Cuban Oil to Break U.S. Embargo?
On July 24, the Washington Times reported Cuba is drilling for oil just 60 miles off the Florida coast.
Cuba, a nation the United States has embargoed for the last 45 years, may actually end up pumping oil from sovereign U.S. territory.
Although the Cuban-sanctioned drill rigs are technically on the internationally recognized Cuban side of the Straits of Florida, if the oil fields are developed, some of the oil pumped will probably come from the U.S. side. And since the drilling platforms on the Cuban leases are not physically encroaching on U.S. territorial waters, the U.S. cannot stop them.
Further frustrating matters is the fact that Florida lawmakers, citing environmental concerns, have banned American oil companies from drilling within 100 miles of the coast. So here we have Cubans drilling for oil that may, in part, be within American boundaries—while U.S. oil companies can’t touch it.
Experts predict that, while world oil demand is still rising, global crude oil production will peak over the next few years. Consequently there has been a rush of international oil companies eyeing potential Cuban oil fields.
With the help of Canada, Europe and Latin America, Cuba has pumped $1.7 billion into developing its energy sector since 2004. Cuba’s oil production has increased from 18,000 barrels per day in 1992 to 75,000 barrels per day today. Cuba now produces approximately half of the oil it needs; an amount set to increase as it develops the 750 million barrels of proved reserves the Energy Information Administration says lay in Cuban territory. Cuba also is a joint claimant with Mexico and the U.S. for the 4.6 billion barrels of oil and 9.3 trillion cubic feet of natural gas that studies suggest may exist in the Gulf of Mexico. In fact, if even a portion of the exploration yields results, Cuba could quickly turn into a net oil exporter.
Some argue that parts of the Cuban embargo should be rescinded because they hurt American companies most. They argue that because of America’s desperate need for oil, and the fact that foreign companies will continue to rush to drill in Cuban waters, American oil firms should be exempt from the Cuban embargo.
Those who want to get rid of the embargo argue all it has done is increase other nations’ influence in Cuba. Other nations certainly don’t seem to be afraid of running the U.S. economic blockade, and seem to be taking full advantage of the lack of U.S. competition in Cuba—and in many areas besides energy.
In 2005, Cuba’s trade with the world soared 22 percent. Over 1,800 foreign firms from 43 countries attended Cuba’s 23rd International Trade Fair last year, and hundreds of millions of dollars’ worth of deals were signed.
Cuba was also able to sell over $500 million worth of bonds early this year through the London Stock Market, and the growth of tourism within the country has been the highest of any Caribbean country over the last decade.
With the amount of foreign investment moving into Cuba, especially in the wake of increasing oil exploration, even if U.S. law is not amended to allow U.S. oil companies to bid for drilling rights in Cuban waters, the days of the blockade’s effectiveness may be nearing an end.
That fact alone shows the decline of effective power and influence that the U.S. is able to project today.
