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Cuba’s Economy Crumbles as U.S. Oil Cutoff Halts Tourism and Fuels Crisis

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U.S. Oil Embargo Triggers Immediate Fuel Shortage The Trump administration ended oil shipments to Cuba in early 2026, cutting off the “hundreds of millions of dollars‑worth of fuel” that powered the island’s power grid and transport network. The stoppage followed U.S. pressure on Venezuela and threats to Mexican oil exports, leaving Cuban airports and buses without jet fuel. By February 2026, schools suspended classes, hotels closed, and airlines from Russia and Canada canceled flights due to lack of fuel [1].

Tourism Collapse Undermines Post‑2015 Recovery After Obama restored diplomatic ties in 2015, tourism surged, supporting classic‑car tours like those run by driver Mandy Pruna, whose 1957 Chevrolet featured in the 2015 embassy flag‑raising. The 2026 oil cutoff coincided with a sharp drop in visitor arrivals, prompting the UK and Canada to advise against non‑essential travel. With hotels near vacant, many workers were furloughed and the tourism‑dependent informal economy stalled [1].

Food Imports Stagnate, Prices Soar, Hunger Risks Rise Private firms that imported U.S. food halted operations because power outages crippled refrigeration, forcing vendors to pay two‑to‑three times higher prices for restocking. Hospitals reduced services as supply chains faltered, and trash accumulation increased in Havana. The combined effect threatens widespread hunger as the government lacks external subsidies [1].

Political Pressure Calls for Economic Liberalization President Donald Trump warned that “there’s no oil, there’s no money, there’s no anything,” while Secretary of State Marco Rubio urged Cuba to open its centralized economy amid the crisis. The U.S. demands structural reforms as the island faces a multi‑sector collapse. Meanwhile, classic‑car driver Mandy Pruna has suspended his license and is weighing emigration to Spain for his family [1].

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Timeline

1970s – Venezuela pumps up to 3.5 million barrels per day, supplying over 7 % of global crude, a peak that later collapses amid mismanagement, sanctions and political upheaval [1].

2024 (year‑end) – Proven oil reserves reach ≈ 303 billion barrels (≈ 18 % of world total), cementing Venezuela’s status as the holder of the largest proven reserves [24].

End 2025 – Daily oil output falls to roughly 860,000 bbl, less than 1 % of world production, reflecting a decade of decline after the 1970s boom [1].

Dec 17 2025 – President Trump demands Venezuela repay seized U.S. oil assets and announces a “blockade” of sanctioned tankers, intensifying pressure on Caracas [25].

Jan 3 2026 – U.S. forces capture President Nicolás Maduro and his wife in a predawn raid on Caracas, killing dozens of Venezuelan and Cuban security personnel and sparking regional fallout [3][18][29].

Jan 5 2026 – Trump vows to tap Venezuela’s oil, urging U.S. firms to invest billions while experts warn that reviving output will require ≈ $100 billion and a decade of work [22]; analysts also say any price shock is unlikely in the short term [23].

Jan 7 2026 – Trump announces that Venezuela will deliver 30–50 million barrels of crude to the United States, pledging proceeds will “benefit the people” of both nations [29]; the White House simultaneously declares it will control all Venezuelan oil sales indefinitely, with the first tranche expected to be 30–50 million barrels [5].

Jan 8 2026 – Trump tells reporters U.S. oil companies will “go in” to Venezuela after the raid, linking the military action directly to a future energy‑sector revival [21].

Jan 9 2026 – Trump posts that at least $100 billion will be invested by major oil companies in Venezuela’s oil sector, framing the pledge as a commitment from the private sector [18]; the same day, oil CEOs are slated to meet Trump on Friday to discuss investment, though executives remain cautious and cite the need for rule‑of‑law guarantees [19]; Trump also urges rapid investment, reiterating the $100 billion target [28]; ExxonMobil CEO Darren Woods warns Venezuela is “uninvestable” under current commercial frameworks [4][16]; Reliance Industries says it will consider Venezuelan purchases only if non‑U.S. access rules are clarified [20].

Jan 10 2026 – Trump pushes a $100 billion Venezuela oil investment at a White House meeting, while Exxon’s Woods repeats that the country is “uninvestable” without legal reforms [4]; Trump tells executives he will personally decide which U.S. firms may enter Venezuela’s oil fields [16].

Jan 11 2026 – Trump threatens Cuba with “zero oil or money” unless it strikes a deal, tying the ultimatum to the Maduro capture [14]; he also announces U.S. access to Venezuelan oil and notes possible rare‑earth deposits, though extraction remains uncertain [15]; the Dow Jones nears 50,000, with analysts citing Venezuela’s massive reserves as a market backdrop [13].

Jan 12 2026 – On Air Force One, Trump says he is inclined to keep ExxonMobil out of Venezuela after Woods called the country “uninvestable,” and he signs an executive order protecting Venezuelan oil revenue from seizure [12][27].

Jan 16 2026 – Interim President Delcy Rodríguez uses her State of the Union address to push for foreign oil investment, cites the Trump pledge to control oil revenues, and announces that oil proceeds will flow into two sovereign wealth funds for health and infrastructure [11].

Jan 22 2026 – Fourteen Senate Democrats send a letter to White House chief of staff Susie Wiles demanding disclosure of any financial interests in firms involved in Venezuela oil deals, flagging Vitol executive John Addison’s participation in private talks as a potential conflict [10].

Jan 29 2026 – U.S. diplomats warn of an imminent naval blockade of Cuba, the first since 1962, after a Caracas raid killed 32 Cuban officers and disrupted Venezuelan oil supplies to Havana [9]; the administration also completes a $500 million sale of formerly sanctioned Venezuelan crude, routing proceeds to a U.S.–controlled account in Qatar [8].

Jan 30 2026 – Venezuela’s National Assembly passes a hydrocarbons reform allowing private, including foreign, firms greater autonomy and direct access to oil‑sale proceeds; the bill awaits interim President Delcy Rodríguez’s signature [2]; the same day, the Venezuelan legislature votes to approve a new contract model for foreign operators, signaling a shift toward reopening oilfields to U.S. and other investors [1].

Feb 1 2026 – Mexican President Claudia Sheinbaum pledges to dispatch humanitarian food aid to Cuba within days, while Trump urges Mexico to halt oil shipments to the island, highlighting U.S. pressure on Cuba’s energy imports [7].

Feb 5 2026 – Cuba’s deputy foreign minister says Havana is ready for “meaningful” dialogue but rejects any discussion of regime change, condemning U.S. oil‑tariff threats and describing the sanctions‑induced energy crisis as “equivalent to war” [6].

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