Crisis-stricken Cuba caught between ally Russia, nearby U.S.

Oct 27, 2022, 7:57 AM | Updated: Oct 28, 2022, 6:07 am
FILE - The Ramos family cooks dinner over a fire outside their storm-damaged home a week after Hurr...

FILE - The Ramos family cooks dinner over a fire outside their storm-damaged home a week after Hurricane Ian knocked out electricity to the entire island, in La Coloma, Pinar del Rio province, Cuba, Oct. 5, 2022. Cuba's energy crisis has once again thrust the Caribbean island into the middle of an escalating tug-of-war between its seaside neighbor, the United States, and ally, Russia. Cuba sees the need to ease U.S. sanctions at the same time that it is benefitting from an influx of Russian oil. (AP Photo/Ramon Espinosa, File)

(AP Photo/Ramon Espinosa, File)

HAVANA (AP) — When Hurricane Ian tore through western Cuba in late September, causing an island-wide blackout, it left the government grappling with a deepening energy crisis and simmering discontent among Cubans.

It also once again thrust the Caribbean island into the middle of an escalating tug-of-war between its seaside neighbor, the United States, and ally, Russia.

At a time when Cuba is urging the Biden administration to ease U.S. sanctions that it says stifle hurricane recovery efforts, Russian oil has flooded into the island, providing relief to debilitating blackouts.

Russia has shipped an estimated $352 million in oil to Cuba since the start of the Ukraine war, the biggest inflow from Russia this century and enough to cover about 40% of the shortfall in the island’s supplies, according to independent estimates. The sales also potentially alleviated the weight of international sanctions on Russia for its invasion of Ukraine.

In an increasingly complex geopolitical situation, the island nation has been left with its hands tied.

“(It leaves them) between a rock and a hard place,” said William LeoGrande, a professor at American University who has tracked Cuba for years. “Cuba can’t afford to alienate either side in what is shaping up to be a new Cold War.”

But this time, 60 years after the Cuban Missile Crisis, Cuba’s tough spot lies not in nuclear weapons, but rather its deepening energy crisis.

Cuba has depended on foreign oil as its primary energy source for decades.

Until the fall of the Soviet Union in 1991, the Soviets sold Cuba oil well below market price. Later, Cuba hatched a similar deal with socialist ally Venezuela at the height of its oil boom, sending Cuban medics in exchange for discounted petroleum.

Since Venezuela has fallen into its own crisis, though, Cuba has been left short on both oil and a way to pay for it.

Despite speculation that Venezuela may be fronting part of the costs, Cuba’s Deputy Foreign Affairs Minister Carlos Cossío told The Associated Press in an interview Wednesday that “Cuba, of course, pays.”

“Cuba has to buy petroleum for the well-being of the economy, and it’s willing to buy it from whoever sells it to us,” Cossío said.

Meanwhile, key power plants slowly decayed over years of deferred maintenance. The Cuban government struggled to bolster its own energy sector and harness the island’s potential for solar and wind energy.

The lack of investment is something the Caribbean nation blames on American sanctions meant to cripple the nation’s economy.

“The blockade deprives Cuba of indispensable financial resources,” Cuban Foreign Affairs Minister Bruno Rodríguez said at a recent news conference. “The national electric energy system is passing through an extremely grave situation that’s the result of these limitations.”

The American embargo stretches back to the Cold War, though Cuba had a brief respite during the Obama administration. Restrictions came back into full force under the Trump administration, exacerbating economic turmoil caused by COVID-19.

While President Joe Biden has eased certain sanctions, many of the measures have stayed in place. Rodríguez says that they have cost Cuba $3 billion in seven months.

American officials and critics blame Cuba’s economic woes on mismanagement and failures to bolster its private sector.

Preexisting economic turmoil and blackouts came to a head this fall when Cuba’s power grid took a double hit.

In August, a crucial oil storage facility east of Havana caught fire, and in late September, Hurricane Ian tore through western Cuba, throwing the entire island into a blackout.

The Category 3 hurricane left three dead, at least 14,000 homes destroyed and the energy system with long-term damage.

Sporadic hours-long blackouts have fueled discontent, sparking small protests across the island, the first since larger protests in 2021. Many demonstrators last year were detained and issued harsh sentences.

Meanwhile, the island is facing its biggest migratory exodus in decades.

Cuba has found some respite in oil shipped in from Russia, which has been looking for new markets as international sanctions imposed for its invasion of Ukraine have cut it off from many other customers.

Increased sales to China, India and even Cuba have helped Russia ease the economic brunt of sanctions. It’s likely also helped Cuba stay afloat, explained Jorge Piñon, senior research fellow at the University of Texas at Austin’s Energy Center, which tracks the shipments.

“We know that Russian storage tanks are full. … They need to move that stuff,” Piñon said. “So good news for Cuba, and good news for Russia that Cuba is in that situation.”

Russia has sent at least eight shipments totaling 4.3 million barrels of oil, mainly crude, to Cuba since the beginning of the Ukraine war, according to Piñon’s center. And Piñon noted two more shipments are on their way. The center analyzes reports from oil tracking services and independently confirms the data using satellite technology.

Cuba, which largely depends on crude oil for power, runs a crude production deficit of about 60%. It fills the gap with Venezuelan crude — which accounts for about 60% — and Russian — which accounts for about 40%.

Since the turn of the century, Russia had sent only two shipments to Cuba: one in 2017 worth $35.3 million and another in 2018 worth $55.8 million, according to U.N. Comtrade data.

Russia has offered sharp discounts to other nations, though it’s unclear how much Cubans are paying or how they are doing so in the midst of their economic crisis.

Cuba has also contracted at least four floating power plants from a Turkish company. They can be plugged into a power grid for an extra boost of energy. That helped ease the worst of the blackouts, but LeoGrande noted the ships were a patchwork investment, likely expensive, and not a long-term solution.

At the same time, Cuba is among just a handful of countries in the United Nations to avoid condemning Russia for annexation of four regions of Ukraine. Rather, the Caribbean nation abstained from voting.

“They need to maintain a good relationship with Russia,” said LeoGrande. “It’s just too important and a lifeline for them to put it at risk.”

But Cuba’s hesitancy to denounce Russia on a global stage could complicate the slow thawing of its icy relationship with the U.S.

While the Biden administration has not followed through on campaign promises to reverse Trump-era restrictions, both the August fire and the hurricane have opened up a conversation between the two governments.

The Biden administration announced this month it would provide $2 million in hurricane relief to Cuba, following a Cuban appeal for assistance — though the administration made clear that the resources would be distributed through independent aid organizations instead of the Cuban government.

In August, the American government also provided 43 fire suits to Cuba following the blaze in the oil storage facility.

Rodríguez, Cuba’s foreign affairs minister, thanked the U.S. for the October offer over Twitter, saying it “will add up to our recovery efforts in support of the victims” of the hurricane.

He was quick to add, however, that sanctions have hampered recovery efforts, calling them “a constant hurricane.”

___

An earlier version of this story misstated William LeoGrande’s first name.

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Crisis-stricken Cuba caught between ally Russia, nearby U.S.