US to Relax Ship Rule in Bid to Ease Rising Fuel Prices

The Trump administration is planning to use this temporary waiver for 30 days to allow generally cheaper foreign tankers to transport energy, commodities and fertilizer between U.S. ports. Waiving the Jones Act allows foreign-flagged vessels to operate on highly lucrative US domestic coastal routes. This creates an immediate, unexpected demand shock for international product and crude tanker companies, allowing them to capture premium shipping rates. LONG foreign-flagged tanker operators as they gain sudden access to a restricted, high-margin market. The waiver is only temporary (30 days) and could be revoked or not extended; shipping rates may normalize quickly once the waiver expires.

President Trump on Truth Social... downplayed the rise in energy prices, ultimately suggesting that it's good for domestic producers... the president could even invoke the Defense Production Act to spur drilling off of the coast of California. The administration is explicitly supporting higher oil prices to benefit US companies and is actively looking to deregulate or subsidize domestic production via the Defense Production Act. This provides a dual tailwind of high commodity pricing and highly favorable government policy for US exploration and production companies. LONG US domestic oil producers and broad energy equities that benefit from administration backing and elevated crude prices. A sudden diplomatic resolution in Iran could crash oil prices, or the Defense Production Act invocation may face severe legal and environmental challenges in California.

The number one important thing to help stabilize the oil market would be resuming traffic in the Strait of Hormuz... the supreme leader who vows that the Strait of Hormuz will remain closed. The Strait of Hormuz is the most critical global oil chokepoint. While the US is releasing 172 million barrels from the SPR, it will take four months to fully deliver. The immediate physical market deficit caused by the closure cannot be quickly offset by the slow SPR release, keeping crude prices highly elevated in the interim. LONG crude oil to capture the geopolitical risk premium and immediate physical supply shortage. US naval escorts could successfully reopen the Strait earlier than expected, or severe demand destruction could occur globally due to the high fuel prices.