Above, the Diyyinah I is shown on its way to Japan with U.S. oil that Hawaii’s refinery prefers but doesn’t buy because of the Jones Act, which increases shipping cost between U.S. ports.
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Japan buys Gulf Coast oil, Hawaii doesn’t, thanks to 1920 Jones Act

from Grassroot Institute of Hawaii, June 27, 2025

Earlier this month, the crude oil tanker Diyyinah I departed the port of Houston, transited the Panama Canal and began sailing along the coast of Central America on its way to Japan.

It’s one of numerous vessels that regularly transport American oil from the Gulf Coast to Japan. In fact, last year Japan imported over 9.5 million barrels of crude from Texas. 

In contrast, Hawaii — which is approximately 3,000 nautical miles closer to Texas than Japan — imported precisely zilch last year from the entire U.S. mainland. Not a single barrel of oil despite its closer distance. Why might that be?

One obvious answer is the Jones Act, the 1920 shipping law that limits domestic shipping to vessels registered in the United States and built in U.S. shipyards.

Tankers that comply with the law are both few in number — fewer than 60 of the world’s nearly 7,500 tankers are Jones Act-compliant — and extremely expensive to build and operate. 

That combination makes Jones Act-compliant shipping very costly. In fact, Grassroot Scholar Colin Grabow pointed out in a Honolulu Star-Advertiser commentary earlier this year that the law makes shipping so costly that Hawaii’s Par refinery buys the low-sulfur crude it prefers from countries as distant as Libya, its top supplier, and Algeria instead of much-closer Texas.

By effectively taking mainland crude off the table, the Jones Act restricts choices and results in oil being imported to Hawaii from longer distances. That means higher costs and yet another reason why Hawaii suffers from the highest average electricity price of any state.