Cuba is cementing terms for crude supply from Algeria to replace sharply lower deliveries from close political ally Venezuela.
Two cargoes of Algerian Saharan Blend are currently on their way to the Cuban port of Matanzas, shipping and vessel tracker data indicates. The New Hellas loaded 84,000t (664,188 bl) on 1 October at Bejaia, and is estimated to arrive this week. The Neverland loaded another 84,000t on 13 October and is estimated to arrive on 31 October.
Crude supply topped the agenda of a 13 October visit to the island by Algeria's prime minister Abdelmalek Sellal, and the two sides are now finalizing supply agreements, an official of Cuba's state-run oil company Cupet tells Argus.
"The discussions took place at the highest level, and officials from both countries are determining the volumes and schedules for Algerian oil to be sent to Cuba," the official said, adding that the Cuban foreign and foreign trade ministries are hammering out the details.
Venezuela´s state-run PdV had been supplying around 80,000 b/d of crude and products to Cuba under preferential terms as late as 2015, but supply has been halved to roughly 40,000 b/d. PdV´s domestic production has fallen by around 300,000 b/d over the past year, and the company is in the throes of a deep financial crisis.
The cutback in Venezuelan supply has contributed to fuel shortages and power outages on the island. The government announced in July an indefinite 50pc reduction in power and fuel use by state agencies.
Havana is under pressure to plug the energy gaps as tourism picks up in response to the government´s rapprochement with Washington.
Cuba's president Raul Castro told parliament in July 2016 the island's economy is under "stress" because of diminishing Venezuelan oil supplies "despite the firm will of President Nicolas Maduro and his government to fulfill these supplies."
The imported crude is processed at Cuba´s 65,000 b/d Cienfuegos refinery that Cupet jointly operates with PdV.
The imports supplements around 50,000 b/d of liquids, in addition to 20,000 b/d equivalent of gas, that Cuba produces from onshore and shallow water reservoirs.
Cuba is also looking to Russia and Iran to replace the crude and products amid the uncertainty over Venezuelan supplies, Cuban officials told Argus last month.
