US Authorizes Resale of Venezuelan Oil to Cuba, Easing Fuel Crisis

The US Treasury Department announced on Wednesday that it will permit companies to apply for licenses to resell Venezuelan oil to Cuba. This development aims to alleviate the island’s severe fuel shortage, which has intensified since the US imposed restrictions on Venezuelan oil exports earlier this year following the capture of President Nicolás Maduro.

For over 25 years, Venezuela has been the primary supplier of crude oil and fuel to Cuba through a bilateral agreement. However, since January 2025, the cessation of Venezuelan oil shipments has exacerbated Cuba’s energy crisis. Mexico, which had started to serve as an alternative supplier, also suspended fuel deliveries after a shipment arrived in Havana earlier this year, according to shipping data.

New Licensing Policy and Its Implications

The newly established licensing policy comes as major trading firms, including Vitol and Trafigura, manage a significant portion of Venezuela’s oil exports. These firms have been shipping millions of barrels to various markets, including the US, Europe, and India, while also maintaining substantial reserves at Caribbean terminals for resale.

Despite this, challenges remain for Cuba. The US Treasury emphasized that any transactions must “support the Cuban people, including the private sector.” This stipulation suggests that exports must be aimed at commercial and humanitarian needs within Cuba. However, transactions that benefit the Cuban military or government institutions will not be eligible under the new guidelines.

Even with the authorization in place, it remains uncertain whether Cuba can afford to purchase oil without favorable terms. The island has struggled to secure fuel imports on the spot market in recent years, leading to expectations that any prospective purchases will require traditional commercial terms, including cash payments and bank guarantees.

Political Context and Regional Stability

This announcement comes as US Secretary of State Marco Rubio embarks on a visit to the Caribbean to engage with regional leaders. Many of these leaders have raised concerns that Cuba’s escalating humanitarian crisis could lead to instability in the area.

Former President Donald Trump has previously warned that Venezuela’s allies, including China and Cuba, must now pay fair market prices for oil, a shift that further complicates the economic landscape for both nations.

The US government’s decision to ease restrictions highlights a significant shift in policy that aims to address immediate humanitarian needs while navigating the complex geopolitical dynamics in the region. As companies begin to seek licenses for reselling oil, the impact on Cuba’s fuel crisis and its broader implications for regional stability will be closely monitored.