The fuel-starved nation may now feel some relief after the U.S. government announced it would start allowing companies to resell Venezuelan crude oil, even as tensions between the two countries reached a new high after months of a devastating U.S. oil blockade on Cuba.
The U.S. Treasury announced Wednesday it will allow the resale of Venezuelan crude oil for “commercial and humanitarian uses” in Cuba, as the small island nation faces its worst fuel crisis in decades.
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Venezuela is Cuba’s largest oil supplier. But since U.S. forces abducted Venezuelan President Nicolás Maduro in January and jailed him in a New York court on drug and weapons charges, President Donald Trump’s administration has taken control of Caracas’ oil and halted exports to Havana.
Although the US government has had a chilly relationship with Cuba for many years, US media reported that the Trump administration is particularly aiming to replace the Cuban government by the end of 2026.
But this week’s U.S. policy shift comes after Caribbean leaders raised alarm over the dire situation in Cuba, an island nation of 10.9 million people.
On Wednesday, at a regional meeting of Caribbean Community (CARICOM) countries attended by the US Secretary of State and Cuban-American Marco Rubio, Jamaican Prime Minister Andrew Holness called on the US to ease pressure.
“Many Cubans are currently facing severe economic hardship, energy shortages, and growing humanitarian challenges,” Holness said. Cuba is not a member of CARICOM, but they share close ties.
“We are sensitive to their struggles. But we must also recognize that the crisis in Cuba is not going to be long-term. It could have implications for migration, security and economic stability across the Caribbean, including Jamaica,” he added.
What’s going on in Cuba now?
Cuba’s state-controlled economy was already struggling under a U.S. embargo in place since 1962, dating back to the Cold War alliance between Havana and the Soviet Union.
Since then, sanctions against Cuba have been eased and tightened under various U.S. administrations.
Prolonged sanctions have left Cuba severely weakened and highly dependent on imports, and high inflation means food and energy shortages are common. The mass emigration of Cuba’s skilled labor force has further increased the country’s difficulties, especially during the COVID-19 pandemic.
President Trump’s recent oil embargo has further compounded the United States’ severe energy crisis. Widespread power outages of up to 20 hours at a time are currently being reported across Cuba, impacting hospitals, businesses and homes alike.
Surgeries have been cancelled, schools have canceled classes and garbage trucks are parked in piles of trash on the streets.
Four UN 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% of its fuel supplies and could face a complete blackout as early as late February, despite the closure of beach resorts and restrictions on aviation fuel sales, said Ignacio Ceni, a risk analyst at US-based intelligence firm Crisis24.
Why did the US block oil shipments to Cuba?
Cuba produces crude oil, but does not have enough refining capacity to meet domestic demand.
Before the U.S. government took control of the country’s oil industry earlier this year, Venezuela supplied 50% of Cuba’s oil, or about 35,000 barrels a day.
Under a special barter agreement in place since 2000, Cuba provides aid for education, health and security services in exchange for discounts on Venezuelan fuel. In fact, about 30 members of Maduro’s security forces killed in the abduction operation in January were from Cuba.
Then, days after Maduro’s abduction, President Trump turned his attention to Cuba itself, warning Havana to “make a deal before it’s too late.” However, he did not elaborate on what type of deal he was seeking.
On January 29, President Trump issued an executive order imposing new trade tariffs on all countries that sell oil to Cuba, citing the Cuban government’s “policies, practices, and actions,” which he said pose an “extraordinary threat” to the United States.
President Trump also claimed, without evidence, that Havana was funding “terrorism.”
In addition to Venezuela, Cuba used to source oil from Mexico, Russia, and Algeria, but all oil imports to Cuba have been halted. Therefore, President Trump’s order amounts to a de facto lockdown.
The United States also reportedly seized a fuel tanker in international waters transporting oil to Cuba, according to a New York Times investigation into shipping movements in the Caribbean published last week.
The United States began increasing its naval presence in the area last September in preparation for an attack on Maduro, and the US military continues to patrol the area.
In mid-February, a tanker carrying Colombian oil was seized by the U.S. Coast Guard as it came within 110 miles of Cuba, the Times reported. The vehicle, known as the Ocean Mariner, was previously used to secretly transport oil between Venezuela and Iran.
Before Mr. Maduro’s capture, the U.S. military attacked several Venezuelan ships in the eastern Pacific and Caribbean, accusing the United States of drug trafficking without evidence.
How did Cuba and other countries react to the US blockade?
Cuban authorities, led by President Miguel Diaz-Canel, have accused the United States of imposing collective punishment on the country.
On Wednesday, it also accused the United States of links to armed groups that entered Florida waters in speedboats with Florida tags. The altercation left four Cuban Americans dead and two injured.
While Havana has said in the past that it is open to “mutual dialogue” with Washington, Díaz-Canel also said that Cubans “will defend our homeland to the drop of our blood.”
Meanwhile, on February 12, a UN panel of experts condemned the US directive as illegal, saying that claims that Havana is financing terrorism “lack credibility and appear to be aimed at justifying the use of extraordinary and coercive powers.”
“This is an extreme form of unilateral economic coercion with extraterritorial effects, through which the United States seeks to use coercive power against the sovereign state of Cuba and force other sovereign third countries to change their legitimate commercial relations,” the panel said.
Other countries are also trying to help. Mexico sent humanitarian aid to Havana twice between mid-February and this week, while Russia has floated the possibility of sending fuel to Cuba.
On Wednesday, Canada pledged C$8 million ($6.7 million) in food aid.
What relief package is the US currently announcing and will it change anything?
The U.S. government announced Wednesday that it will issue special licenses to companies to resell Venezuelan oil to Cuba “in solidarity” with the Cuban people.
This came after Washington announced in early February that it would allocate $6 million in humanitarian aid from the Catholic Church to Cuba.
However, the U.S. Treasury Department announced this week that “individuals or entities associated with the Cuban military, intelligence services, or other government agencies” will be prohibited from obtaining oil sales licenses.
Trade 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 the same heavily subsidized rates as before. Otherwise, the situation in Cuba may not ease significantly, experts say.
“Without significant oil imports or a easing of pressure from the United States, Cuba’s economy is unlikely to recover and the deterioration of the situation is likely to accelerate,” said Ceni, risk analyst at Crisis24.
