August 08, 2024 [Oilprice]- Russia and Cuba have discussed the idea of building an oil refinery in Cuba with the help of Russian companies, the deputy speaker of the Russian parliament was quoted as saying.

During a visit of Russian lawmakers to Cuba in recent days, the idea of a refinery construction has been discussed, Russia’s TASS news agency quoted deputy speaker Alexander Babakov as saying.

“The biggest Russian state companies could be working here,” the lawmaker said.

“Cuba has crude oil: it is logical not to import oil products but to produce them here,” TASS quoted Babakov as saying.

Russia and Cuba have held close ties since the 1950s when the Latin American country and the Soviet Union expanded ties as fellow communist states.

Cuba’s key crude oil supplier is nearby Venezuela. However, shipments have dropped in recent years, also due to Venezuela’s crumbling oil industry and the U.S. sanctions against Cuba’s staunch ally, Venezuela’s Nicolas Maduro.

The crumbling Venezuelan oil industry means that less fuel oil from the country sitting on the world’s largest oil reserves is reaching Cuban shores to power the old power plants on the island.

Cuba’s power generation is heavily dependent on oil products—according to the International Energy Agency (IEA), Cuba’s energy supply mainly comes from oil products, which account for more than 80 percent of power generation.

Mass protests erupted in Cuba in 2021, due to the crisis in Venezuela and its oil industry.

Early this year, Cuba, which has seen chronic shortages of gasoline and other fuels, said fuel prices would jump by 500% from February 1, 2024. The Cuban government can no longer manage a massive subsidy campaign that puts subsidized prices on nearly all essential goods and services.

Cuba has also imported some Russian crude since 2022. Then there was a year-long hiatus, before some Russian oil arrived in Cuba in March this year.