U.S. Authorizes Conditional Venezuelan Oil Sales To Cuba

KEY POINTS

• The U.S. announced it will allow the sale and resale of Venezuelan oil to Cuba under strictly defined conditions to alleviate a severe fuel shortage.
• Licenses will be granted for transactions that directly benefit the Cuban people or private businesses, strictly bypassing state and military institutions.
• The move follows an acute energy squeeze triggered by an early January blockade that severed Cuba’s long-standing 25-year supply pact with Venezuela.

MAIN STORY

The United States government announced on Wednesday a strategic adjustment to its sanctions regime, authorizing the sale and resale of Venezuelan oil to Cuba. Under new guidance from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), companies may now apply for licenses to provide oil for commercial and humanitarian purposes within Cuba’s private sector.

This “favourable licensing policy” is designed to ease a blockade that has contributed to a catastrophic energy crisis on the island. For over a quarter-century, Venezuela was Cuba’s primary supplier of crude and fuel.

However, after U.S. restrictions intensified in January and secondary suppliers like Mexico halted shipments under political pressure, Cuba has faced daily blackouts and disruptions to transport, agriculture, and hospital services.

The U.S. shift is targeted; it does not lift broader sanctions on either nation. Transactions are strictly prohibited if they involve the Cuban government, military, intelligence services, or state institutions.

Washington’s adjustment reflects growing regional concerns that a deepening humanitarian crisis in Cuba could destabilize the Caribbean. The practical success of this measure now rests on whether Cuban private sector actors can navigate the complex logistics and financing required to import fuel under this new framework.

WHAT’S BEING SAID

• U.S. Treasury (OFAC) stated the policy authorizes licenses: “For commercial and humanitarian purposes in Cuba’s private sector.”
• The guidance clarifies that deals must: “Not involve the Cuban government, military, intelligence services or state institutions.”
• Regional Analysts noted: “The practical impact… will depend on whether private sector actors in Cuba can secure financing and logistics.”

WHAT’S NEXT

• OFAC will begin reviewing applications from energy firms looking to supply the Cuban private market.
• Private actors in Cuba must now attempt to secure independent transport and storage solutions that do not rely on state-run infrastructure.
• International observers will track whether this fuel influx successfully reduces the frequency of blackouts and improves hospital service stability.

BOTTOM LINE

The Bottom Line is that the U.S. is testing a “humanitarian carve-out” to prevent total energy collapse in Cuba while maintaining its stance against the state government. By linking Venezuelan oil to the Cuban private sector, Washington aims to provide a lifeline to the populace without easing the economic pressure on the ruling administration.

PTDF Reaffirms Commitment To Local Oil And Gas Research Innovation

See more