Cuba is tightening controls over fuel supply to cope with a shortage aggravated by US sanctions targeting its Venezuelan supplier.
The sanctions have expanded Cuba's oil deficit to "about 35,000 b/d," Argus was told. Government officials in Cuba had estimated the deficit at 25,000 b/d in January 2019.
Government officials now say throughput at the 65,000 b/d Cienfuegos refinery fell "slightly" in January-April compared with 2018. The refinery processed 37,000 b/d of crude in 2018, state-owned oil company Cupet said in January.
The US imposed oil sanctions on Venezuela's state-owned oil company PdV in late January, and tightened them in recent weeks to encompass shipping companies and tankers that transport Venezuelan oil to the island.
Washington blames Havana for helping to prop up the Venezuelan government of President Nicolas Maduro, whom most western countries no longer recognize as the Opec country's legitimate head of state.
The Cuban officials declined to name the current sources of oil imports, but it appears that the sanctions have not fully severed Venezuelan supply to the island. Prior to the sanctions, Cuba was receiving less than 50,000 b/d of Venezuelan crude and products in exchange for Cuban advisers, a two-decade-old arrangement that Venezuela's opposition has denounced as a giveaway.
The island had been receiving around 100,000 b/d from Venezuela until around 2015, when the shipments started declining in line with PdV's falling production, and Venezuela's oil-backed loan commitments, mainly to Russia and China.
Imports of Venezuelan crude and products averaged 42,000 b/d in 2018, Cuban government officials said in January. The supply to Cuba is a fraction of Venezuela's oil exports, which now mainly go to China and India, but they attract outsize attention from Maduro's opponents.
The Venezuelan supply to Cuba supplements domestic production to meet the island's demand of around 160,000 b/d.
The widening fuel shortage has led the Cuban government to crack down on fuel theft and a growing black market, particularly for gasoline, according to government statements.
Inside Venezuela, fuel is even scarcer, because PdV's refineries are mostly out of service and the government cannot afford imports, or find suppliers willing to overcome pressure from Washington to shun Caracas.
The US administration sought to increase pressure on Cuba yesterday by banning US-owned cruise ships from calling in the island, and ending educational travel to Cuba by US citizens.
Cuba has been seeking alternative oil supplies from Algeria, Russia, Iran, Angola and Trinidad and Tobago, according to several government statements since 2017, but the shipments require payments in cash that Cuba does not have.
The oil deficit has prompted Havana to revive an offshore exploration campaign. The government hosted a roadshow in London yesterday to promote offshore blocks that the government says contain around 6bn barrels of oil equivalent (boe).
On the northern coast, Chinese state-owned CNPC's subsidiary Great Wall Drilling is currently exploring nearshore acreage, and Canadian firm Sherritt International is drilling block 10 in the Bay of Cardenas.
Onshore, Australian independent Melbana failed to complete a proposed farm-in agreement with Chinese firm Amec. And talks with Russian state-controlled Rosneft for offshore acreage have gone nowhere so far.
The island's deepwater exploration program in the Gulf of Mexico ran aground in 2012 after foreign companies, including Spain's Repsol, India's ONGC, Norway's Equinor, Malaysia's Petronas, Russia's Gazpromneft and PdV, found no commercially exploitable deposits.
Cupet's chief of exploration and production Group Jesus Marrero said in December 2018 the campaign would be revived in April 2019.
"There are many details to be concluded before this aspect of the oil business can be started," Cuban officials now say.
