Controversial New Fuel Deal Emerges as Migration Pressure Rises

Jun 12

Written By CEDA The Center for Engagement and Advocacy in the Americas

After news of a proposed deal involving a Florida-based fuel supplier and private-sector actors in Cuba became public, it quickly drew backlash from segments of the South Florida Cuban American community. The arrangement, which would have allowed fuel deliveries to Cuba's private sector while avoiding U.S. sanctions, is now on hold after the State Department made a statement clarifying that the supplier “has not received any U.S. license for this transaction.” Bloomberg reported that this would be the largest U.S. fuel shipment to Cuba since the Cold War embargo.

Many firms in South Florida and along the Gulf Coast have been importing small quantities of fuel to Cuba's private sector since the Trump administration permitted the practice in February. The administration framed the policy change as a way to improve living conditions and support independent economic activity, even as broader U.S. measures have virtually prevented Cuba’s access to fuel imports. These companies use small “ISO tanks,” each capable of carrying roughly 6,900 gallons of gasoline, which must then be returned to the US for refueling.

The shipments have thus far avoided U.S. sanctions because Cuban private micro, small, and medium-sized enterprises (MSMEs, or Mipymes) retain title over the ISO tanks, preventing direct interaction with sanctioned Cuban entities. The limitations of this model, however, prompted the U.S.-based midstream energy and advisory firm Vanguard Energy to pursue a larger-scale arrangement.

Under the legal guidance of Miami-based law firm Akerman, Vanguard seemed to have devised a mechanism to deliver significantly larger quantities of fuel to the island. In May, Vanguard signed a contract with the Cuban state company Unión Cuba Petróleo (CUPET) to store fuel in Cuba. This arrangement would allow Vanguard to transport fuel by tanker, maintain ownership of the product, and distribute it from storage facilities on the island.

The president of Vanguard Energy told the Miami Herald that the company hopes to use a vessel capable of carrying over 250,000 barrels of diesel fuel and plans to deliver fuel “once a month or every 40 days.” Cuba currently faces an estimated fuel deficit of approximately 60,000 barrels per day.

According to the Miami Herald, Vanguard plans to sell the fuel to pre-vetted customers, including the U.S. Embassy in Cuba. Cuba’s Foreign Ministry recently blocked a U.S. Embassy request to import diesel fuel for its generators in Havana, arguing it could not justify granting U.S. diplomats access to a resource being withheld from ordinary Cubans. Vanguard maintains that transactions will bypass the Cuban banking system and that the company will maintain control over the fuel, its buyers, and inspection procedures. The company says it has implemented a due diligence program to prevent the fuel from reaching the government, though enforcing such safeguards in practice will likely prove difficult.

This deal was complicated by the June 11 designation of CUPET on the U.S. Office of Foreign Assets Control (OFAC) Specially Designated Nationals List (SDN List). Under U.S. sanctions regulations, assets and property interests of SDNs subject to U.S. jurisdiction must be blocked. Miami-Dade County also responded to the news of a potential deal by revoking Vanguard’s Local Business Tax Receipt. The county tax collector wrote on X, “Miami-Dade County will not serve as a base of operations for activities that undermine U.S. foreign policy, violate federal law, or provide support to a regime that has denied freedom to the Cuban people,” further solidifying the community’s opposition to the arrangement.

Although this fuel could provide meaningful relief to ordinary Cubans, it is explicitly prohibited from reaching the Cuban state. That means no fuel for the national electric grid, public hospitals, emergency medical services, water distribution systems, or other public infrastructure that ultimately serves the Cuban population. Despite being an authorized recipient of ISO tanks, Caritas Cuba has struggled to carry out its work, in part because of fuel shortages. Whether intentional or incidental, the result is to increase U.S. leverage over a heavily fuel-dependent island struggling to keep the lights on.

The country has not received a major shipment of oil since a Russian tanker arrived in March, providing only temporary relief. The US has effectively imposed a de facto oil blockade on the island, sharply constraining fuel flows. Russia’s President Vladimir Putin recently acknowledged contacts with the White House regarding “the Cuban issue,” possibly regarding a second oil tanker reportedly slated to reach Cuba in May before ultimately being rerouted, potentially due to the veto of the Trump administration.

If the license were approved, it would open the possibility for other firms to replicate it, expand fuel exports to Cuba’s private sector, and could accelerate privatization pressures within the Cuban economy. South Florida's Cuban American business community already appears eager to participate in this emerging opening, with some making formal plans to invest on the island.

