Cuban oil dependency: Venezuela's importance

Authors:
Luis Alberto López Rafaschieri and José Alberto López Rafaschieri
www.morochos.net

In another article we show that Venezuela is not a vital oil supplier to the U.S. economy. But if we want to know about a country truly in need of Venezuela's energy resources, we must direct our gaze toward Cuba.

To function, the weak Cuban economy must import about 120 000 barrels of crude daily, according to IEA. But fortunately for the Cuban government, since Chavez is in power, Venezuela sends to the communist island -under very favorable conditions for Cuba- an approximate of 100 000 barrels of oil per day. What represents 83% of the Castro regime's imported oil requirements.

Cuba is supposed to pay for this oil through a confusing barter that goes something like this: Venezuela exports the oil, in return Cuba sends physicians, then, Venezuela must pay to Cuba a salary in dollars for each Cuban doctor. And what Cuba calls for each physician is so high that in the end Venezuela owes money, without Cuba having to spend a single dollar.

Thus, given the high percentage of Cuban oil demand supplied by Venezuela, and the unusual conditions under which Cuba acquires Venezuelan oil, it makes more sense to talk about energy dependence in the Venezuela-Cuba relationship than in the case of Venezuela-USA.

Related articles:

- Venezuelan oil myth: The vital supplier

- The post-financial crisis: Oil with less risk?

- Defects of Chavez's electricity policy