HAVANA May 3 Russia has begun shipping large
quantities of oil to Cuba for the first time this century,
sources said, as supplies to the island from crisis-wracked
Venezuela have dwindled.
A Russian oil tanker with 249,000 barrels of refined
products is due to arrive in Cuba on May 10, according to
Reuters shipping sources and others, bringing back memories of
when the Soviet Union supplied all of the Communist-run
Caribbean island’s energy needs.
More tankers apparently will follow.
Rosneft, Russia’s state oil company, announced on Wednesday
it had signed an agreement with Cuba’s state-run Cubametals to
supply 250,000 tonnes of oil and diesel fuel, without providing
The news is sure to raise eyebrows in Washington as its
tense relations with Moscow continue, despite President Donald
Trump’s campaign pledge to improve them.
The Russian company has already become a concern for the
United States. Venezuelan state oil company PDVSA last year used
49.9 percent of its shares in its U.S. subsidiary, Citgo, as
collateral for loan financing by Rosneft.
According to Jorge Pinon, an oil expert at the University of
Texas at Austin, the Cuba deal is equivalent to around 1,865,000
barrels and valued at $105 million at current prices.
In comparison, Russia reported it shipped oil products to
Cuba from 2010 through 2015 valued at $11.3 million.
Cuba consumes 22,000 barrel per day of diesel and 140,000
barrels per day of oil products.
"It is very clear that Cuba is diversifying its long-term
supply contracts in the event that its October 2000 subsidized
oil agreement with Venezuela is terminated," Pinon said.
Cash-strapped Cuba struggled with long blackouts and fuel
shortages after the fall the Soviet Union, but the rise of the
late Venezuela leftist President Hugo Chavez quickly solved the
crisis at the turn of the century.
Since then Cuba has relied on Venezuela, an OPEC member, for
about 70 percent of its fuel needs, including oil for refining
But socialist Venezuela’s subsidized shipments have fallen
by as much as 40 percent since 2014. Potential new suppliers
usually want cash because of Cuba's poor credit rating.
Electricity and fuel rationing to state companies began a
year ago, and more recently there have been gasoline shortages.
A change of government in Venezuela, which has been
experiencing daily protests, would directly threaten the
(Additional reporting by Marianna Parraga; Editing by Leslie