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What Is Causing Cuba's Fuel Shortage?
Cubans wait hours for buses to arrive. In Havana, drivers wait in long lines at gasoline stations.
Both are signs of the effect of the United States' sanctions on Cuba and its main ally, oil producer Venezuela.
Cuban President Miguel Diaz-Canel recently warned the country’s citizens of difficult times because of limited fuel imports. He urged Cubans to show unity and do their best to increase energy efficiency.
The U.S. government announced sanctions on Cuba's state-operated company Cubametales in July. It also took action against a group of shipping companies and their ships.
This week, the U.S. Treasury Department targeted four other companies and ships they own or operate that bring Venezuelan oil to the island.
When did the fuel shortage start?
For many years, Cuba has purchased crude oil from its allies. It also imports fuel to help satisfy the nation’s demand for oil, about 145,000 barrels a day. It is used to power Cuban factories, industrial centers, gas stations, airports and homes.
Fuel shortages have slowly grown worse since Cuba's main ally, Venezuela, started reducing oil shipments as far back as 2016 after its own production decreased. Venezuela’s economy has since entered a deep recession.
The two countries signed an agreement in 2000. Under the deal, Cuba is able to pay for Venezuelan oil by offering medical help and other services to the South American country.
Until 2015, Venezuela had supplied Cuba with about 90,000 barrels per day (bpd) of crude oil and fuel. But U.S. sanctions on Venezuela in 2017 limited that country’s ability to borrow money. The measures forced a sharp decrease in Venezuela’s fuel production.
As of 2017, Cuba produced just 51,000 bpd of crude oil. That number comes from the most recent information from its National Office of Statistics and Information.
Industry experts say it is hard for Cuba to make up for the loss of fuel by importing at market prices. The country does not have a lot of money available for cash payments. Now, it has fuel shortages.
The Cuban government has attempted to cut back on energy usage in recent years. It has turned off street lights and air cooling equipment in state owned buildings.
Why did the situation suddenly get worse?
U.S. President Donald Trump and his administration announced sanctions in January 2019. They ban U.S. companies from selling fuel to Venezuela’s state oil company for any reason.
The measures also ban any trade in U.S. dollars.
In July, the U.S. government also sanctioned several shipping companies that sail between Cuba and Venezuela. The two nations have since struggled to find shipping companies to carry the oil.
Is Venezuela still supplying oil to Cuba? Yes. But the amount has decreased. And Venezuela has even begun importing its own fuel.
How is Venezuela transporting oil to Cuba?
The Venezuelan state-owned oil company, PDVSA, is now using a large number of its own ships to move Venezuelan crude and fuel to Cuba. Independent shippers are staying away from the market because of the U.S. sanctions.
However, Cuba continues to import fuel from other countries. Ships with oil imports coming from Russia and Caribbean nations are said to have arrived at Cuban ports in recent weeks.
The Reuters news agency says it was unable to identify all the companies transporting oil to the island.
Cuba's president has said the situation should normalize in October as shipments have already been guaranteed for that month.
But industry experts are not so sure. Cuba does not have a large number of oil suppliers since the U.S. ordered an embargo on the island nearly 60 years ago. And the newest sanctions have made problems worse.
Cuba is also low on cash.
What is Cuba doing to stop the crisis?
Cuba reduced public transport and cut industrial production this month to save energy so it can provide oil for hospitals and food distribution programs.
Government officials have been urging people to make the most of natural daylight to save electricity. They have urged the use of more animal power to save on diesel fuel.
I'm Susan Shand.
The Reuters News Agency reported this story. Susan Shand adapted it for Learning English. George Grow was the editor.
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Words In This Story
gasoline – n. a liquid used as a fuel, especially for motor engines
sanctions – n. an order that is given to force a country to obey international laws by limiting or stopping trade with that country
efficiency – n. the ability to do something or produce something without wasting materials, time, or energy
crude oil – n. raw oil that has not been made into gasoline
cash – n. money in any form which is immediately available
embargo – n. a government order that limits trade in some way
distribution – n. the action of providing or sharing something with others