Castro: Venezuela’s oil supply cuts stressing Cuba

OREANDA-NEWS. July 12, 2016. Cuba's economy is being "stressed" by a decline in preferential oil and refined products supply from Venezuela, president Raul Castro told the island's parliament last week.

In a 8 July speech Castro said the island's economy was troubled by a fall in export revenues and the contraction of fuel supplies from Venezuela "despite the firm will of president Nicolas Maduro and his government to fulfill these supplies."

"Obviously this has caused additional stress on the Cuban economy," Castro told parliament.

In the past the island has imported around 80,000 b/d of crude and products from Venezuela on preferential terms. This supplements the 50,000 b/d of liquids and 20,000 b/d equivalent of gas Cuba produces from onshore and shallow water reservoirs.

Castro did not indicate the extent supply cutbacks from Venezuela. An official of Cuba's state-run oil company Cupet said on 7 July that there was no reduction in imports from Venezuela, but another official told Argus there appears there is a reduction, "but we cannot say to what extent."

Industry sources say Venezuelan crude and product exports to Cuba since January are about 50pc less than a year ago.

The economy expanded by 1pc in the first half of this year — half the rate the government had projected, Castro said.

Castro's speech to parliament came the day after the government announced an indefinite 50pc reduction in power and fuel use by state agencies. The cutbacks are intended "to avoid blackouts and problems for basic services," the island's vice president for the economy Marino Murillo said 6 July. The reductions will be in place "until there is an improvement in the economic situation," according to other officials.