Trump admin moves Cuba to dependence on US

International Desk :

The Trump administration’s move to ease fuel shipments to Cuba’s nascent private sector is part of a plan to make the island more reliant on the U.S. for supplies, increasing Washington’s leverage to bring about political and economic change, according to people familiar with the strategy.

A quarantine on sending crude to Cuba brought the Caribbean nation to the verge of a humanitarian crisis since the U.S. captured Venezuela’s leader and scared off Mexico with tariffs.

The energy crunch is expected to force the government in Havana to accept oil under U.S. conditions, giving the Trump administration a way to pry loose the Communist Party’s grip after more than six decades of uninterrupted rule.

The plan is continuing to take shape, although tensions are running high after a fatal encounter Wednesday between Cuban authorities and a group of 10 Cubans living in the U.S. aboard a Florida-registered speedboat off the island’s coast. Trump’s strategy includes reassuring energy companies they can sell oil and fuel to private Cuban small and medium-sized businesses, said the people, who asked not to be identified without permission to speak publicly, reports National Post.

Another part of the plan is authorizing the resale of Venezuelan oil to Cuba, with the Treasury Department saying its Office of Foreign Assets Control would “implement a favourable licensing policy” for specific cases. Sales that benefit Cuba’s government are still barred.

Asked about the strategy, a White House official said “Cuba is a failing nation whose rulers have had a major setback with the loss of support from Venezuela and with Mexico ceasing to send them oil.”

The U.S. has maintained a comprehensive trade embargo on Cuba since 1962. The United Nations General Assembly has called on Washington to drop the sweeping measures for decades, citing the negative impact on everything from the availability of basic goods and poverty to healthcare and the economy.

Now faced with an acute energy crisis, Cuba recently started allowing private businesses to import fuel under certain conditions. While shipments have remained small, the goal is to increase their scale to make U.S. companies the main source of the private sector’s oil, replacing decades of dependence on shipments from leftist allies friendly to the government in Havana, the people said.

The new strategy “signals that the Trump administration is recognizing the Cuban private sector as a legitimate partner on the ground,” said Ricardo Herrero, executive director of the Cuba Study Group, a Washington-based think tank. “It’s not something that’s going to replace an entire oil industry, but it’s going to get fuel to where it’s needed the most.”

Wednesday’s incident, however, highlights how volatile the situation is on both sides of the Florida Strait. The Cuban Coast Guard shot and killed four of 10 passengers aboard the vessel, saying the group was heavily armed and planning to launch an insurrection on the island.

Secretary of State Marco Rubio, in measured remarks at a summit of Caribbean leaders in Saint Kitts, announced the U.S. would conduct its own investigation before drawing any conclusions. For now, the shootout is unlikely to derail Washington’s plan, said one of the people familiar.

President Donald Trump has reinvigorated a push to topple the regime in Havana after a January raid that captured Venezuela’s Nicolas Maduro, one of Cuba’s biggest patrons. Rubio, the son of Cuban immigrants, told Bloomberg News this month Havana will need to offer more economic and political freedoms to ease the U.S. pressure.

Trump’s plan follows on a National Security Strategy released in December that asserts U.S. preeminence in the Western Hemisphere, particularly over outside powers like Russia and China — a corollary to the 19th century Monroe Doctrine. While Moscow has long supported Cuba, China has stepped up activity on the island in recent years.

Initial shipments to private businesses have been of diesel, used to power trucks and generators on the island, which has for years suffered from persistent blackouts.

Cuba’s rickety grid is powered by aging thermoelectric plants that need roughly 100,000 barrels of oil per day to meet demand. The island pumps just two fifths of that itself, making it reliant on foreign supplies.

After Trump threatened tariffs on any nation that sent oil to Cuba, the island went more than a month without a major delivery for the first time in more than a decade. Demand for fuel is now overwhelming, according to one Havana-based business consultant, who said the process for bringing in private shipments is shrouded in uncertainty, given fuel imports have long been a government monopoly.

Even so, some food and merchandise importers have recently been able to bring in fuel, said Oniel Díaz, founder of AUGE, which counts about 30 small businesses on the island as clients and has assisted more than 400 clients over the years.

Díaz also flagged potential safety issues. “Importing fuel is not the same as importing beer or chicken,” he said. “There are a lot of technical details that are still unclear.”

Cuba’s unstable electricity has forced many small businesses to invest in solar panels and battery backups. But the fuel crunch is crushing companies that need to deliver items or operate heavy machinery. Everyday Cubans who previously cooked with gas are now preparing food over open fires.

Cuba’s first move to allow private companies to import fuel came in December. But it wasn’t until early this month, as part of contingency plans in the face of the U.S. quarantine, that the government laid out guidelines. Fuel importers can currently only cover their own needs, not sell to third parties.

But “somehow that fuel will end up on the informal market,” Diaz predicted. “The demand is so great that someone will see it as a business opportunity.”

It’s that entrepreneurial spirit — which helped Cubans scrape through the loss of both the Soviet Union and now Venezuela as patrons — that the U.S. is hoping to harness. Rubio told reporters Wednesday that Cuba has “a system that’s in collapse” and that Havana has little choice but to aggressively change course.

“If they want to make those dramatic reforms that open the space for both economic and eventually political freedom for the people of Cuba, obviously the United States would love to see that,” he said.

“We’d be helpful.”
The Trump administration remains interested in replacing Cuban President Miguel Díaz-Canel and has been talking with Raúl Guillermo Rodríguez Castro, the grandson of Fidel Castro’s brother Raúl Castro, one of the people said.

The view from the U.S. administration is that Diaz-Canel has failed on the economy and is incapable of bringing about necessary political and economic change, the person said.

A colonel in Cuba’s interior ministry, the younger Castro is seen as having deep family ties to the military conglomerate that controls large parts of the country’s economy.

Asked about negotiations, the White House official said: “As the President stated, we are talking to Cuba, whose leaders should make a deal.”

The Cuban government has yet to acknowledge the talks, and it’s unclear how amenable Cuban-Americans in South Florida who backed Trump will be to the administration negotiating with a Castro family member.

But if the Venezuelan-American community’s reaction to the U.S. leaving Maduro’s No. 2 in charge in Caracas is any guide, Rubio and the president may already be on solid ground.