The presence of Cuban security personnel among those killed during the recent U.S. military incursion in Venezuela, which culminated in the abduction of President Nicolás Maduro, has drawn attention to the deep and enduring ties between Havana and Caracas. What appears at first glance as a security detail is, in fact, a window into a long-standing geopolitical and economic relationship—one that has now been gravely disrupted, with profound consequences for Cuba’s economy and daily life.
Bolivarian Alliance and the Oil-for-Doctors Model
Since the rise of the Bolivarian movement under Hugo Chávez, Venezuela has forged an unusually close partnership with Cuba. At the heart of this relationship lay the “oil-for-doctors” arrangement, under which Venezuela supplied Cuba with subsidised crude oil in exchange for Cuban medical personnel, technical expertise, and security assistance.
For Cuba, this arrangement was not merely beneficial—it was existential. The island’s economy, already constrained by decades of U.S. sanctions, depended heavily on Venezuelan oil to keep its electricity grid running and to conserve scarce foreign exchange. Preferential oil imports allowed Havana to sustain basic economic functions without having to purchase fuel at volatile international prices.
U.S. Sanctions and the Sudden Oil Cut-Off
This lifeline has now been severely curtailed. Since December 2025, U.S. seizures of Venezuela-linked oil tankers have all but halted crude deliveries to Cuba. These actions form part of intensified pressure on both Caracas and Havana, but their immediate impact has been felt most acutely in Cuba.
The result has been a cascading crisis: prolonged power outages, acute fuel shortages, disruptions in transportation, and growing stress on food supply chains. What began as a geopolitical shock has rapidly translated into a humanitarian and economic emergency on the island.
Structural Oil Dependence of the Cuban Economy
Cuba’s vulnerability stems from its structural dependence on oil. Oil accounts for around 83% of the country’s electricity generation, with output from oil-fired plants rising steadily from about 12,700 GWh in 2000 to nearly 16,500 GWh in 2023. This reliance extends far beyond electricity.
Oil products constitute roughly 56% of Cuba’s total energy consumption, powering industry, transport, agriculture, and households. In 2022 alone, industrial oil consumption exceeded 65,000 terajoules, while transport and residential use together crossed 30,000 terajoules. When oil supplies falter, the effects ripple across the entire economy.
Energy Shortages and Food Insecurity
The energy crisis has had especially damaging effects on food security. Cuba imports nearly 80% of its food requirements, making refrigeration and transport critical links in the supply chain. Prolonged blackouts disrupt cold storage facilities, leading to spoilage of perishable goods and aggravating shortages in urban and rural markets alike.
Thus, the oil crunch is not merely about electricity or fuel; it directly undermines access to food, compounding social stress in an already fragile economy.
Changing Oil Suppliers and Shrinking Volumes
Until recently, Venezuela dominated Cuba’s crude oil imports. In 2022, it supplied about 75% of Cuba’s oil needs, with Russia accounting for the remaining quarter. By 2023, Cuba began diversifying: Venezuela’s share fell to 58%, Mexico emerged as a significant supplier at 31%, and Russia’s share declined to 11%.
By 2025, however, overall volumes had collapsed. Venezuela was reportedly supplying around 26,500 barrels per day—only about one-third of Cuba’s daily requirement and far below historical levels. Mexico contributed roughly 5,000 bpd, while Russia and other allies supplied only marginal quantities. Crucially, Mexican President Claudia Sheinbaum clarified that Mexico was not increasing supplies beyond historical norms, limiting Cuba’s room for manoeuvre.
The Long Shadow of the U.S. Embargo
The roots of Cuba’s predicament lie in the U.S. embargo imposed in 1962 following the Cuban Revolution and the nationalisation of foreign-owned assets. Far from easing over time, the embargo was tightened in the 1990s through the Torricelli Act and the Helms-Burton Act, the latter locking sanctions into U.S. law and severely restricting executive flexibility.
Beyond trade restrictions, the embargo has effectively excluded Cuba from the global financial system. Dollar transactions must clear through U.S. banks, making international payments fraught with risk. The U.S. redesignation of Cuba as a “State Sponsor of Terrorism” in 2021 further deepened this isolation, leading to widespread refusal by foreign banks to provide services.
Trade Deficits and the Foreign Exchange Trap
Data from UNCTAD shows Cuba sliding from modest trade surpluses in the mid-2000s into deep and persistent deficits. By 2022, the trade deficit had reached $4.4 billion, before ballooning to an alarming $13.9 billion in 2023—the worst on record.
With limited export earnings, restricted access to credit, and severe financial sanctions, Cuba lacks the purchasing power to simply buy oil on commercial terms. The collapse of the Venezuelan oil arrangement following the U.S. intervention has therefore intensified the foreign exchange crisis and crippled the economy.
What to Note for Prelims?
- Oil-for-doctors arrangement between Venezuela and Cuba
- Impact of U.S. embargo on Cuba’s economy
- Helms-Burton Act and Torricelli Act
- Cuba’s dependence on imported oil for power generation
What to Note for Mains?
- Geopolitical spillovers of sanctions and military interventions
- Energy security and economic vulnerability in small economies
- Limits of South–South cooperation under external pressure
- Humanitarian consequences of long-term economic embargoes