U.S. sanctions imposed by the May 1 executive order have also further disrupted Cuba’s access to revenue through international payment networks and tourism. On June 2, the foreign bank that processes Visa and Mastercard transactions in Cuba notified Fincimex, the financial entity operated by the Cuban military conglomerate, GAESA, that it would suspend its relationship effective June 6. The move effectively cuts off Cuba from processing payments through Visa and Mastercard, limiting the island’s ability to receive revenue from foreign customers. The executive order has also contributed to the withdrawal of major international tourism operators, with hotel chains such as Meliá and Iberostar scaling back their presence and several Canadian airlines either reducing or suspending their services indefinitely, delivering another significant blow to Cuba's already devastated tourism sector.

Meanwhile, as talks between the US and Cuba stall, fears continue to mount regarding potential U.S. military action on the island. Axios recently reported that the administration has now war-gamed new military response scenarios in the event Cuba “descends into chaos.”

The U.S. Naval Station Guantánamo Bay has also gotten more attention from the administration in recent days as Secretary of Defense Pete Hegseth traveled to the Naval Base on June 10 to check on troop readiness, adding, “What happens with the future of Cuba is in the hands of the president of the United States and the leadership of Cuba.” Mr. Hegseth’s last visit to the Naval Base was in February of 2025, when he traveled with Fox News host Laura Ingraham to tour new migrant detention facilities.

This comes shortly after a high-profile encounter at the fence dividing Cuba from the Naval Station, when SOUTHCOM Commander Gen. Francis L. Donovan met with senior Cuban military leaders to discuss “operational security matters.” While fence-line talks are a routine security mechanism between the two countries, the participation of the SOUTHCOM Commander elevated the meeting well beyond its traditional format and could be interpreted as a high-level signal of U.S. resolve, similar to the intent behind the recent visit of the CIA Director to Havana.

The Trump administration appears to be searching for interlocutors inside Cuba. As Mr. Rubio told Congress, there are only “technocrats to work with,” a prospect that may prove politically difficult for sectors of South Florida that have drawn a firm line against engagement involving members of the Castro family.

CEDA continues to highlight conditions on the ground:

Approximately 3 million Cubans experience water shortages each day.
Families coping with chronic illnesses struggle to afford adequate nutrition.
Cancer patients increasingly turn to the black market to obtain chemotherapy drugs when they can find them.
Accumulating garbage has increased the risk of mosquito-borne illnesses ahead of the summer season.
Infant mortality has reportedly doubled, reaching 9.9 deaths per 1,000 births.
Cuba has shortened its school year by 15 days amid mounting pressures.

UN High Commissioner for Human Rights Volker Türk recently warned that conditions are approaching dire levels that could result in widespread harm and loss of life. He urged the immediate lifting of sanctions while also calling on the Cuban government to "release all those arbitrarily detained, and to engage in constructive dialogue."

The situation now appears to be nearing a breaking point, with potentially far-reaching humanitarian, political, and migratory consequences. Governments across the region are already preparing for the possibility of increased outward migration from Cuba. The Cayman Islands recently allocated $6.72 million USD to establish a migrant detention center in anticipation of a surge of irregular arrivals from Cuba. Designed to house up to 240 people, the facility is expected to be completed within 8 to 12 weeks.

Across the region, we already see Cubans migrating with increasing irregularity. In early June, Brazilian authorities rescued 108 Cuban migrants attempting to cross the border from Guyana. In 2025, Brazil received a record 44,381 Cuban asylum applications, up from 15,339 in 2021. These developments offer insight into how the effects of Cuba’s deepening crisis are increasingly being felt beyond the island’s borders. As conditions worsen, the prospect of a broader regional migration challenge grows.

U.S.-CUBA NEWS

U.S. Imposes Sanctions on Cuba’s President and Cuban Ministries

On June 4, the US expanded sanctions against Cuban officials and state entities for their alleged role in destabilizing U.S. national security. The sanctions, enforced through President Donald Trump’s May 1 executive order, impose secondary sanctions on foreign businesses or individuals that engage with the designated actors. The US has specifically designated five Cuban entities and five individuals, including the Ministry of the Revolutionary Armed Forces of Cuba (MINFAR), the Cuban Institute of Friendship with the Peoples (ICAP), and the Committees for the Defense of the Revolution (CDR).

The U.S. sanctions against the Cuban state apparatus included the immediate family of President Miguel Díaz-Canel and also former president Raúl Castro, his son Alejandro Castro Espín, and his grandson Raúl Guillermo Rodríguez Castro. The designation comes only one month following the U.S. indictment of Raúl Castro for the government’s 1996 shootdown of two Brothers to the Rescue planes.

