US Eases Venezuelan Oil Sanctions for Resale to Cuba
The US Treasury will now allow licenses for the resale of Venezuelan oil to Cuba's private sector. The policy shift is a response to the severe energy crisis in Cuba and marks a selective easing of sanctions. This change could impact energy supply chains and pricing in the Americas.
- Venezuela's oil shipments to Cuba have drastically decreased over the last decade; from over 100,000 barrels per day (bpd) in 2012, the supply dropped to around 22 million barrels for the entire year of 2018. By 2025, shipments averaged about 26,500 bpd, covering roughly one-third of Cuba's daily needs. - The new licensing policy specifically targets Cuba's "independent private sector entrepreneurs," a term defined by the U.S. Treasury to include small private businesses, cooperatives, and sole proprietorships with up to 100 employees. This excludes any entities associated with the Cuban military, intelligence services, or other government institutions. - Cuba's energy crisis has led to severe electricity shortages, with generation deficits at times exceeding 1,300 to 1,700 megawatts, leaving nearly half of the national demand unmet. The island's power generation is heavily dependent on aging, oil-fired thermal plants. - Prior to this policy shift, U.S. actions in January 2026 had effectively halted all Venezuelan oil shipments to Cuba. These actions followed the 2019 sanctioning of Venezuela's state-run oil company, PDVSA, which was a key part of the "oil-for-doctors" program that supplied Cuba with subsidized oil. - With Venezuelan supplies dwindling, Cuba turned to other partners; in 2025, Mexico surpassed Venezuela as Cuba's top oil supplier, providing over 12,000 bpd. However, Mexico also reportedly halted shipments in early 2026 due to U.S. pressure. - Russia has also been a supplier of oil to Cuba, with a notable delivery in February 2025. Russian tankers have reportedly used deceptive tactics like signal manipulation and offshore ship-to-ship transfers to deliver fuel. - The financial terms for any new sales under this license will be a significant hurdle for Cuba. Unlike previous subsidized arrangements, any potential purchase will likely require commercial terms such as cash payments or bank guarantees, which may be difficult for the struggling Cuban economy to meet.
