US to allow licences for resale of Venezuelan oil to Cuba

The US Treasury Department said on Wednesday it would authorise companies seeking licences to resell Venezuelan oil to Cuba, according to guidance posted on the department's website, a move that could help ease the island's acute fuel scarcity.

Since Washington took control of Venezuela's oil exports in early January in the aftermath of its capture of President Nicolas Maduro, the South American country's supply to Cuba ceased, worsening its energy crisis.

Venezuela had been for more than 25 years the main supplier of crude and fuel to its political ally Cuba through a bilateral pact.

Mexico, which had emerged as an alternate supplier, also has halted shipments to Cuba since a fuel cargo arrived in Havana in January, according to shipping data.

The new favourable licence policy comes as large trading houses including Vitol and Trafigura handle the lion's share of Venezuela's oil exports, with millions of barrels exported to the US, Europe and India, and millions more barrels stored at Caribbean terminals for resale.

US President Donald Trump has warned that Venezuela's allies that were taking its oil as part of swaps, debt repayments and other agreements must now pay fair market prices for cargoes.