President Díaz-Canel responded on X that these new designations will continue to worsen U.S.-Cuba relations, as Cuba attempts to confront what he calls an aggressive and pervasive "imperialist onslaught” by the US. In response to the announcement, the Chinese Ministry of Foreign Affairs stated that they firmly oppose the U.S. sanctions against Cuba and urged the Trump administration to immediately stop its blockade and foreign interference in Cuba.

Republican Congressional Candidate Meets with Cuban Officials

On June 6, Republican congressional candidate Vic Mellor, a veteran and entrepreneur from Rhode Island, traveled to Havana to deliver humanitarian aid. During the visit, he also met with the grandson of Raúl Castro, Raúl “Raulito” Guillermo Rodríguez Castro, known as “el Cangrejo.”

Mellor said the trip was partly encouraged by the Cuban-American National Chamber of Commerce (CANCC), a Miami-based group of business leaders interested in future investment opportunities in a democratic Cuba. Both CANCC and the Trump administration have denied any involvement in organizing or endorsing the visit. This marked his second visit to the island in recent months.

Mellor insisted that his visit was not circumventing Washington and Secretary of State Marco Rubio, but instead supporting U.S.-Cuba engagement. During his dinner with Rodríguez Castro, they spoke of business negotiations, the future of Cuba, and Mellor’s possible role in advancing discussions on the island. Mellor told reporters that Rodríguez Castro is focused on bringing Cuba into the 21st century with renewed political and economic strength and was open to a conversation with President Trump.

Raúl Castro’s grandson has reportedly met with Mr. Rubio on at least two occasions and has also spoken with the Director of the CIA during a recent visit to Havana, underscoring his apparent role as an intermediary with access to influential figures on both sides.

Judge Opposes Freeze of Cuban Immigration Adjustment Applications

On June 5, Chief Judge John McConnell of the U.S. District Court in Rhode Island invalidated a policy memo enacted by the Trump administration to halt adjustment of status applications to those seeking refuge within U.S. borders. This memo was enacted in December 2025, structurally undermining the Cuban Adjustment Act (CAA), which allows Cubans to apply for permanent residency after at least 1 year of presence in the US.

In invalidating the memo, McConnell resumed processing on more than 2 million adjustment applications, of which 935,000 were from Cubans. He also struck down the Trump administration’s order to re-review all approved immigration applications during the Biden administration from countries included in the June 9 travel ban, which included Cuba.

He argued that the U.S. Citizenship and Immigration Services (USCIS) is making claims beyond its authority, without proper evidence. In doing so, he states that they are masking their “anti-immigrant sentiments.” With the majority of these applicants currently in the US without legal status, the lifting of the freeze is a relief for immigrants trapped in limbo over the past year. The Trump administration can pursue further legal action on the case through appealing to the Supreme Court or by requesting a stay on the order.

IN CUBA

New Draft Laws Attempt to Bolster Citizen Participation and Decentralize the Cuban Economy

On June 8, Cuba's National Assembly of People's Power published a draft law aimed at restructuring the Central State Administration, describing the initiative as an effort to promote greater “citizen participation in this legislative process” and improve administrative function. The proposal would reduce the number of ministries from 27 to 20 through a series of consolidations. These include merging the Ministries of Economy and Planning and Finance and Prices; creating a new Agro-Food Ministry responsible for agriculture, the food industry, sugar production, fisheries, and related distribution and sales; combining the Ministries of Industry and Construction; and establishing a Ministry of Environment, Habitat, and Housing that would absorb responsibilities related to environmental protection, water resources, land-use planning, urban development, and housing. The legislation will transform the Institute of Information and Social Communication into a ministry and the National Institute of Sports, Physical Education and Recreation into the Ministry of Sports and Recreation.

The proposed reforms appear aimed at reducing state bureaucracy and improving coordination across sectors facing acute challenges, particularly in food production and housing. However, this administrative restructuring alone will not translate into significantly improved outcomes without broader changes to implementation capacity and resource constraints.

