Vanguard Energy, a fuel marketing company based in Coral Gables, Miami-Dade County, Florida, has signed a contract with a Cuban importing agency to lease storage facilities owned by CUPET and to deliver gasoline and diesel via tanker ships directly to Cuba, as revealed by the Miami Herald.
The fuel will be sold exclusively to the Cuban private sector, humanitarian and religious organizations, and entities such as the United States Embassy in Havana.
Bloomberg described the agreement as the largest shipment of American fuel to Cuba since the Eisenhower administration, during the height of the Cold War.
How does the agreement work?
Until now, Vanguard Energy has been sending fuel to Cuba in specialized containers known as ISO tanks, which can each transport only 6,900 gallons, a process that the company itself described as "expensive and inefficient."
With the new contract, the company plans to send more than 250,000 barrels of regular gasoline (87 octane) and diesel per trip, with a frequency of once a month or every 40 days, stored at CUPET facilities.
"We are looking to bring in a reasonably sized vessel, containing over 250,000 barrels of diesel and regular 87 gasoline, to deposit them into a tank," stated Matthew Klann, president of Vanguard Energy, to the Miami Herald.
Vanguard maintains control of the fuel
Vanguard Energy will maintain ownership of the fuel stored on the island at all times and will not transfer it to the Cuban government.
"This is not an agreement in which we hand over the fuel to CUPET; it actually establishes a physical presence on the island, where a person subject to U.S. law has the right to inspect the fuel, has title to it, and it is only distributed once it is paid for in the United States," explained Augusto Maxwell, a lawyer at the Akerman firm in Miami, to the mentioned outlet.
"From the perspective of U.S. policy, it is a significant victory," added Maxwell.
Buyers' payments will not go through the Cuban banking system, as stated by Matthew Aho, a policy advisor from the same firm that helped finalize the deal.
Payments outside the Cuban banking system and controls against fuel diversion
Payments made by private entrepreneurs, embassies, and other authorized entities will not be channeled through the Cuban banking system, the company specified.
Additionally, he explained that the agreement includes control and protection mechanisms that could be activated in the event of detecting diversions or theft of fuel by state employees.
"Sales will be limited to clients who successfully complete Vanguard's due diligence program, ensuring transparency, accountability, and compliance with applicable U.S. regulations," the company stated in a release.
"To comply with United States laws, Vanguard will also implement safeguards aimed at ensuring that the fuel is not diverted to the Cuban government or to Cuban state-owned enterprises sanctioned by the United States."
According to Miami Herald, neither the United States Department of State nor the Ministry of Foreign Affairs of Cuba responded immediately to the requests for comments made by that media outlet.
Legal framework that makes the agreement possible
The agreement is made possible thanks to an authorization issued in February by the U.S. Department of Commerce, which opened the door to fuel exports to the Cuban private sector under the "Support for the Cuban People" license exception, without the need for a specific license.
Both the Department of the Treasury and the Department of Commerce have made it clear that sales cannot benefit the Cuban government, the armed forces, sanctioned officials, or hotels managed by the military conglomerate GAESA.
«Sales will be limited to customers who successfully complete Vanguard's due diligence program, ensuring transparency, accountability, and compliance with applicable U.S. regulations», the company stated in a statement cited by the Herald.
The energy crisis that makes the agreement urgent
Cuba is experiencing the most severe energy crisis in decades.
Since January, the supply of Venezuelan oil has been interrupted following the capture of Nicolás Maduro, and Mexico halted its shipments out of fear of U.S. tariffs.
The only relief came on March 31, when the Russian vessel Anatoly Kolodkin delivered 730,000 barrels of crude oil at the port of Matanzas after receiving a temporary sanctions waiver.
The Cuban Minister of Energy, Vicente de la O Levy, admitted that Cuba had "absolutely no fuel, no diesel, only associated gas," while Díaz-Canel acknowledged that the country "lacks fuel absolutely for almost everything."
The electric deficit reached a record of 2,153 MW on May 13, with power outages lasting up to 22 hours a day, and the Cuban Conflict Observatory recorded 1,311 protests that month.
What could this agreement mean?
Klann described the potential of the agreement:
"As the process advances and it becomes evident that it works, that it is auditable, and that both the U.S. and Cuban sides perceive the benefits of privatization in their fuel markets, it is expected that they will go further, allowing more private companies to enter, that gas stations can be sold to the private sector, and that an energy market can flourish again."
The agreement is described by its proponents as "the most significant commercial change in Cuba's fuel sector in decades," and it could pave the way for more American companies to participate in the island's energy sector, a goal that the Trump administration has been actively promoting.
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