Amid economic and political turmoil, Cuba has received at least $322 million worth of oil from Russia since the start of the war in Ukraine as authorities struggle to offset diminished shipments from close ally Venezuela, according to estimates by oil industry experts.
The 4 million barrels of Urals crude oil received by Cuba “is the largest quantity since the collapse of the Soviet Union,” said Jorge Piñón, a senior research fellow at the University of Texas at Austin’s Energy Center who closely tracks oil shipments to the island.
The figure marks a significant increase compared to recent years when Cuba received $35 million worth of Russian petroleum in 2017 and $55.5 million in 2018, but nothing in the following years, according to United Nations data on world trade. And it turns the Caribbean island into another market for oil from Russia, helping the country evade international sanctions for its invasion of Ukraine while keeping its industry afloat.
“All of this is very convenient for Russia because, due to the sanctions, Russian ports are full of oil tankers,” Piñón said. “This allows them to continue to monetize the oil instead of shutting down wells, which are expensive to reopen later.”
Cuba is one of the few countries in the Western Hemisphere that has abstained from condemning Russia’s invasion of Ukraine in international forums such as the U.N. The island’s state media also frequently publishes disinformation about the war, and Cuban officials have publicly echoed Russia’s talking points to justify the aggression.
Cuba is going through its worst crisis since the 1990s, and it desperately needs a cash injection. Adding to the oil shortages, the lack of maintenance and replacement of old power stations has crippled the island’s electrical grid. Blackouts were already frequent even before Hurricane Ian pushed the system to its limit, leaving the entire nation in the dark on Sept. 27.
Following the devastation left by the hurricane, Cuba’s population continues protesting the energy cuts, food shortages and lack of political freedoms almost daily, banging pots and pans and taking to the streets in the evenings in different parts of the country.
According to official Cuban data, the country needs about 115,000 barrels per day to meet oil demand. Cuba’s domestic oil production accounts for only 38,000 bpd, while Venezuela is sending around 57,000 bpd, according to Reuters data. Russian oil imports, 11,000 bpd, are helping to fill the gap left by Venezuela, where state oil company PDVSA has not been able to increase its production at the pace promised by the Nicolás Maduro government.
The monthly oil market report released by OPEC shows a drop in Venezuela’s oil production to 659,000 bpd in September from 714,000 in the second quarter of this year.
The crude Urals oil sent by Russia is of good quality and can be refined at local facilities in Havana and Cienfuegos into gasoline, diesel and liquefied gas for cooking, Piñón said.
The one question remaining, he notes, is who pays for the oil.
“Not Cuba,” he believes, as the cash-strapped island lacks the financial resources. Instead, he described a “triangular” relationship in which Maduro’s government is likely paying the tab. Under that scheme, Russia would send the oil and Venezuela could pay or return that amount of oil at a later date.
There is also another possibility: that Russia is extending credits to Cuba to buy the oil. Earlier this month, Ricardo Cabrisas, vice president of the island’s Council of Ministers, traveled to Moscow and met with Russian Deputy Prime Minister Dmitry Chernyshenko and several high-ranking officials, including the vice minister of energy, to discuss economic cooperation.
But Russia’s own financial constraints, made worse by the war it launched against Ukraine, also limit what the government of President Vladimir Putin can pay in return for Cuba’s diplomatic support.
In the meantime, Cuba’s needs are pressing, and public discontent seems to be growing by the day, as the videos of protests published on social media show. In a recent demonstration in Bejucal, a town near Havana, residents suddenly began shouting, “¡Libertad!” — freedom — in front of several government officials and military officers, one of the videos shows.
The hopes that the country could stabilize electricity generation have quickly evaporated after the state Electric Union again said Friday that the Antonio Guiteras power station in Matanzas, where the failure that left the country without electricity began, is again out of service.
“Unfortunately, because in the end, it is always the people who have to pay for all this, Cuba does not have two things that it needs: time and money,” Piñón said. “The reconstruction or recapitalization of the entire Cuban electricity sector is going to take years and billions of dollars.”
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© 2022 Miami Herald
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