Oil Supply Cutoff and Power Grid Collapse: How U.S. Sanctions Are Pushing Cuba Toward a "Second Special Period"

On Christmas Eve 2025, in the Vedado district of Havana, the afternoon sun scorched the streets. Outside the bank at the corner of 23rd Street and J Street, more than thirty people—including families with children—waited restlessly in the shade. This was no ordinary queue; they were waiting for the return of the current, known locally in Cuba as "la corriente." Without electricity, the three ATMs were nothing but silent metal boxes. It was December 24, people's wallets were empty, and the banking system, much like the country's power grid, had come to a standstill.

I arrived at 7 in the morning, damn it! A man in his thirties shouted angrily, as the line had already lost its shape. Everyone is entitled to withdraw 5,000 Cuban pesos from their own card, approximately equivalent to 3,700 Mexican pesos. In theory, the ATMs should be replenished with cash before 9 AM, but for several consecutive days, the rules have failed. A thin man in his fifties tried to cut in line, causing a commotion. Threats and curses filled the air, almost escalating into physical conflict. In the background, someone murmured softly: Let this end. Put the damn money in.

A few days later, the new year began with even more intense tremors. On January 3, 2026, U.S. special forces captured President Nicolás Maduro and his wife in Venezuela and transferred them to New York. For Cuba, which had relied on Venezuelan oil for survival for over two decades, this final lifeline was completely severed. U.S. President Donald Trump promptly declared unequivocally on Truth Social: Cuba would no longer receive oil or funds from Venezuela: zero. He urged the government of Miguel Díaz-Canel to reach an agreement before it was too late.

This scene is not an isolated economic setback, but the culmination of a structural crisis that has been brewing for decades. From the special period following the dissolution of the Soviet Union to the Venezuelan oil lifeline during the Chávez era, Cuba's economy has always been built upon external political patronage. Now, with the collapse of the Maduro regime and the extreme pressure of U.S. sanctions, this Caribbean island nation stands on the brink of a precipice more perilous than that of 1991—domestic consensus has disintegrated, societal patience has been exhausted, and the economic engine has completely stalled due to fuel shortages. This is not merely an energy crisis; it is a political and geopolitical struggle concerning the very survival of the nation.

Broken Lifeline: The Politics of Oil from Caracas to Havana

The relationship between Cuba and Venezuela is far from a simple energy trade; it is a highly politicized survival pact. This model can be traced back to the Cold War-era ties between Cuba and the Soviet Union, and was replicated and reinforced in the early 21st century by the Bolivarian Revolution under Chávez and Maduro. Its core logic is: Venezuela provides cheap oil and financial resources, while Cuba exports its most valuable human capital—doctors, teachers, security personnel, and intelligence experts.

This exchange has never been equivalent. According to observations by former Mexican Ambassador to Cuba Ricardo Pasco, the economic value Cuba receives far exceeds the services it provides. At its peak, Venezuela supplied Cuba with over 100,000 barrels of cheap oil per day, which nearly sustained Cuba's entire energy system and part of its fiscal operations. In return, tens of thousands of Cuban professionals were dispatched to Venezuela. They were not only providers of social services but also crucial pillars in consolidating the Maduro regime's political control. This relationship allowed Cuba to postpone painful economic structural reforms, barely maintaining the framework of its planned economy with external resources.

However, this lifeline has become riddled with holes over the past decade. Venezuela itself has plunged into a severe economic and political crisis, with oil production plummeting. Its supply to Cuba has sharply decreased from a peak of 100,000 barrels per day to approximately 30,000 barrels per day by 2025. This is far from sufficient to sustain a country with a daily oil demand of about 125,000 barrels. The gap must be filled by other sources, leading Cuba to turn to Mexico and Russia for more expensive and less stable oil imports. According to 2024 data, Mexico's state-owned oil company Pemex exported $500 million worth of oil to Cuba between January and September of that year, a 25% increase year-on-year, with an average daily supply of about 13,000 barrels, surpassing Russia to become Cuba's largest crude oil supplier.

The arrest of Maduro marks the complete severance of this already fragile lifeline. U.S. Secretary of State Marco Rubio—a Cuban-American politician renowned for his hardline anti-Cuba stance—made it clear that after taking control of Venezuela's oil industry, the United States would halt all supplies to Cuba. This is not merely an escalation of economic sanctions but a geopolitical decapitation operation aimed at cutting off the external resources on which hostile regimes depend for survival. For Cuba, losing Venezuelan oil means losing the last external buffer that sustains the basic functioning of the state. Pasco described this moment as Cuba's second special period, but this time, the social context is entirely different from that of 1991.

