Venezuela’s oil collapse is plunging Cuba into crisis, Pg7

Key Highlights:

• In December 2025, U.S. seizures of Venezuela-linked oil tankers led to near-complete halt of oil deliveries to Cuba.
• Cuba's reliance on oil for 83% of its power generation has resulted in shortages, including prolonged power cuts and food supply disruptions.
• In 2022, Venezuela supplied 75% of Cuba's crude oil imports, but by 2025, this share decreased drastically due to the U.S. actions.
• The U.S. embargo since 1962 and Cuba's designation as a "State Sponsor of Terrorism" in 2021 have deepened Cuba's financial isolation.
• Cuba's trade deficit worsened to $13.9 billion in 2023, reflecting its weakened purchasing power and restricted access to credit markets.

Detailed Insights:

• Venezuela has been a key oil source for Cuba under the "oil-for-doctors" scheme, exchanging subsidized crude for medical services and technology.
• Cuba imports about 80% of its food, making it vulnerable to refrigeration disruptions caused by power outages.
• Diversification efforts saw Mexico becoming a significant oil supplier to Cuba in 2023, but this has not compensated for the drop in Venezuelan supply.
• The U.S. embargo, initiated after the Cuban Revolution, has significantly impacted Cuba's access to world trade and financial systems.
• Financial exclusion due to the embargo has led to foreign banks refusing services to Cuba, further isolating the nation economically.
• The collapse of Venezuelan oil supply has worsened Cuba's foreign exchange crisis, severely impacting its economy.

Key Concepts Involved:

• Embargo: A government-imposed trade restriction or ban on specific goods or with a specific country.
• Trade Deficit: The amount by which the cost of a country's imports exceeds the value of its exports.
• State Sponsor of Terrorism: A designation by the U.S. government for countries accused of repeatedly providing support for acts of international terrorism.