Venezuela's President Nicolas Maduro (L) speaks with Cuba's President Raul Castro during their meeting in Havana, in this picture provided by Miraflores Palace April 27, 2013. REUTERS/Miraflores Palace/Handout
OilPrice.com: Cuba Scrambles As Venezuela’s Oil Industry Collapses
As Venezuela’s oil industry goes down it flames, it’s looking like it may just take Cuba down with it. Venezuela, once the crude powerhouse of South and Central America, is no longer able to produce enough oil to sustain its own economy, much less those of other countries. Cuba is frantically drilling in search for new reserves and reaching out for new suppliers, but there is no guarantee they’ll be able to stabilize their oil income any time soon.
Cuba became dependent on Venezuelan oil in the 1990s, when they were sold cut-price crude in exchange for the services of skilled laborers in order to bail them out of economic collapse in the wake of the fall of the Soviet Union. Currently, Cuba relies on foreign oil for more than two thirds of its daily consumption, with over 100,000 barrels of crude flowing from Venezuela every day for years. Now, quite suddenly, their dependence on Venezuelan oil has been forced to come to a bitter end.
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WNU Editor: My red flags on this new Cuban crisis were raised last month .... Russia's Energy Minister Admits That Cuba Is 'Broke' (May 30, 2017). There is a domino effect from this crisis .... no oil will mean no power .... no power means shortages will impact Cuba's only source of overseas income .... tourism. No tourism .... means more unemployment and more shortages .... and the cycle continues. As for Venezuela, meeting the needs of Cuba have been disastrous .... Venezuelan refinery reels as PDVSA ships light oil to Cuba, Curacao (Reuters). This is not sustainable, and I will not be surprised if in the coming months this supply to Cuba will itself be cut. So much for pledges of eternal friendship .... Venezuela's Maduro pledges continued alliance with Cuba (Reuters).