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The oil relationship between Cuba and the USSR began in 1960 when American companies refused to refine Soviet crude oil, and Cuba nationalized the refineries (Wikipedia: Cuba Petróleo Union, Foresight Cuba: History and Transformations of the Petroleum Sector). The Soviet Union became the virtually exclusive supplier, and volumes steadily increased to reach 13.1 million metric tons annually in 1985 (equivalent to ~260,000 barrels per day). Cuban domestic consumption hovered around 10-11 million metric tons annually (~200,000-220,000 bpd), and domestic production was negligible: only 6-9% of consumption in the 1980s (938,000 MT at its peak in 1986) (ASCE: Cuba's Transition to Market-Based Energy Prices).
The re-export scheme worked like this: Cuba exported sugar to the USSR at vastly inflated prices —in 1985, the Soviets paid 44.8 cents per pound compared to a world price of only 4.1 cents, a subsidy of 10.9 times the market value—. In return, it received oil at prices below the world market, set according to the CMEA formula from Bucharest (1975): a five-year moving average of world prices that, during the escalations of the seventies and early eighties, meant that Cuba consistently paid less than the spot price (ASCE: Cuba's Transition to Market-Based Energy Prices). According to a declassified CIA report from February 1982 ("Cuba: Implications of Dependence on Soviet Oil"), in 1980 the Soviet price to Cuba was only 40% of the average OPEC price.
The surplus between what was received and what was consumed was sold in Western markets—mainly Western Europe—at spot prices in convertible currency. Notably, documented by Jorge Pérez-López in his seminal 1987 paper in The Energy Journal (IDEAS/RePEc: Cuban Oil Reexports: Significance and Prospects, Academia.edu: Jorge Perez-Lopez), is that in many cases the oil never physically arrived in Cuba: the USSR sold it directly in European markets and deposited the foreign currency into Cuban accounts. There was also a triangular scheme in which the Soviets supplied crude to the Veba refinery in Venezuela located in Germany, while PDVSA sent Venezuelan crude to Cuba, minimizing the costly freight from the Black Sea to the Caribbean (ASCE: Cuba's Transition to Market-Based Energy Prices).
The key numbers: 1983-1987 was the golden era of reexports
Reexports began modestly in the early seventies, when Cuba sold small quantities of refined naphtha in Western Europe. In 1977, what Pérez-López described as a "quantum leap" occurred: exports surpassed 900,000 TM, four times the domestic crude oil production and 10% of gross imports. The peak was reached between 1983 and 1987, when reexports averaged over 3 million TM annually (~60,000 bpd, ~22 million barrels per year) (ASCE: Cuba's Transition to Market-Based Energy Prices, Pérez-López 1987).
A concrete example of the mechanism, documented by the National Bank of Cuba for 1985 (ASCE): Cuba purchased sugar on the world market for $100 million (convertible currency), "sold" it to the USSR generating 1.012 billion pesos (soft currency), financed the import of 4.214 million tons of Soviet oil, reexported 1.978 million tons at world prices (~$27/barrel), and retained 2.236 million tons for domestic consumption. The net result: converting $100 million into approximately $400 million in foreign currency. This financial alchemy was made possible by three peculiarities identified by Pérez-López: Soviet oil cost less than the world price, it was paid for in non-convertible rubles through bartering sugar, and the USSR sent quantities that exceeded Cuba's domestic demand.
The impact on Cuba's income structure was dramatic. According to data from the Banco Nacional de Cuba (February 1985 report, cited by Pérez-López), during 1983-1985, the reexports of oil accounted for more than 40% of all convertible currency income in Cuba. Sugar contributed only 21%, while all other exports made up the remaining 39%. Humberto Pérez, former president of JUCEPLAN (the Cuban planning commission), unofficially confirmed that the reexport of oil surpassed sugar as a generator of foreign currency (Pérez-López 1987). Following the collapse of crude oil prices in 1986 (from ~$27 to ~$13 per barrel), the share of reexports dropped to ~25% of foreign currency income, and by 1988, sugar regained the top position.
