Trump’s 60-day shipping waiver could ease East Coast fuel prices: Goldman Sachs’ Daan Struyven

Summary

• President Trump's 60-day waiver of the Jones Act could provide modest relief for fuel prices on the US East Coast, estimated at roughly $0.10 per gallon.
• Current oil market tightness follows a hierarchy: greatest in Asian refined product markets (especially jet fuel and fuel oil), followed by Middle Eastern crude grades (Oman and Dubai), and then Western crude markets (WTI and Brent).
• Two key upside risks to oil prices are a lengthier disruption of Strait of Hormuz flows and persistent damage to energy infrastructure from geopolitical conflicts.
• The ongoing supply shock is the largest in history; historical data shows that after major shocks, production can remain about 40% lower four years later due to infrastructure damage or weak investment.
• The attack on Iran's South Pars facility highlights the vulnerability of upstream infrastructure, increasing price risks.
• Refined product prices are critical for consumers and businesses, directly impacting inflation, real income, and GDP growth.
• The Jones Act waiver's effect is limited and regional, primarily benefiting net importers like the East Coast.
• Asian markets, particularly for heavy refined products, are experiencing the most significant tightness, indicating regional disparities in supply pressures.