US Authorizes Limited Venezuelan Oil Sales to Cuba With Conditions
US Authorizes Limited Venezuelan Oil Resale to Cuba, Demands Reforms
Washington has authorized third-party companies to resell Venezuelan oil to Cuba, but with stipulations designed to ensure proceeds benefit the Cuban people rather than the government, according to guidance released by the US Treasury Department on Wednesday, . The move comes amid a deepening economic crisis in Cuba and follows a recent US takeover of Venezuelan crude sales last month.
The Office of Foreign Assets Control (OFAC), the Treasury Department’s sanctions enforcement arm, will approve applications from companies seeking to resell Venezuelan crude and refined products to Cuba’s private sector. The decision reflects “the United States’ support and solidarity for the Cuban people,” OFAC stated.
However, the authorization is not without conditions. Sales revenue must be deposited into a US-controlled bank account, mirroring requirements already in place for US-authorized transactions with Venezuela’s state-owned oil company, PdV. This measure aims to prevent funds from directly bolstering the Cuban government.
Crucially, OFAC clarified that the resale authorizations are not limited to US companies. Non-US companies can also apply, expanding the potential pool of intermediaries. However, direct purchases from PdV remain restricted to “established US entities” – those with a presence in the US as of .
The move addresses a growing energy shortage in Cuba, exacerbated by the US tightening its grip on Venezuelan crude supplies and pressuring Mexico to reduce its state-owned Pemex’s oil shipments to the island. Cuba is facing “drastically reduced access to crude and refined products” according to reports.
The guidance specifies that the authorized resale will primarily focus on refined products intended for “humanitarian” purposes. Sales to entities linked to the Cuban military, intelligence services, or other government institutions are prohibited. It remains unclear whether jet fuel sales to airports will qualify under the permitted uses.
While the US is opening a limited pathway for Venezuelan oil to reach Cuba through intermediaries, direct imports of crude and refined products from the US are also permitted, subject to the same restrictions on buyers. These direct sales require authorization from the US Department of Commerce, rather than OFAC.
The authorization comes as a tanker carrying fuel, believed to be destined for Cuba, recently paused its journey, reportedly awaiting authorization. The vessel had loaded Venezuelan gasoline earlier in at a port operated by PdVSA.
The US government is also reportedly seeking to reassure oil companies about navigating the new regulations. Concerns have been raised about the complexities of complying with the conditions, particularly regarding identifying and avoiding transactions with prohibited Cuban entities. Officials are aiming to provide clarity to ensure private companies feel comfortable participating in the authorized resale program.
The move represents a partial easing of the US embargo on Cuba, but it remains a highly conditional one. The emphasis on directing funds to the private sector and away from the government signals a continued US policy of seeking to promote change on the island through economic pressure and support for independent Cuban citizens.