EP27: Cuba power outages, whose fault is it?
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Summary: In this episode we examine the reasons behind Cuba's recent widespread power outages, specifically focusing on the country's dependence on unreliable oil suppliers. We highlight Cuba's reliance on Venezuelan oil, which has significantly decreased due to international sanctions and internal problems, leading to a shift towards Russian oil. Additionally, we criticize Cuba's choice to rely on Pemex, Mexico's dysfunctional state-owned oil company, as a supplier. We emphasize Cuba's lack of diversification in its energy mix, heavily reliant on crude oil, and the lack of investment in modernizing its power infrastructure. This combination of factors is presented as a major contributor to the ongoing power outages in Cuba. Questions to consider as you read/listen: What factors contribute to Cuba's recurring power outages, and what are the underlying causes of these factors? How has Cuba's dependence on crude oil impacted its energy security and economic stability, and what are the consequences of their reliance on unreliable suppliers? What are the potential long-term implications of Cuba's failure to diversify its energy mix, and what are the challenges and opportunities associated with transitioning to alternative energy

Long format: Cuba power outages, whose fault is it? The island of Cuba has undergone a series of unplanned and involuntary blackouts island wide. Cuba blames the US for its sanctions policy and the lack of access to modernizing technology as the reason for their plight. While that may be a contributing factor to a degree is it the sole or even most impactful reason? Cuba has a lot of power infrastructure problems. I don’t know enough about that. But I do know how to read export charts. And know mistakes when I see them. Historically, Cuba got most of its crude from Venezuela. Venezuela's oil exports to Cuba so in 2023 dropped to 55,000 barrels per day (bpd) from almost 80,000 in 2020 (Pandemic lows). So far this year as of June the delivery is only at 27,000 barrels per day (bpd), compared with 51,500 bpd in the same period of 2023. This year PDVSA (Venezuela) failed to deliver on almost all of its commitments due to its ships being under international sanctions, US sanctions and holes (yes holes) in boats which ya know isn’t good. So they chose a horrible supplier to rely upon. So it seems they doubled down on imprudence by turning to…. you guessed it….Russia! Wow. And further compounding that it seems according to those in the industry is that there was a lack of foresight that crude API and characteristics matter in refining. Venezuela is very heavy. Very. Russia is considered a medium-sour crude oil that's a blend of heavy oil from the Urals and Volga regions and lighter oil from Western Siberia. Again, beating the drum. Crude is not crude for refining purposes. Your set up for your input matters. You have to set it up right for the refinery to produce efficiently. And when all doubt appeared about the ability and stability of Russian crude, Cuba went to arguably the most dysfunctional and self harming international oil company, Pemex A series of bad decisions. You add in whatever problems from their infrastructure….. Sources: https://www.reuters.com/world/americas/venezuela-resorts-dark-fleet-supply-oil-ally-cuba-2024-06-25/) https://www.csis.org/analysis/2023-year-mexican-oil-cuba#:~:text=A1:%20For%20decades%2C%20Venezuelan%20oil,over%20a%2030%20percent%20decrease) https://www.reuters.com/markets/commodities/russian-oil-arrives-cuba-after-year-long-hiatus-2024-03-31/#:~:text=Pi%C3%B1%C3%B3n%20said%20it%20was%20too,Sign%20up%20here) https://www.eia.gov/international/overview/country/CUB#:~:text=Cuba%20imports%20most%20of%20its,under%20a%202000%20energy%20agreement) Cuba's total energy supply mix in 2022 (must current year available) was: 0% coal, 80.6% crude, Biofuels and waste 11.6% and everything else including hydroelectric 7.8%. Cuba's domestic energy production in 2022 was: 52.9% crude oil, Biofuels and waste 28.2, everything else 18.9% Cuba's electricity generation mix in 2022 was: crude 83.5% and natural gas at 12.5 and everything else 4% Energy mix meaning total final consumption in 2022 was: 4% crude oil, 50% crude refined products, electricity 23.4% and everything else 22.3%. So you overload your crude oil basket and "secure" your crude partners who are anything other than reliable and you do not diversify your energy mix (the .... I mean how can you not see this as a mounting problem? Obtuse really. Icloud link to some charts of value to me including the charts that show a complete non-responsiveness to diversifying out of crude oil into other means of power production since 2000: https://share.icloud.com/photos/0a5WDcRcv4YFBPQSMBiFW-TIw) Get full access to GeopoliticsUnplugged Substack at geopoliticsunplugged.substack.com/subscribe)