Islands in the Dark: How the Energy Crisis Chokes the Economy

The most direct and fatal consequence of oil shortage is the collapse of the power system. For a country where 96% of electricity generation relies on thermal power (with oil-fired power accounting for 62.3%) and equipment is severely aged, fuel supply is the heartbeat of the grid. Now, this heart is failing.

Cuba's power infrastructure is largely a legacy of the Soviet era, with the main grid having been put into operation in 1988. For decades, due to funding shortages and technology embargoes resulting from the U.S. blockade, these facilities have lacked necessary maintenance and upgrades. In October 2024, a failure at the largest Antonio Guiteras thermal power plant caused a nationwide grid collapse, plunging over 10 million people into darkness. In the capital Havana, the surreal scene of residents playing with frisbees in the dimly lit streets emerged. This was not an isolated incident but a concentrated manifestation of systemic fragility.

Power shortages have become a brutal constant in Cuba's daily life. In Havana, ordinary families like Ramón Ramos endure at least six hours of blackouts every day. His wife has to rely on her phone's flashlight to brew coffee. Cooking has become particularly difficult, Ramos says, as anything requiring electricity is impossible. This is more than just an inconvenience. Blackouts cause food in refrigerators to spoil, medical equipment to fail, and factory production lines to halt. On a broader level, they undermine the very foundation of economic activity.

According to the report from the Cuban National Electric Union on February 28, 2025, the daily power generation was only 1,695 megawatts, while the maximum demand reached as high as 3,250 megawatts, resulting in a shortfall of 1,555 megawatts—meaning nearly half of the country's electricity demand could not be met. The assessment from independent energy consultants is even more severe: to fully activate Cuba's energy system, an investment of at least $100 million is required, which is an astronomical figure for Cuba, whose foreign exchange reserves are depleted.

The energy crisis has triggered a series of chain reactions, dragging the economy into a vicious cycle.

Industrial Paralysis: Traditional foreign exchange-earning industries such as sugar and tobacco have seen a sharp decline in efficiency due to frequent power outages, leading to a loss of international competitiveness.
Decline of the Service Industry: Obispo Street in Old Havana, once bustling with tourists, now appears half-empty. High-end restaurants are deserted during the peak Christmas season, with waiters and singers visibly disheartened. Tourism, a crucial source of foreign exchange, is drying up.
Collapse of Basic Services: Due to a lack of fuel, garbage trucks, ambulances, and fire trucks are unable to operate, pushing urban sanitation and public safety systems to the brink of collapse. The piled-up garbage and dilapidated colonial architecture on the streets of Havana have become a visual symbol of the nation's decline.
Surge in Social Costs: Prolonged material shortages, low wages, and lack of opportunities have exhausted the public's patience. A widespread sense of fatigue and anger is spreading. The word "revolution" has lost its meaning for many young people, replaced by a desire to leave. Between 2020 and 2024, over 1.43 million Cubans left the country, which has a total population of approximately 11 million. This is the clearest signal of the disintegration of social consensus.

Internal Rifts: The Erosion of Consensus and the Fog of Power Structures

Compared to the special period of 1991, a fundamental difference in the current crisis lies in the state of social psychology. Back then, despite extreme hardships in life, a collective spirit of resistance based on revolutionary ideals and anti-American nationalism still existed. Fidel Castro's narrative of resistance could still unite some people. Today, such consensus has completely vanished.

The death of Fidel Castro in 2016 marked the end of a symbolic era. Many elderly Cubans, including veterans of the revolution, lament that after his passing, everything began to decline. The historical capital of the revolution has been exhausted. The Havana depicted by writer Leonardo Padura in his works is a city marked by garbage, interpersonal violence, and the degradation of social structures. This is not propaganda, but literature's confirmation of the real atmosphere—a pervasive sense of frustration and alienation visible on the streets.

What is more noteworthy is the subtle shift in official rhetoric. President Díaz-Canel recently made a rare public criticism of the inefficiency of the Cuban Communist Party, accusing endless meetings of solving nothing. Analysis indicates that this represents a significant shift in the focus of the official narrative—for the first time, the emphasis is not on American imperialism, but on internal accountability. This suggests that a segment within the ruling class has come to realize that the old ideological rhetoric has completely lost its effectiveness in the face of widespread hardship.

So, who truly rules Cuba? It is widely believed among the people that Díaz-Canel is not the real power holder. A prevalent view is that actual power lies with the military and intelligence agencies, rather than the 94-year-old Raúl Castro. The president appears more like an appointed bureaucrat, lacking independent leadership authority. However, former Ambassador Pascoe raised a crucial detail: Alejandro Castro Espín, the son of Raúl Castro, is currently a central figure in the intelligence and security agencies and served as the direct intermediary in Cuba’s negotiations with the Obama administration. This historical clue suggests that the military system—typically more pragmatic than civilian ideological bureaucrats—may also be the faction most willing to engage in some form of dialogue with the United States at present.

