Trump U-turn: Is Venezuelan oil really available to Cuba again? | Energy News

After months of a crippling oil embargo on Cuba imposed by the United States, the fuel-starved country may now see some relief after the US government said it would begin authorizing companies to resell Venezuelan oil even if tensions between the two reached a head.

The US Treasury Department said on Wednesday it would allow the resale of Venezuelan oil for “commercial and humanitarian use” in Cuba, as the small island nation is one of its worst fuel crises in decades.

Venezuela is the largest supplier of oil to Cuba. However, since US forces Venezuelan President Nicolas Maduro kidnapped The Donald Trump administration seized control of Caracas’ oil and halted exports to Havana in January, arraigning him to face drug and weapons charges in a New York court.

Washington has long had frosty relations with Cuba, but Trump’s administration is specifically seeking regime change there by the end of 2026, US media reported reported.

However, the US policy shift this week comes after Caribbean leaders raised the alarm over the dire situation in Cuba, an island nation of 10.9 million people.

At a regional meeting of countries of the Caribbean Community (CARICOM), attended by US Secretary of State and Cuban-American Marco Rubio on Wednesday, Jamaica’s Prime Minister Andrew Holness appealed to Washington to ease the pressure.

“Today, many Cubans face severe economic hardship, energy shortages and growing humanitarian challenges,” Holness said. Cuba is not a CARICOM member but shares close ties.

“We are sensitive to their struggle. But we must also recognize that a protracted crisis in Cuba will not stay there. It could affect migration, security and economic stability across the Caribbean, including Jamaica,” he added.

What is the situation in Cuba now?

Cuba’s state-dominated economy has already struggled under a US embargo in place since 1962, which dates back to Havana’s alliance with the Soviet Union during the Cold War.

Since then, sanctions on Cuba have eased and tightened under various US administrations.

The long-standing sanctions have severely weakened Cuba, causing the country to become highly dependent on imports, and high inflation frequently leads to food and energy shortages. Mass emigration of Cuba’s skilled workforce, particularly during the COVID-19 pandemic, has added to the country’s problems.

With Trump’s latest oil embargo, the US has added a serious energy crisis to the mix. Widespread power outages of up to 20 hours at a time are now being reported across Cuba, affecting hospitals, businesses and households.

Operations have been suspended, schools have canceled classes and garbage trucks are parked like rubbish piles up in the streets.

Four United Nations special rapporteurs warned in early February that the situation was contributing to a serious public health problem in the country, saying it could lead to a “serious humanitarian” crisis.

Cuba has lost 90 percent of its fuel supplies, and despite closing beach resorts and limiting aviation fuel sales, the country could experience a total blackout as early as late February, according to Ignacio Seni, a risk analyst writing for the US intelligence firm Crisis 24.

Why did the US block oil supplies to Cuba?

Cuba produces crude oil but lacks the capacity to refine enough to meet domestic demand.

Venezuela supplied as much as 50 percent of Cuba’s oil before the U.S. government took control of its oil industry at the beginning of this year, about 35,000 barrels a day.

Under a special exchange agreement in place since 2000, Cuba provides support for education, health care and security services in exchange for Venezuelan fuel. Around 30 members of Maduro’s security detail killed in the operation to kidnap him in January were indeed from Cuba.

Then, days after Maduro was kidnapped, Trump turned his sights on Cuba itself, warning Havana to “make a deal before it’s too late.” However, he did not give details on what type of deal he wanted.

On January 29, Trump issued an executive order imposing new trade tariffs on any countries that sell oil to Cuba because of what he called the “policies, practices and actions” of the Cuban government, which he said posed an “extraordinary threat” to the US.

Trump also claimed without evidence that Havana finances “terrorism”.

Besides Venezuela, Cuba also got oil from Mexico, Russia and Algeria, but all oil imports to the country stopped. So Trump’s order effectively amounted to a blockade.

The US also reportedly seized fuel tankers in open waters carrying oil to Cuba, according to a New York Times investigation into shipping movements in the Caribbean published last week.

The US began building up its naval presence in the area last September as it prepared to attack Maduro, and its troops have continued to patrol the waters.

In mid-February, one tanker loaded with Colombian oil was intercepted by the US Coast Guard as it came within 70 miles of Cuba, the Times reported. The vehicle, called the Ocean Mariner, was previously used to secretly transport oil between Venezuela and Iran.

Before Maduro’s capture, U.S. forces also hit several Venezuelan boats in the eastern Pacific and Caribbean that the U.S. claimed—without evidence—trafficked in drugs.

How did Cuba and others respond to the US blockade?

Cuban authorities under President Miguel Diaz-Canel have accused the US to impose collective punishment on the country.

It’s also Wednesday accused the US from links to gunmen who entered the country’s waters on a Florida-marked speedboat. Four Americans of Cuban origin were killed in the altercation, and two were injured.

In the past, Havana has said it is open to “mutual dialogue” with Washington, but Diaz-Canel also said Cubans will “defend the Homeland to the last drop of blood.”

Meanwhile, on February 12, a UN expert panel condemned the US mandate as illegal, saying the allegation that Havana finances terrorism lacks credibility and appears designed to justify the use of extraordinary and coercive powers.

“This is an extreme form of unilateral economic coercion with extraterritorial consequences, whereby the United States seeks to exert coercion on the sovereign state of Cuba and to compel other sovereign third states to alter their legitimate trade relations,” the panel said.

Other countries are trying to help. Mexico sent two deployments of humanitarian aid to Havana between mid-February and this week, while Russia floated the possibility of sending fuel to Cuba.

Canada pledged 8 million Canadian dollars ($6.7 million) in food aid on Wednesday.

What relief has the US announced now, and will it change anything?

Washington said On Wednesday, it will issue companies with special licenses to resell Venezuelan oil to Cuba “in solidarity” with the Cuban people.

It came after Washington announced $6 million in humanitarian aid to Cuba to be distributed by the Catholic Church in early February.

However, “persons or entities associated with the Cuban military, intelligence services or other government institutions” will be barred from obtaining oil sales licenses, the US Treasury Department said this week.

Transactions should only support “exports for commercial and humanitarian use,” the statement added.

It is unclear whether the new order will allow Havana to continue buying Venezuelan oil at a heavily subsidized rate as before. If that doesn’t happen, the situation may not ease significantly for Cuba, experts say.

“Without significant oil imports or a slowdown in US pressure, Cuba’s economy is unlikely to recover, and deteriorating conditions are likely to accelerate,” wrote Seni, the Crisis 24 risk analyst.