US Eases Restrictions to Allow Venezuelan Oil Exports to Cuba’s Private Sector in Bid to Address Island’s Severe Energy Crisis
Caracas / Havana / Washington – February 26, 2026 – In a significant policy shift aimed at alleviating one of the worst energy crises in Cuba’s modern history, the United States has quietly eased long-standing sanctions to permit limited exports of Venezuelan crude oil and refined products to Cuba’s emerging private-sector businesses. The move, confirmed by senior U.S. officials speaking on condition of anonymity, represents the most substantial humanitarian and economic adjustment toward Havana since the Biden administration’s partial reopening of remittances and flights in 2022—and the first meaningful sanctions relief under the second Trump administration.
The policy change, implemented through a new general license issued by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), allows U.S. persons and companies to engage in transactions involving Venezuelan oil that is ultimately destined for sale to or use by Cuba’s non-state sector—specifically private micro, small, and medium-sized enterprises (MSMEs) licensed under Cuba’s 2021 economic reform framework. State-run entities, including Cuba’s Unión Cuba-Petróleo (CUPET) and the Cuban military’s business conglomerate GAESA, remain fully blocked.
Scope and Mechanics of the New License
Under the revised rules:
- Venezuelan PDVSA-origin crude, fuel oil, diesel, gasoline, and liquefied petroleum gas (LPG) may be exported to Cuba if the end-user is a verified private Cuban MSME.
- U.S. banks and financial institutions may process payments related to such transactions.
- U.S.-flagged vessels and aircraft may transport the products without risking secondary sanctions.
- The license explicitly excludes any transactions benefiting Cuban government officials, military entities, or entities linked to human-rights abuses.
U.S. officials emphasized that the measure is narrowly tailored and reversible. “This is not normalization,” one senior State Department official told reporters. “It is a targeted humanitarian carve-out to prevent widespread blackouts, food spoilage, and medical shortages while Cuba’s private sector—encouraged by our own policy—tries to fill gaps left by the collapsing state system.”
Cuba’s Energy Catastrophe: Context and Scale
Cuba has endured near-total collapse of its power grid since late 2024. Daily nationwide blackouts now average 18–22 hours in many provinces. The Mariel and Antonio Guiteras power plants—two of the island’s largest—have been offline for months due to lack of fuel and spare parts. Domestic oil production has fallen below 35,000 barrels per day (from a peak of 55,000 in the early 2000s), and Venezuela—once Cuba’s principal supplier—has slashed deliveries from 55,000 bpd in 2019 to under 15,000 bpd in 2025 amid its own economic crisis and U.S. pressure.
The result has been catastrophic:
- Hospitals operating on generators with intermittent fuel.
- Food rotting in non-refrigerated markets and warehouses.
- Water-pumping stations offline, forcing families to collect water from contaminated sources.
- Small private businesses—cafés, paladares (private restaurants), bed-and-breakfasts, and repair shops—shuttered or operating by candlelight.
- Mass layoffs in tourism and services sectors as visitors avoid an island without reliable electricity or air conditioning.
Cuba’s private sector, legalized and expanded under Decree-Law 46/2021, now accounts for roughly 35% of employment and a growing share of GDP. Many of these MSMEs have been hardest hit by the energy crisis, unable to compete with state entities that receive what little fuel remains.
Behind the Policy Shift
The decision followed months of quiet diplomacy and lobbying by Cuban-American business groups, humanitarian organizations, and even some Republican lawmakers from Florida who argued that allowing private Cuban entrepreneurs access to fuel would weaken state control and demonstrate the superiority of market mechanisms. Influential voices within the Trump administration—particularly those focused on countering Chinese and Russian influence in the Caribbean—saw strategic value in strengthening Cuba’s non-state economy as a long-term pressure point on the Communist Party.
Venezuela, heavily indebted to U.S. sanctions pressure, welcomed the move as a lifeline for PDVSA. Nicolás Maduro’s government has quietly signaled willingness to increase exports to Cuba’s private buyers if payment can be routed through permitted channels.
Reactions and Criticisms
Cuban government media described the policy as “insufficient and manipulative,” insisting that only full sanctions relief can solve the crisis. Opposition activists and exiled groups welcomed the step but warned it could be used by the regime to funnel fuel to military-linked businesses through shell companies.
Humanitarian organizations such as Oxfam, Catholic Relief Services, and the Cuban Observatory for Human Rights called the license “a necessary but limited first step,” urging expansion to include direct humanitarian fuel shipments and broader private-sector access.
In Miami, reactions were mixed. Hardline exile organizations condemned any sanctions relief as “rewarding dictatorship,” while younger Cuban-American entrepreneurs and pro-engagement groups hailed it as pragmatic support for ordinary Cubans.
Broader Implications
The policy arrives at a moment of acute vulnerability for Cuba: rolling blackouts, record emigration (more than 500,000 Cubans reached the U.S. southern border in FY 2025), and growing street protests over food and power shortages. By directing relief toward the private sector, Washington is betting that economic empowerment of ordinary Cubans may gradually erode the state’s monopoly on power and resources.
For the Global South—including nations like South Sudan that rely on Cuban medical brigades—the move highlights the cascading effects of sanctions, energy poverty, and geopolitical maneuvering. Whether this narrow opening evolves into broader engagement or remains a one-off humanitarian gesture will depend on Cuba’s response, Venezuela’s delivery capacity, and the political winds in Washington.
For millions of Cubans facing another dark night without electricity, the policy offers a faint glimmer: the possibility that private initiative—long stifled—might finally help keep the lights on.
By: Juba Global News Network | JubaGlobal.com
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