By Shariq Khan and Anushree Mukherjee

NEW YORK, April 6 – U.S. President Donald Trump has allowed foreign-flagged cargo ships to transport fuel and other goods between U.S. ports. However, this change has not significantly affected the American oil supply, as data and analysts indicate that U.S. refiners and shippers are making more money by exporting fuel rather than using it domestically.

Trump lifted the restrictions of the Jones Act for 60 days starting on March 17. The intention was to help reduce rising fuel prices caused by the conflict in Iran by increasing shipments from the Gulf Coast to other U.S. coastal markets.

So far, shipping data reveals that U.S. oil flow between domestic ports has not increased. Instead, U.S. fuel exports reached record levels last month, with refiners sending more fuel from the Gulf Coast to Asia and Europe, even reversing the usual trend by exporting from the East Coast to Europe.

The Jones Act restricts the movement of goods between U.S. ports to U.S.-flagged vessels only. The limited availability of these ships has been partially blamed for high fuel prices in states like California and Hawaii, which lack pipeline access to Gulf Coast refiners.

According to Kpler data, the shipments of crude oil, refined products, biofuels, and liquid chemicals between U.S. ports remained almost unchanged in March compared to February, at about 1.37 million barrels per day.

Liquid exports from the Gulf Coast to other U.S. coastal markets fell to 770,000 barrels per day in March, down from 826,000 barrels per day in February, according to Kpler.

The oil markets in Asia and Europe have been most affected by the conflict in the Middle East, as Iran’s blockade of the Strait of Hormuz has cut off these regions from their usual crude and fuel suppliers. As a result, U.S. refiners are making more profits by exporting fuel instead of selling within the U.S. market.

On Monday, European gasoil futures, which are used to price diesel in Europe, were trading above $200 a barrel, while U.S. ultra-low sulfur diesel futures, the pricing benchmark in the U.S., were below $185.

Tom Kloza, chief energy advisor to Gulf Oil, stated, “With incredible arbitrage opportunities involving various continents, I’m not sure when we might see a few vessels that could take Gulf Coast product to the Northeast.”

In addition to better prices for refiners, ship owners are also benefiting from sending vessels on longer voyages from the U.S. to Asia. Asian refiners are competing for ships in the Atlantic Basin to import more U.S. crude to replace lost Middle Eastern supply.

This situation has tightened the tanker market in the U.S. Gulf Coast and caused freight rates to soar.

Kloza added, “We are not seeing any real response or results from the Jones Act waiver because freight rates, whether using U.S. or foreign flagged vessels, skyrocketed at the end of March.”

(Reporting by Shariq Khan in New York and Anushree Mukherjee in Bengaluru; Editing by David Gregorio)