My first post for FiveThirtyEight.com is up on their site now. Behold:
It’s easy to lose sight of just how central Venezuela’s oil largesse has been to the Cuban state’s financial strategy. Following a landmark 2003 “Cooperation Agreement,” Venezuela has been sending 115,000 barrels a day to the island. The Cubans re-export some of the crude that Venezuela sends them to other countries, pocketing some $765 million in 2014. That’s a vital source of fresh dollars for an island that doesn’t have a lot of other good options for earning hard currency.
But surely that’s a fraction of the value of the Venezuelan oil deal to Cuba: The much bigger piece is getting the island’s whole energy import bill more or less paid for. Without Venezuelan shipments, Cuba would have to scrounge up billions in foreign currency it doesn’t possess to pay for the oil it needs to keep buses and trucks on the road and power stations running (at least some of the time). When you figure in those savings, you see that Venezuela’s oil was worth more than $3.6 billion to the Cuban treasury in 2014.