United States companies shipped 900,000 barrels of fuel to private Cuban businesses between February and May, according to shipping data. These deliveries represent the first significant arrival of American fuel on the island since the 1959 revolution, occurring under a U.S. Commerce Department exception that allows exports to private-sector entities despite the ongoing trade embargo.
The shipments followed the cessation of oil deliveries from Venezuela and Mexico, Cuba's traditional suppliers, after the United States ousted Venezuelan President Nicolas Maduro in January. While the U.S. Coast Guard and sanctions have limited state-level imports, the exception for private businesses has introduced American gasoline and diesel into a market previously controlled entirely by the Cuban government.
The imported fuel is sold through legal wholesalers and resold on an unregulated market. In Havana, some retailers have sold gasoline for $5 per liter ($19 per gallon), while prices on the black market reached $10 per liter ($38 per gallon) earlier this spring. The Cuban government has responded by authorizing nearly 200 private businesses to distribute fuel at wholesale and approving the first foreign investment venture for fuel imports.
Individual Cubans now face a choice between state-subsidized services that are frequently unavailable and private services they often cannot afford. For example, a bus trip that costs 2 pesos is often replaced by private taxis charging 1,000 pesos due to fuel costs. The imports have allowed some private restaurants and shops to maintain lighting and refrigeration during blackouts, but the lack of affordability for the general population is increasing wealth disparities, according to sociologist Mayra Espina.
The trade also creates new regulatory challenges for both governments. U.S. export rules require that fuel be used only by the private sector and not by the Cuban government, yet the fuel must pass through state-owned ports and storage tanks where private firms pay a fee of 11 cents per liter. While the Cuban government has vowed not to engage in massive privatization, it continues to ease restrictions to prevent total economic paralysis. Future developments depend on whether the Cuban government implements a June reform package to fully open the energy sector to foreign investors and whether U.S. monitoring can track the final destination of resold fuel.