Summary:
The article details how new U.S. sanctions, specifically an effective oil blockade, are severely impacting Cuba's economy and daily life. This has caused critical fuel shortages, leading to suspended flights, paralyzed transportation, spiking black-market fuel prices, and widespread business disruptions. The economic strain is forcing many Cubans, illustrated by the story of two sisters who lost their Airbnb business, to reconsider their livelihoods as the government implements austerity measures.
Main Topics Covered:
1. The impact of U.S. sanctions and an oil blockade on Cuba's fuel supply and economy.
2. The cascading effects on tourism, transportation, and private businesses.
3. The Cuban government's contingency measures and the resulting societal hardship.
Cuba’s economy on edge: Fuel shortages and rising hardship
Havana’s streets have changed as a US fuel blockade restricts the movements of vehicles and people and hits businesses.
Havana, Cuba – Eight days before United States President Donald Trump signed an executive order threatening tariffs on countries supplying oil to Cuba, 26-year-old twins Sandra and Sabrina Gonzalez received a devastating email.
“Due to U.S. regulatory requirements, Airbnb must deactivate certain listings. Unfortunately, this applies to your listing(s) in Cuba … All upcoming reservations will be canceled today,” reads the email dated January 21.
“By that point, all our booking dates had been blocked, and all our reservations from January to April had been automatically cancelled,” said Sandra, a resident of Havana.
Sandra’s family has been running two bed-and-breakfasts through Airbnb since 2016, when Cuba’s tourism industry boomed following the historic normalisation of relations under the administration of former US President Barack Obama. Their business survived Trump’s tourism sanctions during his first term and the disruptions caused by the COVID-19 pandemic.
After further research, the sisters discovered that only Cuban hosts with US bank accounts linked to their listings had been affected.
In a bid to salvage the situation, they tried to reach their guests directly — in violation of Airbnb’s rules — but without success.
On February 8, Cuban authorities announced that the island’s jet fuel supplies had run dry. Canadian carriers Air Canada, Air Transat and WestJet, as well as Russia’s Rossiya and Nordwind, suspended flights to the island and arranged the repatriation of citizens already in the country.
Canada and Russia are Cuba’s first and third sources of tourism, respectively.
Hostels, bed-and-breakfasts and state-run hotels faced a surge in cancellations as travellers either could not reach Cuba or reconsidered their plans amid Trump’s de facto oil blockade.
For Sandra and Sabrina, the setbacks didn’t end there. Their work as video producers was also disrupted, with shoots cancelled for the same reason. Now, both are weighing a move into a different line of work.
“Suddenly finding yourself in a situation where you have to look for a job you’re not used to, with a salary that’s not even half of what you made … it’s tough,” said Sandra.
Living in these conditions benefits no one
Havana’s streets have changed in the last few weeks. The 1950s US cars — the city’s iconic taxis — have mostly disappeared, leaving only Chinese electric tricycles struggling to meet demand.
On February 7, the Cuban government suspended fuel sales in local pesos and limited US dollar sales to 20 liters (5.3 gallons) per vehicle, creating a long waiting list on a Cuban online booking platform.
The restrictions are part of a nationwide contingency plan in response to the oil blockade. The plan includes decentralising fuel imports and authorising any company – including private ones – to buy fuel abroad.
Meanwhile, private taxi fares, which have become the main means of transportation due to the near-paralysis of public transport, have risen, and fuel on the black market has spiked. Petrol is already selling for the equivalent of $8 per liter (about $30 per gallon), a 400 percent increase from the week leading to the abduction of Venezuelan President Nicolas Maduro on January 3 by the US forces. Venezuela supplied 30 percent of the oil that Cuba consumed thanks to a historical arrangement under which, in exchange for subsidised oil, the island sent thousands of Cuban doctors, nurses, teachers, and other professionals to work in Venezuela.
Cuba’s latest measures go beyond fuel. Many state-sector employees have been moved to remote work, other workers have been reassigned, and the work week has been cut to four days. Non-essential surgeries have been suspended, and college students have been sent home.
Cuban economist Daniel Torralbas says sectors that rely directly on fuel, such as transportation and industry, will be hit hardest. But all businesses – private and state-run alike – are feeling the impact.
This week the island experienced a 16-hour blackout and as of Thursday, less than half the country had its power back.
“This year will probably be one of the toughest for the Cuban economy since the revolution,” he said.
Torralbas sees only one apparent winner within Cuba in the current crisis: “Businesses that offer solutions to the problems caused by the crisis, such as those selling solar panels.”
It is also benefitting people like 28-year-old Alejandro Candelaria. He has spent the past six months working as a courier and taxi driver on the electric motorcycle his brother left him before emigrating to Spain. With fuel now scarce, competition has thinned, and his income has increased.
But Candelaria doesn’t feel triumphant.
“There is no electricity, no water, no gas. It takes a toll on you psychologically. Sure, I benefit from the fuel shortage, but living under these conditions doesn’t benefit anyone,” he said.
Now you can go out, but you can’t move
On the night of February 5, shortly after Cuban President Miguel Diaz-Canel warned on television of “difficult times”, 20-year-old Rafael Mena received a WhatsApp message ordering him to leave his university as soon as possible.
“The news sparked a certain catharsis among the students,” said Mena, a journalism student, who is from Mayabeque, a province east of the capital, and had been living at the University of Havana as the Cuban system allows universities to house students from distant or rural areas.
“The university residence had been in precarious conditions for many days: an electrical transformer had broken, there was no water, and added to the daily difficulties one endures, it was enough to make anyone explode,” Mena said.
The following day, students began returning home, and within a week, many higher education institutions had already closed their doors.
The government’s contingency plan also introduced a “hybrid” class format for high school and university education.
Students are expected to study remotely and download materials from institutions in their own communities, according to the official information received by Mena, who suspects that in this case, “hybrid” may be little more than a euphemism.
“This whole situation feels just like during COVID. Back then, we were locked up at home because going out could make us sick. Now we can go out, but you can’t really move around because it’s too expensive,” Mena told Al Jazeera.
This week, the US Department of the Treasury said it will allow the resale of some Venezuelan oil to Cuba for “commercial and humanitarian use”. But it’s not clear if businesses will be able to pay those market rates.
Torralbas is not optimistic about the Cuban economy. The island’s GDP has contracted by 15 percent over the past five years, while indicators for life expectancy, infant mortality, education, and public health have all deteriorated. He expects the government will be forced to implement further measures to survive the effects of the US oil blockade.
“Given the seriousness of the situation, there is no way to recover without structural change. We need fuel, food, and foreign currency… and no external saviour will come to supply everything Cuba needs—not China, nor Russia, nor, of course, Venezuela, which has changed a lot since January 3.”
Meridiano
