Will Russia Pick Up Cuba’s Oil Tab?

Vladimir Putin and Raul Castro

HAVANA TIMES — An article published this week in the Russian publication Sputnik has some people thinking that Vladimir Putin may be ready to provide Cuba with cheap oil to pick up the slack from Venezuela, its current supplier.

Such a move by Russia would be a modified version of the former Soviet Union’s subsidizing the entire Cuban economy from the 60s until its demise in 1991.

“Russian authorities are studying the option of increasing the supply of crude oil and gas oil to Cuba”, reported Sputnik, whose source the newspaper Vedomosti, quotes a letter from the Russian Vice-President for Economic Development, Alexei Gruzev.

“The Russian Ministry of Energy states that the Rosneft and Lukoil companies have the reserves and the technical conditions to increase the volume of shipments to Cuba and are preparing the corresponding contracts, without discussing the price for now,” writes the newspaper that has had access to a copy of the message.

According to the Russia’s Federal Customs Service, Russia supplied Cuba with $11.3 million in oil products between 2010 and 2015. In January – November 2016, oil products costing $740,000 were exported to Cuba, said Sputnik which doesn’t say how the payment was made.

“Last September, several media reported that Cuban President Raul Castro had asked his Russian counterpart, Vladimir Putin, for a stable supply of crude oil and its derivatives in the face of economic problems facing Venezuela, the main supplier of fuel to the Caribbean island,” since shortly after the late Hugo Chavez took office in 1999.

In a Havana Times article posted on Friday, journalist Vicente Morin reports that Cuba was receiving an average of 90,000 barrels a day from Venezuela and that the reduction of these shipments has in part led to a recession on the island.  Morin notes that an undisclosed portion of the Venezuelan oil, like the Soviet oil in its time, is sold by Cuba to third countries to obtain hard currency.

Sputnik further notes that the reduction of the shipments from Caracas forced Cuba to halve production at the Cienfuegos refinery run by a mixed Cuban-Venezuelan company.

Without knowing the terms of any expanded shipments from Russia, in so far as the quantity of oil and the way Cuba would pay for it, the significance of the report is hard to judge.

In the case of Venezuela, Vicente Morín, noted at least 30,000 Cuban professionals, mostly doctors, were contracted out to Venezuela per year with over 90% of their salaries going towards paying for the oil shipments to the Island.




9 thoughts on “Will Russia Pick Up Cuba’s Oil Tab?

  • I certainly hope that Russia does not threaten U. S. National Security.
    But it would appear that Russians have had a big input into your so called democratic election.
    What the U.S. does going forward has a big influence in the region and certainly regarding Cuba.
    If the Russians have their guy in the White House, then one would therefore assume that they will also have a say in the region with a potential impact on Cuba (for better or for worse).
    There’s no deflection.
    It’s just seeing the ‘bigger picture’.
    Perhaps you would like to reserve this comments section for people to roll out the same old good guy v bad guy remarks regarding the long predicted demise of The Revolution.
    I don’t really wish to be for this side or that side, Mr P.
    I just hope Cuba and it’s Revolution evolve into something better rather than something worse.
    And going forward, also hope that the USA get’s some of it’s democracy back.

  • Indeed it is. I also realize that a discussion about whether a regional power like Russia poses a real threat to US National security is not appropriate for this thread. You seem unable to defend the Castro dictatorship without deflecting. Your failed arguments belie an inherent truth. The Castro revolution is dead.

  • Indeed I do Mr P.
    And I am aware that Russia’s decision on who get’s the keys to the White House may be a bit of a sore point.
    But it’s always good to have a bit of context is it not?
    Especially when it comes to Cuba/Russia/USA and irony??

  • Putin knows, even if Western liberals pretend otherwise, that the NATO troops currently being deployed to Poland & the Baltic states are to defend these countries against Russian aggression. NATO has no plans to invade Russia.

  • Nick, you do realize that this blog is called Havana Times and is about Cuba?

  • Irony?
    Putin choosing who gets the keys to the White House is pretty big irony wouldn’t you say?

  • I agree. I don’t think a deal goes through.

  • Good for Castro, bad economics for Russia. Putin could be playing for strategic position on US door step or bargaining chip to get US to move Obama’s recent troop deployments on his border.

  • Cuba certainly can’t afford to buy Russian oil products at market price. So the only way Cuba gets this Russian oil is if Putin agrees to heavily subsidize the oil shipments and/or some firm of barter. The only thing Raul can offer Putin is cheap labor. Keep in mind that Russian labor these days is pretty cheap but well-educated Cubans are available at practically slave wages. So imagine the irony: the former Socialist Soviet Union exploiting their former favorite Socialist satellite country through the use of savage capitalism. A Walmart in Old Havana can’t be too far off.

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