New York's fuel inventory is so low that shippers are paying big premiums to get supplies there by boat

Shippers are paying a lot of money to get fuel to New York by boat because of low inventories.

The Empire State usually depends on the Colonial Pipeline to get fuel from the US Gulf Coast, but it's already at full capacity. Supplies from Europe have declined in recent times.

The vessels are expected to arrive in New York by the end of the week from Texas and Louisiana.

Goods traveling between US ports must be carried by American-made ships and staffed by US crew according to the Merchant Marine Act of 1920. It costs more to comply with that century-old law than it does to do the same routes in the international market.

Shippers are willing to pay up as fuel inventories in New York have hit the lowest on record. As gasoline prices come off highs, demand has been increasing.

Some oil companies are using the Jones Act to transport unfinished gasoline products from the Gulf Coast to a terminal in the Bahamas. The finished gasoline is shipped off to the US East Coast.

The trade was rare before Russia invaded Ukraine. The route has been completed by at least eight cargos since March.