The US has announced licences to let companies resell Venezuelan oil to Cuba for commercial and humanitarian use, but many operational and political questions remain
The United States has quietly shifted course on Cuba’s fuel crisis, announcing it will begin issuing licences that allow companies to resell Venezuelan crude to the island — but only under tight conditions. The stated goal is simple: ease an acute civilian energy shortage without opening channels that could benefit the Cuban military or other state institutions.
What’s allowed — and what’s not
– Licences will permit private, commercial sales of Venezuelan oil destined for civilian use in Cuba. Think fuel for hospitals, public transit and basic services — not barrels that line military depots.
– Approval will hinge on detailed vetting.
Companies must show clear chains of ownership, verifiable delivery records and independent assurances that the fuel reaches civilian end users.
– Expect strict compliance requirements: enhanced reporting, third‑party audits, contractual clauses that prevent diversion, and cooperation with US oversight. Firms will need to document supply chains, tracking mechanisms and compliance controls before a licence is granted.
Why the change matters — and its limits
This is a pragmatic, narrowly tailored move: humanitarian relief without dismantling the broader sanctions framework. If enforced well, it can unblock some legal supply routes and help critical services. But licences aren’t a silver bullet. They won’t rebuild aging refineries, fix distribution networks, or resolve insurance, banking and shipping obstacles overnight. Ports, storage and on‑island logistics still need coordinated support for fuel to reach people reliably.
How Cuba’s energy situation got so bad
Cuba’s trouble has multiple roots. Longstanding barter arrangements with Venezuela that once delivered discounted crude have dwindled. Domestic refineries and the power grid are under‑maintained and chronically underfunded. The result has been more frequent blackouts, transport disruptions and weakened public services — with hospitals and water systems among the hardest hit.
Compounding this, reports of interdictions and sanctions against Venezuelan shipments have sharply reduced available fuel. The loss has had immediate consequences: lengthy outages, postponed surgeries, paused municipal services and wider strains across the economy. Some estimates put the drop in fuel supply at very high levels, producing cascading humanitarian concerns.
Regional pressure and geopolitics
Caribbean and regional leaders have pushed Washington to ease civilian pain, warning of migration and spillover instability. Countries including Mexico, Canada and Russia have offered assistance or explored fuel shipments. Large global traders — firms like Vitol and Trafigura — sit at the center of whatever resales happen, because they handle much of the crude flows and influence which cargoes move.
Practical hurdles that remain
Even with licences, numerous barriers could blunt impact:
– Cargo availability and pricing: Sellers may prefer spot‑market terms that Cuba cannot meet.
– Finance and insurance: Banks and insurers remain wary when political and legal risks are high.
– Logistics: Tanker availability, port capacity and inland distribution all matter.
– Licence terms: If rules bar the kind of flexible, discounted arrangements that sustained Cuba before, volumes may be too small to steady the system.
Will this resolve the crisis?
Not by itself. The policy can open a legal window for supplies, but meaningful relief depends on private‑sector willingness to take on compliance risk and the emergence of workable payment and logistics arrangements. Durable improvement will require a mix of eased but monitored trade channels, targeted humanitarian aid, and on‑the‑ground logistics and infrastructure support.
What to watch next
– How quickly regulators issue clear guidance and process licences.
– Whether major traders and insurers step in to move cargoes.
– If monitoring mechanisms and delivery verifications actually prevent diversion to barred actors.
– Whether the volumes and prices available meet Cuba’s most urgent needs: hospitals, water systems and public transport. It could provide modest, targeted relief if regulators, traders and recipients can align on compliance‑safe, commercially viable terms. If they cannot, the move may remain more symbolic than substantive. The coming weeks will show whether this narrowly designed pathway can translate into steady fuel on the ground.