History offers a thought-provoking footnote. Pasco recalls that Fidel Castro once told him he attempted to reach an agreement with Bill Clinton but failed due to internal resistance. Several years later, Raúl successfully achieved a historic détente with Obama, but Fidel overturned it at the Communist Party Congress. Pasco believes that what drove Fidel was a simple yet destructive fraternal rivalry—jealousy. The consequence was leaving Cuba adrift in a political vacuum, which was soon followed by the hardline era of Trump.

Now, the pragmatists may face even more severe challenges. The Trump administration and its Secretary of State, Rubio, are far less flexible than the Obama era. However, Pasco points out that the dialogue faction within the military understands that without some kind of agreement with Washington, the collapse will be even more devastating. The question is, which side does time favor?

Future Dilemmas: A Struggle for Survival or Structural Transformation?

Facing energy supply cuts and economic suffocation, Cuba's short-term options are extremely limited. It is attempting to alleviate the crisis through various means, but each path is fraught with thorns.

Firstly, seek alternative energy supplies. Mexico is currently the most critical alternative source. Mexican President Claudia Sheinbaum has expressed continued support for energy assistance to Cuba and opposition to the U.S. blockade. However, the scale and sustainability of such assistance are constrained by U.S.-Mexico relations and international oil prices. Furthermore, Cuba may partially offset costs through barter trade, such as by sending medical teams, but this cannot fundamentally resolve the foreign exchange shortage issue.

Secondly, implement a temporary power generation solution. Cuba leased floating power generation vessels from Turkey. As of December 2024, with the addition of the latest vessel, the Cankuthan Bey (with a generation capacity of 80 MW), Cuba has a total of 8 such vessels. However, they rely on imported fuel, which is costly (referencing the Ecuador case, a 100 MW floating power plant cost over $114 million in 18 months), and they cannot compensate for the daily shortfall exceeding 1,500 MW.

Third, promote energy transition. Cuba plans to vigorously develop photovoltaic and wind energy, aiming to build 92 photovoltaic power stations by 2028, with a total installed capacity exceeding 2000 megawatts. Currently, 72 photovoltaic parks have been completed, with a total capacity of 226 megawatts. Although this is a long-term direction, projects have been repeatedly delayed due to funding shortages, and the intermittency of renewable energy cannot fully replace stable baseload power.

From a geopolitical perspective, Cuba's future depends on two core variables:

Trends in U.S. Policy: Trump's second term has clearly adopted a more confrontational Latin America policy, heavily influenced by the Monroe Doctrine. After addressing Venezuela, Cuba has become the next target on its ideological agenda. With Rubio serving as Secretary of State, it indicates that U.S. policy toward Cuba will maintain high pressure or even seek regime change. Whether the U.S. will intervene militarily remains uncertain, but the strategy of economic suffocation to induce internal collapse is already an open approach.
Internal Divisions and Choices within the Cuban Ruling Group: Should they continue to hold out firmly, anticipating changes in the international situation (such as a policy shift after the U.S. election)? Or should they initiate internal reforms, even seeking painful but necessary negotiations with the United States? The balance between the pragmatic faction in the military and the ideological conservatives within the party will determine the nation's course.

Cuba is not without potential resources. Its nickel reserves rank sixth globally, making it a significant export mineral. However, under conditions of power shortages and dilapidated infrastructure, these resources cannot be effectively monetized. This situation is similar to Venezuela's dilemma of sitting on a gold mine while facing hunger.

Ultimately, Cuba's predicament reveals a harsh reality: a small island nation's economy, highly reliant on a single external protector state and in persistent confrontation with the globally dominant power, possesses an inherent fragility in its development model. From the Soviet Union to Venezuela, external lifelines can delay crises but cannot substitute for endogenous growth and structural reforms.

Angry lines outside Banco de Havana, apartments in darkness, empty seaside promenades, and the whispered words "This is Cuba, kid"—these are not just scenes of economic hardship but also a microcosm of a failed social contract and a bankrupt national narrative in an era. The Second Special Period has arrived, but this time, the Cuban people no longer hold an ideological torch to raise together, while the ruling elite faces a society whose patience has run out and which knows all too well that suffering is not evenly distributed.

The future of this country, perhaps like its unstable power grid, flickers violently between light and darkness, and the next prolonged blackout may not be merely in the sense of electricity.