What does the Jones Act waiver mean for Guam?

By Mar-Vic Cagurangan

President Donald Trump’s move to issue a 60-day waiver of the Jones Act will allow Guam to reduce its dependence on foreign energy suppliers and ensure a stable inventory—at least during the relief period—against the backdrop of a global crisis fueled by the war in Iran.

“This waiver opens the door to an untapped domestic fuel market by allowing Guam’s fuel suppliers to access direct shipments of American fuel using foreign vessels,” Sen. Jesse Lujan said.

Jesse Lujan

Sen. William Parkinson, however, pointed out that while the waiver may be a theoretically logical response to the escalating pressure on global fuel markets, Guam’s realities do not guarantee adequate relief.

“While this waiver may create some additional flexibility for shipments from the U.S. mainland or the Gulf of America, it is far from clear that it will translate into meaningful savings at the pump here on Guam,” Parkinson said.

The Jones Act mandates that all cargo shipped between U.S. ports can only be shipped on U.S.-flagged vessels. 

Trump last week temporarily lifted shipping restrictions under the century-old federal maritime law to hold down skyrocketing fuel prices resulting from the closure of the Straits of Hormuz, the world’s most critical shipping lanes.

“Roughly 84 percent of the crude oil and condensate moving through Hormuz went to Asian markets in 2024, while only a small share went to the United States,” said Lujan, who earlier wrote to the White House to seek the Jones Act waiver.

“That means Guam should not be forced to remain overly dependent on vulnerable foreign supply chains when American fuel is available,” he added.

Guam obtains fuel supply from Singapore, Japan and Korea.

Despite Singapore's resilient storage infrastructure, distributors are not immune to volatility. As geopolitical instability threatens long-term market stability, Singapore's bunker fuel prices have surged over the past week.

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Lujan sees the suspension of the Jones Act rules as “a practical, commonsense solution” because it “helps bypass the foreign routing and inflated logistics costs.”

“It gives our island more flexibility at a time of global uncertainty,” he said. “By tapping domestic supply, Guam is less vulnerable to overseas disruptions that can drive up costs and threaten our energy security.”

Guam currently sources most of its fuel from Asia, primarily due to volume and shipping efficiency. Moving fuel from the U.S. mainland typically requires larger vessels and longer routes, which have not been cost-effective for a market the size of Guam.

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“Our market is relatively small, so suppliers use what are known as ‘boutique tankers,’ which are smaller, more flexible vessels that can economically deliver fuel from nearby Asian refineries,” Lujan said.

While Matson serves Guam, the shipping line primarily transports containerized cargo, but not bulk fuel.

The high cost of living on Guam is typically attributed to the Jones Act, which facilitates a market monopoly.

“The Jones Act waiver changes that equation. With a waiver in place, Guam can begin to access fuel transported on non-Jones Act compliant vessels, which are more widely available and cost-competitive,” Lujan said.

William Parkinson

Parkinson, meanwhile, said the size and distance of the Guam market are inherent liabilities difficult to surmount.

“Even with a temporary waiver, suppliers would have to rework logistics, secure cargoes and determine whether it makes economic sense to redirect products this far into the Pacific,” he said. 

“A 60-day window may simply not be enough time for supply chains to adjust in a way that produces any significant relief for our island,” he added.

As long as the Middle East crisis continues unabated and the Strait of Hormuz remains blocked, fuel supplies flowing to Asia remain particularly exposed to disruptions.

“Oil prices have continued climbing as the conflict deepens and energy infrastructure in the Gulf comes under threat,” Parkinson said.

“Increased global demand for alternative barrels, combined with the shipping distance to Guam, could easily wipe out whatever theoretical savings a temporary Jones Act waiver might offer.” 

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