A price paradox that did not undermine the business
A counterintuitive fact emerges from the pricing data. Starting in 1986, the CMEA five-year moving average formula began to harm Cuba: as global prices had dropped sharply, yet the five-year average still reflected the high prices from 1981-1985, Cuba ended up paying nearly double the world price in 1986-1987 (26.1 pesos/barrel CMEA vs. 13.1 $/barrel in the market). However, re-exportation continued to function because payments to the USSR were made in transferable rubles through barter of subsidized sugar, not in convertible currencies. The real cost for Cuba was the sugar (purchased at world price), while the income came from oil sold in dollars. As long as the Soviet sugar subsidy (5-10 times the world price) offset the differential, the arbitrage was sustainable (ASCE: Cuba's Transition to Market-Based Energy Prices).
The collapse was abrupt. In 1990, the USSR delivered only 10 of the 13 million tons promised, and all the oil was needed domestically: reexports fell to zero (ASCE: Russian Oil-For-Sugar Barter Deals 1989-1999). In 1991, only 8.1 million tons were delivered. By 1992, imports of Russian crude collapsed to 1.8 million tons, an 86% drop compared to 1989 (Cuba Platform: The Special Period, Cold War Studies, Wikipedia: Special Period). The magazine Oil & Gas Journal estimated in July 1992 that the loss of foreign currency due to the end of oil reexports amounted to $1.6 billion, exceeding the total hard currency income of Cuba from all other sources (OSTI: Cuba's oil crisis spells trouble for Castro). Carmelo Mesa-Lago estimated the Soviet fuel subsidies at a cumulative $6.6 billion (ASCE: Alonso). The "Special Period" had begun.
The Venezuelan Era: Cienfuegos as a Center for Partial Re-Exportation
The Comprehensive Cooperation Agreement signed on October 30, 2000, by Fidel Castro and Hugo Chávez (Latin American Studies: Cuba, Venezuela Sign Oil Deal) initially established a supply of up to 53,000 bpd of Venezuelan crude and derivatives to Cuba, with concessional financing (60% for 90 days, 40% for 25 years at 1% interest). In December 2004, the agreement was expanded, and by 2005 shipments reached 90,000 bpd. The peak was recorded in 2012 with 105,000 bpd according to PDVSA's financial statements (ASCE: Venezuela's Cuban Burden). In return, Cuba deployed between 30,000 and 50,000 professionals to Venezuela—doctors, sports trainers, teachers, and intelligence operatives—(Wikipedia: Cuba-Venezuela relations).
The evidence of reexports in this era is more ambiguous than in the Soviet one, yet substantial. As early as 2001, Venezuelan engineer Hernando Montiel Ortega documented that Cuba declared to CEPAL exports of 5,600 bpd of oil since 1999—the same year the Venezuelan agreement began—(Latin American Studies: Havana exports oil it receives from Venezuela). According to his calculations, Cuba purchased it for less than $8 per barrel and resold it for $15-30, generating around $110 million annually. The main vessel for this was the Cienfuegos refinery, reactivated in December 2007 through the joint venture CUVENPETROL (PDVSA 51%, CUPET 49%) with an investment of $236 million and a capacity of 65,000 bpd (Library of Congress: Cienfuegos Oil Refinery, USGS: Recent Trends in Cuba's Mining and Petroleum Industries). This plant exclusively processed Venezuelan crude and produced refined derivatives for sale to third parties in the Caribbean.
The expert on Cuban energy Jorge Piñón (University of Texas at Austin) introduced an important distinction: the operations of CUVENPETROL —refining and blending crude oil for sale to third parties— were "market price transactions" and should not be confused with the resale of subsidized crude oil. However, the academic Ernesto Hernández-Catá (ASCE: Cuba's Petroleum Trade Statistics and the Impact of Cutbacks in Venezuelan Oil) confirmed that Cuban fuel exports to Venezuela "seem to consist almost entirely of refined and blended products derived from crude oil" imported from Venezuela, and that the ONEI (Cuban statistical office) deliberately omitted these exports from its SITC tables.
The donation element of the Cuba-Venezuela agreement was quantified by Luis R. Luis (ASCE: Venezuela's Cuban Burden): it averaged 45% of the value of oil shipments during 2012-2018, reaching an astonishing 74% in 2012 —compared to the 16% received by other Petrocaribe countries—. In absolute terms, the net subsidy (value of the oil minus market value of Cuban services) reached $4.5 billion in 2012, fell to $1.4 billion in 2015, and became slightly negative by 2018, when Venezuelan aid to Cuba essentially disappeared.
