The Donald Trump administration in the United States has cut off oil supplies to Cuba, delivering a direct blow to Cuba's tourism industry. Because tourism is a core pillar of Cuba's economy, the already fragile economy is expected to take an even bigger hit.
On the 9th, according to the New York Times (NYT), Canadian airline Air Canada said it would suspend all flights starting that day that had been operating 16 times a week to and from four Cuban cities. Air Canada said it would send empty planes from Montreal and Toronto to Cuba to bring home about 3,000 Canadian tourists currently staying there. Canadians are the largest group of foreign tourists visiting Cuba.
Russian airlines, Cuba's allies, are also reducing flights. Russian news agency Interfax said Rossiya Airlines' flight on the 9th was canceled and that an empty plane headed to Cuba to pick up Russian tourists. According to the Russian Association of Tour Operators, about 4,200 to 4,700 Russian tourists are currently on package tours to Cuba.
The reason overseas airlines are cutting back service one after another is a shortage of jet fuel in Cuba. Cuba had long relied on Venezuela for most of its fuel needs, but after the United States on the 3rd of last month increased pressure on the Nicolás Maduro regime and sanctioned Venezuela's oil industry, oil supplies bound for Cuba have effectively been cut off.
On top of that, supplies of Mexican crude that had been replacing Venezuelan crude have also been disrupted. After the Trump administration on the 29th of last month signed an executive order allowing tariffs to be imposed on goods imported from countries that conduct oil transactions with Cuba, the Mexican government also halted crude shipments to Cuba.
According to data analytics firm Kpler, Cuba's oil imports last month were "0" for the first time since 2015. With even household fuel running out, the Cuban government notified airlines operating to and from the country that aircraft refueling would be impossible starting at midnight on the 10th. As a result, long-haul flights to Cuba are expected to make intermediate stops for refueling in nearby countries such as the Dominican Republic.
Fabio Nina, vice president of Dominican Republic carrier Air Century, said Cuba's aviation authorities can secure the fuel needed for a 50-seat jet this week, but could not be sure about next week. He worried that "if the problems with Washington are not resolved, the fuel will eventually run out completely."
Hotels in Cuba are also struggling to operate. Spanish hotel chain Meliá Hotels International said that to improve fuel efficiency, it had suspended operations at three of its 35 hotels in Cuba and moved guests staying at those properties to other hotels. Canadian outlet CTV News also reported that the Cuban government has begun relocating guests from hotels with low occupancy to other hotels to save energy.
Cuba's tourism industry has long been considered a key source of foreign currency income. Many tourism-related enterprises in Cuba are under the control of GAESA, a large conglomerate linked to the military, and GAESA is said to account for about half of the Cuban economy. GAESA was added to the U.S. sanctions list in June last year, restricting direct financial transactions with U.S. companies.
With U.S. sanctions compounded by an oil shortage, Cuba's tourism industry is expected to suffer significant damage. The number of tourists visiting Cuba last year already fell 18% from the previous year due to measures such as the U.S. ban on travel to Cuba. The Financial Times (FT) said, "Cuba does not produce enough crude to meet domestic demand," adding, "the suspension of aircraft refueling will put even more pressure on Cuba's tourism industry."