On June 12, President Díaz-Canel announced an additional set of economic and social reforms, titled “Economic and Social Program for 2026”, focused on decentralizing the Cuban economy. Measures include greater autonomy for state-owned enterprises, the elimination of mandatory state intermediaries for imports and exports, expanded opportunities for private enterprise, and new avenues for Cubans on and off the island to invest in the economy. The government also pledged to reduce subsidies for inefficient state companies, simplify investment approvals, grant greater authority to municipal governments, and expand private participation in sectors such as tourism and agriculture. Referring to the exit of many foreign hotel chains earlier this month, he emphasized the necessity to take advantage of the vacated hotel infrastructure by introducing new local actors into the Cuban economy. Many of the announced measures resemble reforms that Cuban authorities have discussed for years but only partially implemented, leaving open questions about the government's willingness and capacity to execute them at scale, especially given mounting external pressures.

Small Earthquake Strikes Cuba

On the afternoon of June 8, a 6.1-magnitude earthquake struck western Cuba, with the epicenter located 65 kilometers northwest of Mantua. Felt in the province of Pinar del Río, Havana, and the Isle of Youth, geologists have reported the earthquake as “extremely rare,” stating it is the largest earthquake recorded in the Gulf of Mexico to date, belonging to a group of only six earthquakes of 5.0 magnitude or greater ever felt in the area. The earthquake was also felt in Florida, where operations ceased for the afternoon following the tremor, before resuming a few hours later. No injuries or deaths have been reported in Cuba or Florida.

CUBA’S FOREIGN RELATIONS

Key Hotel Chains Reduce Presence in Cuba as U.S. Sanctions Intensify

Following the May 1 executive order, which set a June 5 deadline for foreign entities to cease their affiliations with designated state-linked entities, many major hotel chains have begun leaving the island. Among them is Blue Diamond Resorts, a Canadian hotel chain that has operated in Cuba for over a decade and manages 10 hotels across the island. The company cited a lack of fuel, electricity, water, and other essential supplies as causing “logistical limitations” towards their operations, leading to their closure. Following their exit from Cuba, their properties will now be managed by Gaviota, a company owned by the Cuban military conglomerate Grupo de Administración Empresarial S.A (GAESA). Outside estimates assert GAESA controls at least 40 percent of the Cuban economy, although Cuba’s government recently defended the company's efficiency under the conditions imposed by the U.S. embargo on the island.

Spanish hotel chains Iberostar and Meliá were among the first to reduce their presence in Cuba. Meliá had management contracts with over 34 properties across Cuba, once making it the hotel chain with the largest presence on the island. However, 15 of these contracts, and the properties that accompany them, are now set to be terminated. They cite fuel shortages and a lack of consumer demand as possible causes, reporting that their occupancy was down 6 percent in the first half of 2026 compared with their 2025 guest count. Iberostar also announced the termination of their 12 management contracts under Gaviota supervision, a partial removal that may continue should circumstances worsen. For now, they continue their operations with non-GAESA-affiliated tourism entities such as Cubanacán and Gran Caribe.

The Indonesian hotel chain Archipelago International also halted operations in Cuba, resulting in the closure of six hotels. Although open to restarting operations “if the situation improves,” for now, their properties will continue under the sole management of Gaviota.

The Cuba Study Group estimates these closures amount to at least 49 hotels, with an estimated capacity of 27,500 rooms, representing roughly a third of the national hotel inventory. While not all companies have officially confirmed a connection between their departures and the ongoing sanctions imposed by the US, their decisions all align with the June 5 deadline to avoid U.S. backlash. In response to the sudden exit of foreign enterprises, Cuba’s government has expressed interest in opening the management to Cuban investors.

Canadian Airlines Leave Cuba “Indefinitely” Following Mounting U.S. Pressure

Earlier this year, many airlines reduced their flights to Cuba due to the ongoing fuel shortage and in early June, multiple Canadian airlines indefinitely terminated operations. This included Sunwing Vacations Group, which operates Sunwing Vacations, WestJet Vacations, and WestJet Vacations Quebec, which originally only temporarily suspended operations in April, but has now announced it will suspend operations indefinitely. Air Canada also stated on June 5 that the resumption of operations was postponed indefinitely, contrasting their February statement announcing a ‘temporary suspension.’ Air Transat suspended all operations in Cuba indefinitely on June 5, attributing the decision to the “current geopolitical situation in Cuba.”

Although the initial wave of ‘temporary suspensions of operations’ announcements was due to the fuel shortage, with airlines having to re-fuel in the Dominican Republic to complete flights, the indefinite halt of Canadian operations comes as U.S. pressure towards foreign entities in Cuba mounts.

