The U.S. Treasury Department said on Wednesday it would authorize companies seeking licenses to resell Venezuelan oil to Cuba, according to guidance posted on the department’s website, a move that could help ease the island’s acute fuel scarcity.
Since Washington took control of Venezuela’s oil exports in early January in the aftermath of the capture of Venezuelan leader Nicolas Maduro, the South American country’s supply to Cuba has ceased, worsening an energy crisis in the communist-run country that is hitting power generation and fuel for vehicles, houses and aviation.
Venezuela had been for more than 25 years the main supplier of crude and fuel to its political ally Cuba through a bilateral pact mostly based on the barter of products and services. Mexico, which had emerged as an alternate supplier, also has halted shipments to the Caribbean island since a fuel cargo arrived in Havana in January, according to shipping data.
Trading houses Vitol and Trafigura are now handling the lion’s share of Venezuela’s oil exports, with millions of barrels exported to the U.S., Europe and India, and millions of additional barrels stored at Caribbean terminals for resale.