U.S. Government To Take Steps To Reduce Oil Prices

With the conflict against Iran leading to a spike in oil prices, the Trump administration has said it will take steps to open up supply. For example:

• The U.S. Department of the Treasury temporarily lifted sanctions on Russian oil. As CNBC reported, Secretary Scott Bessent said that, until April 11, countries would be able to buy Russian oil that was already at sea. Secretary Bessent called the announcement a “narrowly tailored, short-term measure” that would “not provide significant financial benefit to the Russian government.”
• As The Hill reported, the U.S. government and other members of the International Energy Agency (IEA) announced they will release 172 million barrels of oil from the U.S. Strategic Petroleum Reserve, the largest volume of emergency oil reserves ever released in the IEA’s history.
• The Trump administration will waive a century-old maritime law, the Jones Act, that requires U.S. ships be used to transport goods between U.S. ports. The 30-day exemption, which Bloomberg reported is still being developed, is set to apply broadly to vessels moving oil, gasoline, diesel, liquefied natural gas, and fertilizer among U.S. ports. The administration said this move would enable generally cheaper foreign tankers to move those goods, including Gulf Coast oil to refineries on the U.S. East Coast and fuel from the region to more populous areas. 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.