The re-export figures from the Venezuelan period should be approached with caution. Cuba has not published official data on fuel exports, and the estimates derived from the supply-demand balance (~domestic production + imports – consumption = surplus) yield wide ranges. Some sources estimate 40,000-50,000 bpd at peak, but this assumes a domestic consumption of 120,000 bpd, which other sources place higher (150,000-189,000 bpd according to the EIA for 2010), which would reduce or eliminate the surplus (ASCE: Cuba's Petroleum Trade Statistics).
The Collapse: From 105,000 bpd to Darkness
Venezuelan production plummeted from over 3 million bpd in the early 2000s to approximately 800,000 bpd in 2019-2020, dragging down shipments to Cuba (Anadolu Agency: Venezuela's oil wealth). Milestones of the decline: 105,000 bpd in 2012, 47,000 in 2018, 55,615 in 2023, and just 27,400 bpd from January to October 2025 (a 15% year-on-year decline according to Reuters) (Diario de Cuba: Venezuela dispatches one of the lowest figures, CiberCuba: Venezuela increases shipments). In October 2025, shipments hit a low of 11,000 bpd.
Cuba no reexports oil in any significant amount anymore. With a demand of approximately 100,000 bpd, a declining domestic production of 32,000 bpd (2024, with ten consecutive years of decline) (Statbase: Cuba oil production, Worldometer: Cuba oil), and total imports of just 45,400 bpd from January to October 2025, the country operates with a chronic deficit. Mexico emerged as an alternative supplier in 2023 (~16,800 bpd of Olmeca/Istmo crude for ~$372 million annually) (CSIS: 2023 A Year of Mexican Oil to Cuba), but its shipments collapsed by 73% in 2025 to only 5,000 bpd. Russia contributes marginally (~10% of the total in recent months) (Foresight Cuba).
As of February 2026, Cuba has only 15-20 days of oil reserves according to satellite data from Kpler (OilPrice: Cuba's Energy Crisis Deepens, CEDA: As Cuba's Oil Runs Out). Power outages exceed 9 hours daily in Havana, and provinces receive only 2-4 hours of electricity. Bloomberg reported a 50% reduction in nighttime lighting across the island based on satellite imagery (Bloomberg via Lillienews: Much of Cuba Goes Dark, Al Jazeera: From blackouts to food shortages). The government implemented a 4-day workweek, suspended jet fuel supply for one month, and restricted fuel sales (TIME: How the U.S. Oil Blockade Is Impacting Cuba).
A late element deserves cautious mention: in January 2026, El Nuevo Herald quoted a U.S. State Department official stating that between late 2024 and 2025, Cuba received approximately 70,000 bpd of Venezuelan crude and redirected about 40,000 bpd (~60%) to Asia using the "dark fleet" of sanctioned tankers (CiberCuba: Scandal: Cuba Resold 60% of the Oil Sent by Venezuela, CubaHeadlines: Cuba Accused of Re-Selling Majority of Venezuelan Oil). This figure significantly exceeds previous estimates from Reuters (~27,000-30,000 bpd) and, if accurate, would suggest that Cuba was acting as a transshipment point in evading Venezuelan sanctions rather than as a re-exporter for its own consumption. The single source and the political context advise treating this information with caution.
Historical balance: oil as the hidden pillar of the regime
Oil reexports were, for more than two decades, the most important financial instrument of the Cuban government, although rarely acknowledged. A quantitative synthesis of the phenomenon across its various periods:
The total accumulated income from reexports of Soviet oil during 1977-1989 can be conservatively estimated at $3.000-5.000 million (nominal dollars). During the Venezuelan era, if we add the income from refined products in Cienfuegos sold to third parties and the net subsidy component (which acted as an equivalent currency transfer), the figures could amount to an additional $3.000-8.000 million accumulated between 2000 and 2015, although the opacity of the data makes these estimates considerably less reliable.
The loss of the Soviet subsidy was catastrophic: Oil & Gas Journal estimated the cost at $1.6 billion annually (OSTI), and total Soviet subsidies to Cuba averaged $4.3 billion annually between 1986 and 1990, equivalent to 21.2% of Cuba's GNP (Cuba Platform: Special Period, Wikipedia: Special Period). The loss of the Venezuelan subsidy has been more gradual but equally devastating, evolving into the existential energy crisis that Cuba faces today. The re-exported oil was ultimately the invisible lifeblood that kept the regime financially alive during the Cold War, and its disappearance largely explains both the Special Period and the current crisis.
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