The United States has decided to relax its ban on sale of Venezuelan oil to Cuba. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC), which announced the decision last week, however said the trade would only be allowed under strictly defined conditions.
Nonetheless, the is expected to partially ease the blockade, which has contributed to excruciating fuel shortage in Cuba. The OFAC also announced guidance for companies to apply for licences to resell Venezuelan oil for commercial and humanitarian purposes in Cuba’s private sector.
Under the guidelines described by the department as “favourable licensing policy,” transactions could proceed so long as they directly benefit the Cuban people or private businesses, and not involving the Cuban government, military, intelligence services or state institutions.
The move marked a shift in Washington’s approach after a strict blockade ordered in early January to cut off Cuba’s long-standing supply of Venezuelan oil, triggering widespread shortages and exacerbating an acute energy crisis. Venezuela had been Cuba’s main supplier of crude and fuel for more than 25 years under a bilateral pact.
Mexico, which had briefly emerged as an alternate provider, also halted shipments earlier this year amid broader pressure. The energy squeeze has affected virtually all aspects of life on the Caribbean island from transport and agriculture to power generation with reports of daily blackouts, disrupted food distribution and hospitals struggling to maintain basic services.
Although the new policy could help alleviate some hardship, it does not lift sanctions on either country and leaves in place prohibitions on sales that benefit state or security sectors. Washington’s adjustment came as regional leaders express concern that Cuba’s deepening humanitarian crisis could have broader consequences for stability in the Caribbean.
Analysts note that the practical impact of the policy will depend on whether private sector actors in Cuba can secure financing and logistics to bring in and distribute fuel under the new licensing framework.
