Russian oil returns to Cuba

A contract signed between the Russian Rosneft Oil Company and Cubametales is expanding the range of Cuba’s energy allies.

Russia promises to become another important energy ally for Cuba, judging by the intergovernmental agreement that comes into force.

Russia is recovering the historic role of oil supplier to Cuba starting this week, in compliance with an intergovernmental agreement signed last year between both countries. The cargo would be getting here to relieve the energy pressures the Caribbean nation is facing due to the contraction in the supply of crude from Venezuela.

Russia’s Rosneft Oil Company reported, according to that country’s press, on the sending to Cuba of a shipment of close to 250,000 tons of crude and diesel through a contract signed last March between that company and the state-run Cubametales import company.

 

Shipping sources cited by Reuters report that that fuel, estimated at 249,000 tons, should start arriving this May 10 to the largest of the Caribbean islands, in what would be the first shipment. However, none of the governments have officially announced the total amount agreed upon.

 

Russia, which is resuming the role played last century by the Soviet Union, is coming opportunely to cover a reduction in the supply of hydrocarbon of the Venezuelan state PDVSA, which has been affected by the international drop in oil prices and Venezuela’s political and domestic conflicts.

 

The Cuban government confirmed last year the contracting of the sending of fuel from abroad among the economic difficulties that led to a 0.9 drop in the gross domestic product (GDP) in 2016.

The government aims to reduce this year by six per cent power consumption.

Cuban economist José Luis Rodríguez mentions a sensitive estimated reduction in the supply of Venezuelan oil to Cuba since mid-last year, of 88,000 barrels of oil per day in the first semester to 55,000 barrels a day in the second semester.

 

Before counting on Russian fuel, Cuba partially compensated for the energy reduction with the purchase of 515,000 barrels of crude from Algeria. But everything indicates that this is not a stable source.

 

Cuban production of crude and gas has also slightly declined in recent years below the ceiling four million tons it had achieved. According to estimates, Cuba needs to cover with imports half of the fuel it uses.

 

Several economic adjustments programmed by the Cuban government for this year are related to energy. The planned spending on fuel in 2017 is reduced by 4.4 per cent (from 8,221,600 to 7,862,070 tons), while the previewed power consumption is cut by six per cent (from 15,310 to 14,523 Gwh), Economy Minister Ricardo Cabrisas advanced when reporting about this year to the National Assembly of People’s Power.

 

Although the diversification of foreign partners, especially for the supply of fuel, offers advantages, it is evident that the pressures still haven’t disappeared for Cuba. The spending restrictions will extend to 2018, judging by recent preliminary reports in a meeting of the Council of Ministers. (2017)

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