No Jones Act Waivers, Yet

To blunt the impact of the collapse in oil prices some US producers have suggested temporary Jones Act waivers to move crude and products between US ports at a lower cost, but no one has yet requested such a waiver, according to US Customs and Border Protection. “We have received no requests for Jones Act waivers at this time,” CBP spokeswoman Rhonda Lawson said Wednesday. The need to apply for a waiver is currently being outweighed by ample Jones Act tonnage, suggesting that there would be no incentive to move US oil between US ports on internationally flagged ships, an operator of Jones Act ships said. “We are not sure if it is headed that way and [we’re] weighing the pros and cons of it,” a shipbroker said. This comes at a time when freight rates for international-flagged ships are at sky-high levels as depressed oil prices have sent charterers into the market looking for ships for floating storage and spot voyage charters. Floating storage on international-flagged Very Large Crude Carriers has been heard as high as $120,000/day for six-month storage in the USGC for about 2 million barrels of crude oil. Aframaxes storing crude on a six-month charter have been heard as high as $45,000/d. For refined products, Medium-Range tankers have been heard booked at $19,500/d on a 30- to 90-day basis. Last month, Anne Bradbury, CEO of the American Exploration and Production Council, wrote to the US House of Representatives and Senate leaders calling for, among other efforts, temporary waivers of the Jones Act. “We believe a temporary waiver can allow American producers to move domestic products with greater ease within the US,” she wrote. The Jones Act, which requires ships transporting goods between the US ports to be US-flagged, US-built, and majority US-owned, has broad, bipartisan support throughout Congress and the domestic shipbuilding industry has strongly opposed all efforts to weaken its enforcement.

via HSN