Venezuela once supplied Cuba with as many as 100,000 barrels of oil daily. Trump's January 3 decision to seize Venezuelan President Nicolas Maduro ended that flow, and the resulting energy gap is the structural constraint Secretary of State Marco Rubio's sanctions campaign is built around. U.S. fuel exports to Cuba reached $96 million in the first six months of the year, according to the U.S.-Cuba Trade and Economic Council, with more than half arriving in June as U.S. distributors move into the space Cuba's state-run oil company once occupied.
The administrative architecture
Since last year, the Trump administration has taken two dozen separate actions against Cuba. The campaign has sanctioned 40 entities, from foreign companies operating on the island to Cuba's state-run fuel, banking, and mining conglomerates. It has targeted at least 38 people with economic sanctions, visa limitations, and residency revocations, and it has pressured other governments to exit Cuba's doctor-export program, which the State Department calls human trafficking. John Kavulich, president of the U.S.-Cuba Trade and Economic Council, which has tracked this trade since 1994, told Axios the Trump administration has run the most effective sanctions program against a target country of any predecessor.
What the financial workarounds look like
The banking rail is severed. U.S. restrictions on financial transactions with Havana have driven some Cuban businesses to send people to Miami laden with gold chains as a physical stand-in for wire transfers, according to a businessman in the fuel trade who spoke to Axios. Foreign companies are pulling back to avoid secondary sanctions exposure. U.S. enterprises are filling that void, creating a nascent capitalist black market.
The reform announcement and what Rubio calls it
Cuba's prime minister announced Tuesday that the government is permitting more private-sector activity than at any point since the 1959 Revolution, the Miami Herald reported. Rubio told Axios he reads this as a stalling tactic: Cuba is manufacturing the appearance of reform while searching for new sanctions-evasion routes. "Every time they create a new mechanism in which they try to get out of the noose, we just close it off," he said. The State Department's July 20 report, "Cuba: The Capital of 21st Century Communism," which officials say lays the groundwork for more pressure, drew criticism from University of Miami Cuba historian Michael Bustamante, who called it "a political document" that is "short of a ton of context." Additional sanctions were imposed Thursday. Rubio said the campaign runs through at least the next two and a half years.