Cuba will process Russian oil for the first time in two decades, after supplies from Venezuela saw an eight-month hiatus that ended in March, according to a new report from Reuters.
On May 10th, a vessel with 249,000 barrels of Russian crude will reach a Cuban port, which mimics the Soviet Union's previous support of Fidel Castro's regime prior to the 1991 disintegration of Russia's former political arena.
The Venezuelan halt had caused Cuba's Cienfuegos refinery to stop production due to lack of supplies. State-run PDVSA had scaled back the export of its lighter grades to the Caribbean in order to use the fuel to dilute heavier grades.
Cienfuegos is a Soviet-era refinery that had originally been built to process Russian crude. PDVSA later upgraded the facility to refine 65,000 barrels of Venezuelan crude a day.
Rosneft announced on Wednesday that the shipments were part of a new agreement with state-run Cubametals, which authorized the import of 250,000 tonnes of Russian oil and diesel on an unspecified timeline.
"It is very clear that Cuba is diversifying its long-term supply contracts in the event that its October 2000 subsidized oil agreement with Venezuela is terminated," Jorge Pinon, an oil industry expert at The University of Texas at Austin, said.
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Relations between Cuba and the United States - Russia's main geopolitical rival - had begun thawing during former President Barack Obama's administration. President Donald Trump praised Russian President Vladimir Putin for his "leadership" during the 2016 election campaign, but Congress is in the midst of investigating ties between the new White House and Moscow. This process is one of the reasons why the U.S. and Russia remain cold to each other, despite Trump's promises to bridge the gap between the superpowers.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More