Jones Act Waiver Floated as Oil Giants Post Record Profits and Iran Holds Hormuz Closed
U.S. gasoline above $4 a gallon and record Big Oil earnings draw White House pressure, but the Hormuz closure limits what domestic policy can fix.
Donald Trump is weighing a second suspension of the Jones Act, the century-old law reserving domestic cargo routes for American-flagged vessels, as gasoline prices above $4 a gallon become a political liability for Republicans heading into the midterm elections. The move follows a quarter in which the largest U.S. oil companies posted the biggest profits in their histories.6
Chevron's second-quarter net earnings surged to $12 billion, up from $2.5 billion in the same period last year — a roughly 400% jump — while ExxonMobil's profits more than doubled to $14.5 billion against $7.1 billion a year earlier, The Guardian reported on August 3 (2026-08-03). Saudi Aramco reported a 44% increase in net profit to $32.69 billion over the same three months.5
Trump's reaction was blunt. He told the companies they were "making too much money" and demanded they cut retail prices for consumers. BP, reporting on the same day, said its second-quarter profit more than doubled to $5.73 billion, beating analyst expectations.5
The political arithmetic is direct. AAA data show U.S. gasoline averaged $4.10 per gallon on Monday (2026-08-03), nearly 40% above the $2.98 per gallon recorded before the war with Iran began. Record oil industry profits alongside near-record pump prices have made for an uncomfortable combination ahead of elections.5
The source of the problem is Iran's closure of the Strait of Hormuz. Tehran has stated publicly that Hormuz remains shut until Washington meets six sweeping demands, the specifics of which have not been detailed in available reporting. ICE Brent crude front-month was trading at $84.47 per barrel as of early Monday (2026-08-10), below the Q2 average of $96.68 per barrel that powered the earnings surge, as markets price in the diplomatic standoff.6,2
A Jones Act suspension opens domestic U.S. coastal routes to foreign-flagged vessels, which can carry fuel more cheaply and ease regional product imbalances. But the constraint on U.S. gasoline prices is not primarily the cost of coastwise shipping. The underlying crude feedstock remains expensive because the Strait of Hormuz remains closed. Cheaper vessel charters cannot offset a supply shock of that scale.6
Goldman Sachs warned that ICE Brent could top $120 per barrel next quarter and average more than $100 per barrel over the following year if the waterway stays blocked, according to a note reported by finance.yahoo.com. That scenario would render any Jones Act dividend insignificant at the pump.3
ExxonMobil carries more direct exposure to the disruption than its peers. Around a fifth of Exxon's oil-and-gas production sits in the Middle East, one of the highest proportions among the majors. The company pumped the equivalent of 4.6 million barrels per day in the first quarter, down from 5 million barrels in the quarter before, reflecting the impact of strained regional access.1
Despite the earnings windfall, neither Exxon nor Chevron deployed it into accelerated buybacks. Both companies directed the excess capital into debt reduction, Rigzone reported in late July (2026-07-31), a posture that signals caution about the durability of war-driven prices. Neither is treating triple-digit oil as the new baseline.4
RBOB Gasoline futures last traded at $3.01 per gallon as of early Monday (2026-08-10), well below the $4.10 average retail price after distribution costs and taxes, but elevated relative to the pre-war baseline. Iran's diplomatic posture is now the primary crude price variable. A prolonged Hormuz closure keeps Brent on a trajectory toward Goldman's $120 scenario and keeps the midterm liability intact; any resumption of tanker transits removes the supply floor and the political urgency for a Jones Act fix simultaneously.3,6