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The United States will now allow the resale of some Venezuelan oil to certain Cuban private-sector entities under a new Treasury licensing policy designed to ease the island’s worsening fuel crisis.

Some shit you should know before you dig in: To keep it blunt, Cuba has been pretty screwed after the United States cut off all Venezuelan oil shipments to the island. You may remember that shortly after the US removed Maduro, Trump announced that no more Venezuelan oil would be going to Cuba. That forced Cuba to rely on its second-largest oil supplier, Mexico, to fill the gap. Last month, Mexico began halting oil shipments to Cuba over threats of increased US tariffs. Between Venezuela and Mexico, this accounted for roughly 85% of the island’s energy resources, resulting in significant impacts to their economy.

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What’s going on now: In a notable development, the Treasury Department said it would implement a “favorable licensing policy” allowing companies to seek authorization to resell Venezuelan-origin oil specifically for use in Cuba’s private sector. According to the guidance, transactions must “support the Cuban people, including the Cuban private sector (e.g., exports for commercial and humanitarian use in Cuba),” and any dealings involving the Cuban government would not be covered. The policy would operate on a case-by-case licensing basis, meaning companies must apply for approval, and the oil cannot legally be routed to or benefit any state-run institutions.

The move comes as Cuba faces acute fuel shortages that have crippled electricity generation, transportation, and food production. Power outages have become more severe, resulting in everything from hospitals operating at reduced capacity to trash piling up in the streets and many businesses not being able to operate due to a lack of electricity.

Speaking at a Caribbean summit, US Secretary of State Marco Rubio defended the United States’ position and blamed Cuba for the crisis. “What the Cuban people should know is this: that if they are hungry and they are suffering, it’s not because we’re not prepared to help them. We are. It’s that the people standing in the way of us helping them is the regime, the Communist Party,” Rubio said. He added that Cuba is “a system that’s in collapse” and said the authorities there “are responsible” for what he described as the worst economic climate the country has faced.

Critics, however, argue that the humanitarian crisis has been caused by the United States’ aggressive push to cut off all oil shipments as part of a broader strategy that some say is focused on regime change in Cuba.

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