Cuba's oil crisis spells trouble for Castro; Opportunity for foreign petroleum investment
This paper reports on Cuba's oil crisis which presents long term woes for the government of Fidel Castro but new opportunities for foreign petroleum investment. That's the main thesis of a study by East-West Center (EWC), Honolulu. Since the cutoff of subsidized oil supplies from the former Soviet Union at the first of the year, Cuba has endured a crippling loss of export revenues and draconian energy rationing measures at home. The Soviets had reduced oil supplies to Cuba since 1989 after decades of providing the Castro government with subsidized oil supplies. Former Soviet President Mikhail Gorbachev exempted Cuba from paying market prices for Soviet oil in 1991 while requiring that of Soviet trading partners in eastern Europe. With the collapse of Communism in the former U.S.S.R., however, oil supplies from that region are available to Cuba only at market prices and for hard currency. That has triggered a crisis in the Western Hemisphere's sole Communist regime as Cuba's gross special product - equivalent to GNP - fell by 5% in 1990 and a further 20% in 1991. The foreign exchange loss of $1.6 billion stemming from the loss of Soviet subsidized oil supplies exceeds that of total foreign exchange earnings from all other sources. If Cuba imports oil in 1989 volumes at current prices, its oil import tab alone will be $1.3 billion, EWC projects.
- OSTI ID:
- 7310478
- Journal Information:
- Oil and Gas Journal; (United States), Journal Name: Oil and Gas Journal; (United States) Vol. 90:27; ISSN OIGJA; ISSN 0030-1388
- Country of Publication:
- United States
- Language:
- English
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