The US Department of the Treasury issued new guidelines on Wednesday, February 25, officially easing some restrictions on fuel supplies to Cuba. This move allows for sanctioned Venezuelan oil to be resold to private enterprises within Cuba, aimed at addressing the increasingly dire humanitarian crisis in the region and preventing complete societal collapse.
According to the latest guidelines and FAQs released by the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, US companies seeking licenses will be authorized to resell Venezuelan oil to Cuba with the condition that the transaction must be used to support the Cuban people and “Micro, Small, and Medium-sized Enterprises” (MSMEs), rather than the Cuban government.
Simultaneously, the Bureau of Industry and Security (BIS) of the US Department of Commerce issued guidelines confirming that US companies holding licenses from the Biden era can utilize the Support for the Cuban People (SCP) license exception to legally export gasoline and diesel to eligible Cuban private entities.
Selling fuel to Cuban state agencies (such as CUPET) or military-backed entities remains illegal. This aligns with the US tactic of “empowering civilian forces while suffocating official structures.”
According to The Wall Street Journal, this loosening of restrictions is not based on political reconciliation but aims to prevent a complete collapse of Cuban society. Since the US cut off Venezuelan oil supplies to Cuba in early January, Cuba’s fuel imports have plummeted by 90%. The island’s power generation, water supply, and food distribution systems are on the brink of paralysis.
Furthermore, a significant amount of humanitarian aid provided by organizations like the United Nations is stockpiled at ports due to a lack of truck fuel, unable to reach those in need.
Former President Trump emphasized that allies of Venezuela, including China and Cuba, must now pay “fair market prices” for oil shipments, no longer enjoying previous barter or debt repayment benefits.
Reuters reported that major traders such as Vitol and Trafigura have stored millions of barrels of Venezuelan oil. However, with Cuba facing a shortage of foreign exchange reserves, these traders are expected to demand standard cash payments or bank guarantees.
A Hong Kong-flagged oil tanker named “Sea Horse” stopped navigation in the Atlantic on Wednesday, suspected of carrying fuel destined for Cuba. Several shipments of fuel have been unable to be delivered since December last year due to US pressure.
Private enterprises in Cuba still need to settle imports through state-owned agencies, posing significant compliance risks for US suppliers who fear being accused of engaging in transactions with sanctioned entities.