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The Trump administration is considering loosening shipping rules in an effort to lower fuel prices, which have surged as a result of the war in Iran.
In particular, the administration is considering issuing a temporary waiver of the Jones Act, a 100-year-old law that requires shipping between U.S. ports to be done by U.S.-flagged ships.
A 2023 working paper from the National Bureau of Economic Research found that waiving the Jones Act could have reduced average East Coast gasoline, diesel and jet fuel prices by 63 cents, 82 cents and 80 cents per barrel, respectively. A standard barrel of oil produces about 19 gallons of gasoline, 10 gallons of diesel and 4 gallons of jet fuel on average.
The paper found that such policies could increase Gulf Coast gasoline prices by about 30 cents per barrel.
Fuel prices have skyrocketed in the wake of U.S. strikes on Iran, with gasoline prices averaging $3.60 per gallon across the country Thursday, up about 65 cents from a month ago.
The jumps have been related to the Strait of Hormuz, a key channel through which about a fifth of the world’s oil flows. Shipping there has essentially halted in the wake of Iranian threats to vessels that pass through.