U.S. Extends License For Transactions With Venezuela's PDVSA
Cuba has signed a deal with Algeria to increase the amount of oil products it imports from the North African country as its main supplier, Venezuela, struggles to stay afloat. While no details about the size of shipments were revealed, Cuban state news agency Prensa Latina reported that the deal is "one of the most significant between the two countries in recent times".
Reuters recalls that last year, Cuba imported 2.1 million barrels of crude oil from Algeria, in addition to the oil product purchases, and earlier in January a source from the state oil firm Sonatrach told Reuters that plans for this year are for the same amount.
The news agency suggests the size of fuel shipments will also increase this year based on the fact that Cuba and Algeria agreed for more Cuban doctors to be sent to the North African country. Since Cuba, Reuters notes, lacks cash because of the sanction regimes, it barters services for oil and fuels.
On average, Cuba imports some US$200-300 million worth of Algerian oil products annually.
Cuba could be seen as a collateral victim of the Venezuelan economic crisis. For years, Venezuela was Cuba's biggest supplier of crude and fuels at subsidized prices. Now that Venezuela is reeling from a deep economic crisis and a sharp drop in oil production to the lowest in almost 30 years, Cuba has been gasping for oil, having to ration it until it upped imports from Russia and Algeria.
It also had to suspend operations at its Cienfuegos refinery, which state energy firm Cupet owned jointly with PDVSA until last August when the Cuban company took over the entire facility. Venezuela's state oil company PDVSA held 49 percent in the refinery, and according to a former government official from the South American country, Cuba took over the stake as payment for debts that had been incurred from tanker rentals and professional services, Reuters reported at the time.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More