US to Reassure Oil Firms on Private Cuba Sales as Crisis Worsens

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(Bloomberg) — The Trump administration plans to reassure energy companies that they can sell oil and fuel to private Cuban businesses, after a renewed US pressure campaign spurred warnings of a humanitarian crisis on the island.

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The US government will underscore its energy ban applies only to sales to the Communist government, which Washington is squeezing to try to bring change to the Caribbean island of about 10 million people, according to a US official. 

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President Donald Trump has reinvigorated a push to topple the six-decade-old regime in Havana following a January raid that captured Venezuela’s Nicolas Maduro, one of Cuba’s biggest patrons. 

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Historically, almost all fuel imported into Cuba was purchased by the state, with Venezuela and later Mexico as the main oil sources. Those supplies have dwindled amid a US oil quarantine on Venezuela and diplomatic pressure on Havana’s other allies in the region.

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However, the United Nations has warned the US campaign is having “an increasingly severe impact” that has affected hospitals, public sanitation, water delivery and food distribution. The global body called on all nations to end economically coercive measures. 

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The lack of gasoline also has disrupted the government’s ability to deliver food, the UN said earlier this month. At particular risk are schools, maternity homes and nursing homes, “with the most vulnerable groups being disproportionately impacted.”

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While the Cuban government in recent months started allowing small- and medium-sized businesses to import fuel under certain conditions, they are required to use the fuel themselves rather than resell it, and the quantities have remained small.

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Maduro’s removal ended Venezuelan oil exports to the Cuban government, and the Trump administration used the threat of tariffs to pressure Mexico to stop its shipments. 

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Since Maduro’s ouster, the State Department has sent $9 million of humanitarian aid to Cuba consisting of emergency rations, solar lamps and other goods. The US goes through the Catholic Church to bypass the government and get the aid directly to Cubans.

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The move to clarify the scope of legal oil sales is part of an effort by the Trump administration to draw a distinction between the Cuban regime and Cuban people, the official said.

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The new US guidance for exporters and re-exporters will come from the Commerce Department and the Treasury Department, according to this person. It will highlight that sales of fuel products to Cuban businesses and individuals doesn’t require a specific license and are permitted under existing law, the official said.

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Secretary of State Marco Rubio told Bloomberg News in an interview earlier this month that the Cuban Communist regime will need to give its people political and economic freedom for the US to ease pressure. 

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Havana has said it’s open to talks with the US but that its system of government and economy are not up for negotiation.

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—With assistance from Jim Wyss.

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