Cuba’s Fuel Crisis Disrupts Aviation Flows, Exposes Caribbean Supply Fragility

Valentia Energy Partners Newsroom — Oil & Gas
Date: 02-11-2026

Market Snapshot

• Brent: ~$70/bbl

• WTI: ~$65/bbl

Trend Diagnosis:
Prices remain structurally range-bound, but regional refined product dislocations are creating localized execution stress.

Key Highlights

• Refined product tightness: Cuba faces acute jet fuel and gasoline shortages, forcing flight suspensions and tankering strategies.

• Sanctions overhang: Ongoing constraints around Venezuelan crude and product flows continue to distort Caribbean supply chains.

• Freight bottlenecks: Limited small-product tanker availability in the Caribbean Basin is amplifying delivery delays.
  (Sources: market consensus pricing, shipping data, regional trade flows)

The Why

Cuba’s fuel shortage is not simply a domestic supply issue — it reflects broader structural fragility in Caribbean refined product logistics. With limited domestic refining capacity and heavy reliance on imported crude and finished products (primarily from Venezuela), supply disruptions translate almost immediately into operational stress.

The aviation sector is particularly exposed. Airlines are increasingly forced to tanker fuel into Havana and other airports, increasing uplift at origin and reducing local demand. This shifts product demand patterns across the Gulf Coast and parts of Latin America, tightening jet fuel balances elsewhere while leaving Cuba structurally short.

Simultaneously, constrained access to dollar-based trade finance and insurance complicates procurement cycles. The result is a region operating on thin inventory buffers, vulnerable to even minor shipment delays.

What the Market Is Missing

• Regional product ripple effects: Tankering behavior may tighten jet fuel cracks in parts of the US Gulf Coast and Mexico.

• Small-tanker constraints: The Caribbean relies heavily on smaller clean tankers; availability and freight spikes are underappreciated.

• Credit and compliance friction: Payment and sanction-related barriers are amplifying physical supply stress beyond simple availability.

This is an execution risk story — not a Brent story.

Forward Outlook (Next 5–7 Days)

1. Watch Gulf Coast jet fuel inventories: Any drawdown could signal sustained tankering demand.

2. Monitor Mexico/Cuba product flows: Mexico’s evolving export permit regime could influence emergency shipments.

3. Freight spreads: Clean tanker rates in the Caribbean Basin may tighten further if replacement cargoes are delayed.

Cross-Market Signal

• Refined product spreads: Jet fuel and gasoline cracks in the Atlantic Basin could see tactical volatility.

• Inflation risk: Localized aviation fuel scarcity translates into higher regional transport costs.

• FX impact: Countries reliant on dollar-settled imports remain exposed to both currency pressure and logistics risk.

Strategic Overlay

Missed Opportunities (Where We Can Level Up Fast)

• Caribbean refined product fragility is consistently underestimated in global pricing models.

• Tankering behavior is an early indicator of regional supply stress — often visible before crack spreads move.

• Traders focused solely on crude benchmarks miss the margin signals embedded in product freight.

Strategic Implications (If Executed Well)

• Procurement: Secure optional jet fuel cargoes in the Gulf Coast before regional premiums widen.

• Hedging: Consider crack-spread positioning rather than flat-price crude exposure.

• Trade Execution: Early freight bookings and flexible discharge options will determine margin resilience.

For execution-focused insights on refined product dislocations, freight shifts, and geopolitical flow risk, subscribe to the Valentia Energy Partners Newsroom.