After blocking foreign oil shipments to Cuba, plunging the country into its worst crisis in decades, the Trump administration has begun allowing U.S. companies to send fuel to private businesses in Cuba.
The Trump administration is also permitting businesses to apply for licenses to sell Venezuelan oil to nongovernment entities in Cuba, like humanitarian organizations and small businesses.
President Trump’s efforts to help businesses like food markets and transportation companies alleviate the crushing oil shortage signals what experts say is a strategy to bolster the country’s small struggling private sector while circumventing the Communist government the United States seeks to topple.
Secretary of State Marco Rubio said the private sector could eventually play a role in reviving the country if it were able to grow in a significant way.
“The private sector in Cuba is quite small,” Mr. Rubio told reporters this week at a summit of Caribbean nations. “It exists, but it’s small, and it certainly, in and of itself, does not have the capacity to deal with the scale and scope of the challenges they’re facing. But if the Cuban economy were a functioning economy, it would have a much larger private sector.”
Cuba’s government has long blamed a U.S. trade embargo and sanctions for crippling the country, but the Trump administration says the Communist regime, which controls nearly every sector of the economy, is to blame for running Cuba into the ground.
The Trump administration wants to encourage the Cuban government to undertake changes to allow private enterprise to flourish, said a senior U.S. official who spoke on the condition of anonymity to discuss sensitive diplomatic matters.
Though the initial shipments of oil to Cuba are modest, experts say the Trump administration is sending a message to Cuba’s government that digging out from the country’s economic free fall will require cooperation with the United States.
“The strategy here is to show the Cubans and the world that the only lifeline that Cuba has left is the United States,” said Ricardo Herrero, executive director of the Cuba Study Group, a nonpartisan policy and advocacy group in Washington. “That doesn’t mean choke them off. That means leave it clear that they have become a de facto dependency of the United States.’’
The United States can use oil, he added, as “leverage to extract concessions from the Cuban regime.
President Trump told reporters on Friday that the administration was in talks with Cuba. “Maybe we’ll have a friendly takeover of Cuba,” he said, adding, “Cuba is, to put it mildly, a failed nation. It’s really right now a nation in deep trouble, and they want our help.”
The Commerce Department made two key changes this week allowing oil shipments to Cuba.
One allows petroleum products to be sent to Cuba without a special license as long as the shipments are not destined for any businesses, groups or individuals tied to the Cuban government, military or labor unions. The second change permits Venezuelan fuel to be sold to private businesses in Cuba.
Venezuela had been Cuba’s main source of foreign oil before the U.S. military invaded Caracas, the Venezuela’s capital, in January and seized the country’s leader. The Trump administration took control of the Venezuelan oil industry and blocked fuel shipments to Cuba, exacerbating an already painful energy shortage.
The Trump administration also announced tariffs on any country that provides oil to Cuba.
The Cuban government has denounced the Trump administration’s stranglehold on foreign oil, but were willing to allow fuel to be supplied to the private sector.
“Even if there is an energy blockade, we are not giving up on receiving fuel in our country,” President Miguel Díaz-Canel said. “That is a right we have, and we will do everything we can, and we are doing everything we can, so that the country can once again have fuel income and fuel supplies.”
Easing its stranglehold on oil to Cuba is a way for the Trump administration to maintain a hard line against the regime, “but not going so far that they are blamed for an outbreak of cholera,’’ said John S. Kavulich, president of the U.S.-Cuba Trade and Economic Council, a private, nonpartisan organization.
The Cuban government has announced a series of austerity measures, such as cutting back the hours businesses are open. People are having to walk long distances because public transportation is at a near standstill. Several airlines suspended service to the island because there is not enough aviation fuel, a devastating blow to the country’s tourism industry.
Private businesses said giving them access to oil was a badly needed lifeline for them and a first step toward trying to avert a deepening humanitarian crisis. Food prices are surging and a lack of fuel is causing hospitals to call off surgeries and schools to cancel classes. A lack of diesel fuel to supply water pumps has set off water shortages.
“The private sector is the beating heart right now of Cuba,” said Hugo Cancio, a South Florida businessman who owns an online supermarket that Cubans in the United States use to buy goods for their families on the island.
He said he can now send fuel to Cuba needed to transport merchandise.
“I have providers telling me, ‘I’m going to lose 100 containers of chicken, because it’s at the port, there’s no fuel to go get it, and it’s going to go bad,’” he said.
While Cuba produces some of its own oil, experts say its reserves will run out in a matter of weeks. The Trump administration measures have created what some experts describe as an existential crisis for the Cuban communist government, which took power after Fidel Castro overthrew a dictatorship in 1959.
Aldo Alvarez, who owns an online store in Cuba, said containers had been piling up at a port because there was no fuel to move the goods and he has had to shut down his business.
“We are all up against the clock to avoid a larger crisis,” he said.
Still, Mr. Alvarez added, business owners unfamiliar with the logistics of importing gasoline and lacking storage will need time to adjust to the new rules adopted by the Trump administration.
“This is a new scenario for everybody,” he said.
Zolan Kanno-Youngs contributed reporting from Washington. Michael Crowley also contributed reporting.
Frances Robles is a Times reporter covering Latin America and the Caribbean. She has reported on the region for more than 25 years.
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