlash across the U.S. maritime sector and lawmakers in Washington, with critics arguing the policy undermines the U.S.-flag fleet while doing little to reduce fuel prices. Critics warn repeated waivers erode the cargo base needed to sustain American shipbuilding, sealift capacity and mariner jobs just as Washington is calling for a revival of U.S. maritime power.

At the same time, the waiver is exposing deeper structural weaknesses inside the U.S. maritime sector as energy companies increasingly turn to foreign-flagged tonnage for flexibility, speed and lower transportation costs during times of crisis.

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