Oil companies are using the Caribbean as a legal way around a century-old US shipping law to get fuel to America’s East Coast, where demand is skyrocketing.

Data from Refinitiv compiled in a Reuters report shows that traders are increasingly transporting unfinished gasoline products from the US Gulf Coast to Buckeye Partners LP’s terminal in the Bahamas.

Those supplies are then blended into finished gasoline and shipped off to the US East Coast mostly in ships chartered by British Petroleum.

This is being done to go around the US Merchant Marine Act of 1920, also known as the Jones Act, which requires that goods travelling between US ports must be carried by American-made ships and staffed by a US crew.

With capacity nearly maxed out on the Houston-to-New Jersey Colonial Pipeline, seaborne shipments of fuel have become more attractive using the Caribbean to go around the Merchant Marine Act of 1920.

This trade route was uncommon before Russia invaded Ukraine and did not occur at all last year. However, since March, at least eight cargoes have completed the route and then delivered fuel to ports along the Atlantic, according to Reuters. 

Overall data also reflect the spike in fuel trade with the Bahamas. In 2021, the US sent 146,000 barrels of gasoline components to The Bahamas, whereas in May 2022 alone shipments totalled 498,000 barrels.

Throughout the entirety of last year, the US imported 699,000 barrels of finished gasoline from the Bahamas. So far this year, that figure is already up to 1.2 million barrels.