The US Treasury Department said on Wednesday it would authorise companies seeking licences to resell Venezuelan oil to Cuba, a guidance posted on the department’s website has stated, a move that could help ease the island’s acute fuel scarcity.
Since Washington took control of Venezuela’s oil exports in early January in the aftermath of its capture of president Nicolás Maduro, the South American country’s supply to Cuba ceased, worsening its energy crisis.
For more than 25 years Venezuela had been the main supplier of crude and fuel to its political ally Cuba through a bilateral pact. Mexico, which had emerged as an alternate supplier, also has halted shipments to Cuba since a fuel cargo arrived in Havana in January, according to shipping data.
The new favourable licence policy comes as large trading houses including Vitol and Trafigura handle the lion’s share of Venezuela’s oil exports, with millions of barrels exported to the US, Europe and India, and millions more barrels stored at Caribbean terminals for resale. US president Donald Trump has warned that Venezuela’s allies that were taking its oil as part of swaps, debt repayments and other agreements must now pay fair market prices for cargoes. These allies include China and Cuba.
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The authorisation comes as US Secretary of State Marco Rubio arrived in the Caribbean on Wednesday to begin talks with leaders who have warned that Cuba’s growing humanitarian crisis could destabilise the region.
Even with the new policy, it is not clear whether Cuba can afford oil purchases without favourable terms. With Cuba struggling to pay for fuel imports on the spot market in recent years, any potential purchase from traders is expected to demand regular commercial terms such as bank guarantees and cash payments.
The treasury’s guidance also makes clear that potential transactions must “support the Cuban people, including the private sector”, including exports for commercial and humanitarian use in Cuba, while transactions involving or benefiting the Cuban military or other government institutions would not be covered.
The Treasury Department said that applicants need not necessarily have an established US entity, and limitations in a licence granted in January to broadly export Venezuelan oil would not apply to Cuba. – Reuters
