Havana, Cuba. Americas cold war hot wired press are in total panic mode over a Russian oil company shipping oil to Cuba from Venezuela. The shipments are routine business for the overseas division of Rosneft, by in the hands of Americas Press, it is a four alarm fire burning all in sight.

The Russian state oil company Rosneft said it will supply oil and diesel fuel to Cuba. Launching a full scale press panic in America over Russian resumption of trading with its long term Caribbean trading partners in Havana.

The first Russian tanker is to arrive on Cuba’s shore this month. Venezuela under the Maduro government, has been supplying oil since 2000 to Cuba. The shipments peaked back in 2013 at 100,000 barrels per day.

The current Venezuelan government is seeing hard times, with cash scarce in Carracas and debt mounting. The Venezuelan petroleum concern Petroleos de Venezuela just averted default with a $2 billion dollar debt payment last month, and just recently the Maduro government seized a manufacturing plant owned by General Motors locally.

Less Venezuela oil imports in Cuba contributed to depressed economic prospects, but the first Russian oil tanker is expected to deliver 240,000 barrels of refined product, Moody’s writes. Moody’s analysts estimates Cuba’s economy contracted by around 1% in 2016, with economic crisis in Venezuela and October’s Hurricane Matthew weighing heavily on economic output.

The Rosneft deal does little to offset the negative trends stemming from the loss of financial support from Venezuela to Cuba, and the apparent halt in US-Cuban repair of relations under a President Donald J. Trump administration.

More than likely it is Rosneft supplying oil to Cuba at preferential terms (either at subsidized rates or a financing scheme which the market would not otherwise consider). While the announcement provides little detail, it is unlikely the terms of the contract are as favorable as those under which Venezuela has with Russia.

Analysts say if Rosneft terms do not exacerbate Cuba’s external funding pressures, the agreement could help to alleviate Cuba’s chronic energy shortages, which has undermined economic output and has the potential to threaten social stability were the difficulties to intensify.

The Cuban government began rationing electricity use last year, and in April 2017 the Cuban media confirmed that the sale of premium gasoline (which Cuba does not have the means to refine and therefore must import) was being heavily restricted due to waning inventories.

The new Trump administration has signaled a shift away from ex-President Obama’s decision to ease sanctions and support increased American visitors. A marked increase in American visitors had brought Cuba a welcomed 15% increase in tourism revenues in the first half of 2016. Meanwhile, Trump looks to pursue a coldwar anti-Cuban policy that will require all nations working together to avoid harm from the big bully on the block.

Tags: ; ; ; ; ; ;