Russia sends crude oil to Cuba to ease crisis caused by blackouts and social unrest

When a Russian oil tanker arrives east of Havana this week, it will be a relief to Cuban authorities trying to stem growing social unrest.

approximately 715,000 barrels of crude oil They will arrive at the port of Matanzas on Friday; This will be the first shipment of oil from Russia to Cuba in a year. is the head of the island Blackouts and food shortages This has led to mass migration and soured the national mood. The unrest has sparked the largest protests this month since 2021.

The Cuban government blames its problems on the US trade embargo imposed after the 1959 revolution. Brazil, the Caribbean Community and other regional allies are currently urging Washington to ease sanctions, but the idea is a hard sell in an election year when Republican candidates, Donald Trump advocates regime change in Havana If he wins his rematch against President Joe Biden.

Now mired in one of its worst economic crises since the collapse of the Soviet Union, the communist nation finds itself once again beholden to its supporters in the Kremlin.

“I hope the Russian government will accelerate lending on the issue of fuel, wheat, fertilizer, and it will happen as quickly as possible,” Cuban economist Omar Everleny Perez said by phone from Miami. “There has been considerable political will on the part of the Russian government to support Cuba, but in practice these agreements have not materialized.”

The Soviet Union was Cuba’s biggest supporter for decades. The collapse of the USSR in 1991 led to years of hardship on the island, known as the “Special Period”. By some measures, the country is currently experiencing its second season. The increase in inflation, the disastrous state of the economy and hunger experienced by large sectors of the population.

The government’s social security net has also become dilapidated. He recently asked the United Nations for powdered milk to feed children, which Cuba never did. chronic wheat shortage This means bread shortages, Pérez said, and government food rations – which have become increasingly low – are often delayed for weeks.

Cuba and Russia signed an agreement last year that was supposed to ease some of the island’s difficulties, but the rollout has been slow because of Vladimir Putin’s government’s war in Ukraine. The situation could change when a Gabonese-flagged ship owned by Russian company Sovcomflot PJSC, which has been sanctioned by the US, arrives at the port.

The ship departed from the Baltic coast on March 9 and its cargo will begin supplying Havana refineries. This will likely cover demand “for about 35 days”said George Pinone, a researcher at the University of Texas Energy Institute who tracks oil shipments to the island.

This is the largest shipment from Russia since September 2022, according to trade intelligence firm Kpler. This should help control island-wide blackouts, which have been exacerbated by fuel shortages.

“Cuba is short of oil, a total shortfall of about 100,000 barrels per day,” Piñon said in an interview. “Our estimate is that one Russian tanker per month will continue to arrive, which is enough to keep the Havana refinery running at this rate.”

Havana had no choice but to return to Russia’s orbit after some other allies reduced their support.

Its former sponsor Venezuela has reduced fuel deliveries. That’s about 35,000 barrels per day, compared with about 80,000 barrels in 2020, according to Pinon. And although Mexico donates about 25,000 barrels per day, it faces internal pressure to impose tariffs on the island, given that state-owned Petroleos Mexicanos has its own financial problems. Mexico’s president, the finance ministry and Pemex did not respond to requests for comment.

Instead, trade between Moscow and Havana is booming again: Last year about a hundred Russian companies began operations in Cuba. Russian tourism grew 340% in 2023, more than any other nationality, helped in part by the island’s launch of the Mir payment card issued by the Russian central bank. Still, Cuba has received only about half the number of visitors it did before the pandemic, eliminating an important source of foreign currency.

Last year’s agreement was designed to strengthen Russia’s involvement in the island’s economy. In fact, Cuba’s head of foreign trade and foreign investment, Ricardo Cabrías, was in Moscow last week with the hope of continuing cooperation based on that success.

brazil He also stepped forward amid efforts by President Luiz Inácio Lula da Silva to improve relations with Havana, which had deteriorated during his predecessor’s administration. His government has expressed deep concern about the economic decline in Cuba and has partnered United Arab Emirates shipping powdered milk, rice, soybeans and corn to the island; The first consignment of dairy products arrived last month.

Lula regularly pressures U.S. officials to ease sanctions on Cuba, according to a person with direct knowledge of the matter who requested anonymity. But so far those calls have gone unheeded, including to reverse Trump’s 2021 decision to put Cuba back on the US list of state sponsors of terrorism.

Cuba’s inclusion on the list has been a powerful deterrent to foreign investors and financial institutions. While Biden initially said he would lift Trump’s aggressive sanctions, the changes have been modest. Even a limited measure to allow more US financial aid for small businesses on the island was blocked last year due to political blowback after the administration raised concerns publicly.

On your behalf, President of Cuba, Miguel Diaz-CanelThe man who used his X account to congratulate Putin on his re-election on the same day the protests began has recognized the food and energy problem facing his country. But he says it is Washington’s mistake to try to prevent producers, shipping agencies and banks from doing business with the island.

It is “fundamentally” The energy oppression our country is suffering from”he said in a televised interview in the days after this month’s protests. “And because we don’t always have the currency we need to buy these products.”

Things have never been more difficult in Cuba. “No food is available here. Rice is not available here. And if you do find it, everything is very expensive,” said Juan Gonzales, who lives in Santiago de Cuba, the site of some of the biggest demonstrations this month.

Echoing the government’s views, the 68-year-old man said the protests were about food and electricity and not about overthrowing the communist regime that has been ruling for six decades.

“It’s very mean and very strong, but we’re moving forward,” Gonzales said by phone. “Long Live the Revolution!”

(Bloomberg)