New Regularization Pathway for Cuban Migrants in Costa Rica

On May 29, the Central State Administration of Costa Rica authorized a “Special Temporary Complementary Category” for immigrants of Cuban, Colombian, Nicaraguan, and Venezuelan origin, whose previous applications for refugee status have been pending or otherwise denied. The measure will go into effect in September 2026. Costa Rican authorities have acknowledged the large number of applications they have received—over 200,000 applicants currently waiting—alongside other delays in their immigration system, as the reasons for opening this new regularization pathway. Cubans are increasingly turning to Costa Rica, which has seen a sharp rise in Cuban asylum applications in recent years. In 2025, Costa Rica reported more than 7,000 Cuban asylum seekers, compared to fewer than 3,500 in 2020.

The new category will remain open for one year and apply to any applications received between June 2014 and May 7, 2026. Those granted refugee status will be allowed to receive compensation for their work, whether on their own or through a dependent. Applicants will be required to undergo a criminal background check and bring proof of identity, including their birth certificate.

Brazilian Police Rescue 108 Cuban Migrants at the Guyana Border

On June 8, Brazil’s Federal Highway Police (FHP) rescued 108 Cuban migrants from human smugglers at the Guyana border, the largest number of Cubans ever rescued in the municipality of Cantá. Five alleged smugglers were criminally charged.

Amongst the 108 migrants rescued were elderly people, a pregnant woman, and at least ten children, many of whom had respiratory problems. They had not eaten in three days, and were packed into vans with limited air flow. These migrants, like many others, leave Cuba via Georgetown, Guyana's capital, before continuing to the Brazilian border. The smugglers at the border with Guyana charge migrants an average of $2,800 USD for transportation. The 108 migrants rescued will be fined $19.25 USD for illegal entry, but will only be required to pay if they seek any immigration service in the future.

Brazilian authorities said they have rescued 297 Cuban migrants at this border crossing since June 2024, with Brazil recording over 41,900 asylum claims in 2025. Cuban migration to Brazil nearly tripled between 2024 and 2025, with no month in 2025 having a negative count.

Colombia, Belize, and Mexico Send Aid to Cuba

On June 5, the Colombian Presidential Agency for International Cooperation (APC Colombia) and other organizations sent 100 tons of humanitarian aid to Cuba, including medicine, solar panels, and non-perishable food. Leaving the Colombian port of Cartagena de Indias, the Colombian delegation said that their aid cargo ship demonstrated Colombia’s commitment to humanitarian cooperation between “sister nations” as they seek to support Cuban communities during a time of crisis. This is at least the fourth aid shipment from Colombia, following April 2026 and November 2025 shipments.

Similarly, on June 7, a shipment of 1,700 tons of food and other supplies arrived in Havana on the cargo ship Asian Katra. Sent on behalf of Mexico, Belize, and other Cuban supporters living abroad, the aid arrives in the midst of a worsening humanitarian crisis on the island. It was sent a month following Mexico’s last shipment, which arrived in May in collaboration with Uruguay. This is the seventh known shipment sent from Mexico to Cuba.

CARICOM Remains Divided Over Cuba

The Council for Foreign and Community Relations of the Caribbean (CARICOM), a bloc of Caribbean nations focused on political and economic ties, remains divided in its policy towards Cuba and opinion on U.S. intervention on the island. The 15-member bloc’s official statement condemned the actions of the Trump administration: a stance that closely mimics the bloc’s historic opposition to perceived interventionist actions.

Although CARICOM members usually present a unified front regarding alleged U.S. imperialist measures, Guyana and Trinidad and Tobago abstained from supporting the statement, an action representative of how Washington's policy is increasingly dividing loyalties across the region.

Recommended Reading, Listening & Viewing:

Read | Foreign Affairs: The Day After in Cuba

Read | The Wall Street Journal: Cuba’s Most Prominent Political Prisoners Are a Rapper and a Visual Artist

Read | Bloomberg: The US Should Seek Compromise with Cuba, Not Conquest

Read | The Guardian: I launched Cuba’s first independent magazine. And that’s when my troubles began

Read | Center for Strategic & International Studies: The Next Caribbean Crisis? Assessing U.S. Military Options Toward Cuba

Read | CNN: The $9 billion issue at the heart of US-Cuba tensions

Read | Los Angeles Times: Letters to the Editor: With Cuba, Trump is just looking for another victim to bully

Read | Foreign Policy: Trump Is Playing With Fire in Cuba

Read | Latin America Reports: Cuba migration reform: a lifeline for the economy or a legal cover for repression?

Listen | FIFA: Shaggy, Cimafunk, Zema - “Love Always Wins”

Read | The Guardian: No electricity, no gas, no sleep: Cubans on edge amid endless outages