Apparently short of oil, now that oil supplier Venezuela is distracted by a political crisis, Cuba has turned to Russia for additional supplies, the Russian media reported this week.
However, Moscow has raised an important issue — payment.
“Cuba definitely wants us to supply more [oil], but the question is the financial sources” Energy Minister Aleksandr Valentinovich Novak told reporters in Moscow on Monday (May 29).
“Once financial resources are found, [Russian oil] companies will deliver,” he said. And then he added: “This is not charity.”
In early May, the Russian oil giant Rosneft and the Cuban state-owned company Cubametales signed a contract for the supply of about 250,000 tons of oil and diesel fuel to Cuba. The terms of the contract were not specified.
Rosneft’s chief executive officer is Igor Sechin, a close advisor to President Vladimir Putin, who visited Havana in 2013 and met with President Raúl Castro.
In recent years, oil supplies to Cuba have been unsystematic, reported Neftegaz, a Russian industry publication. According to the Russian Customs Service, from 2010 to 2015, Russia delivered to Cuba 17,000 tons of oil and oil products valued at $11.3 million.
In the summer of 2016, the Cuban authorities began to look for ways to reduce fuel consumption. Shortages of premium gasoline were reported in April and acknowledged by the state media.
“This was an unpleasant surprise for the country’s economy, which was at the peak of expectations from economic reforms in the country and the establishment of relations with the United States,” an article in Neftegaz said.
[Cuba-U.S. relations are expected to be reduced by the Trump administration, sources say. See article below.]
Cuba is working hard to attract investors to the island. Havana intends to feature its investment opportunities at the St. Petersburg International Economic Forum, June 1-3. According to Aleksandr Bogatyr, Russia’s trade representative in Havana, Cuba will stress opportunities in energy, tourism, agriculture, transport, and light industry.
But that will be a hard sale in Russia, Bogatyr told the magazine Ekonomika Sivodnya (The Economy Today). Russians like a quick turnover, he seemed to say.
“Russian investors are more interested in a quick return of their investments, while the Cuban case involves investments with a considerably long period of return of the invested funds,” he said. “To what extent we are ready to increase cooperation in those areas is difficult to say.”
Photo at top: Energy Minister Aleksandr Novak, at left, and Igor Sechin, Rosneft CEO.