Cuba Oil Sanctions Intensify
US Sanctions Cuba's State Oil Company CUPET Citing Expropriation and Security Links
Key Points
U.S. Secretary of State Marco Rubio said the designation of CUPET followed the fact that it holds “key assets [that] were unlawfully expropriated from American owners years ago.”
A report said OFAC issued its “first designations under Executive Order 14404” on May 7, 2026, noting EO 14404 was signed by President Donald Trump on May 1, 2026 and built on an earlier EO 14380 signed Jan. 29, 2026 that declared a Cuba emergency and introduced oil-supplier tariffs.
The same analysis said EO 14404 further authorizes blocking sanctions on foreign individuals and entities supporting Cuban authorities, specifically in sectors including energy, defense, metals, and financial services—described as a “secondary sanctions framework” akin to Russia/Iran measures implemented under IEEPA.
The analysis estimated GAESA, the military-run conglomerate behind CUPET, controls roughly “40% to 70% of the Cuban economy,” with influence extending beyond energy into “tourism, retail [and] real estate,” helping explain why freezing CUPET can have broader ripple effects.
The United States formally sanctioned Cuba's state oil company, Unión Cuba-Petróleo (CUPET), on June 11, 2026, freezing any U.S. assets and barring Americans from doing business with it. Secretary of State Marco Rubio announced the move, saying CUPET holds "key assets [that] were unlawfully expropriated from American owners years ago" CiberCuba.
The designation is the latest step in a sweeping "Maximum Pressure" campaign against Cuba's communist government. It follows a series of executive orders and earlier sanctions that have already cut off most of the island's oil supply, triggering what analysts call the worst energy crisis in Cuban history Insider Paper.
How Two Executive Orders Built the Oil Blockade
The legal groundwork started on January 29, 2026, when President Trump signed Executive Order 14380. That order declared Cuba a national emergency threat and authorized tariffs on any country shipping oil to the island. International suppliers quickly began pulling back to avoid U.S. trade penalties Value the Markets.
Trump then signed Executive Order 14404 on May 1, 2026. It created a "secondary sanctions" framework — similar to measures used against Russia and Iran — targeting Cuba's energy, defense, metals, and financial sectors. The first designations under EO 14404 came on May 7, hitting the military conglomerate GAESA and its head, Brigadier General Ania Lastres Crypto Briefing.
GAESA's Iron Grip Made CUPET an Easy Target
CUPET does not operate independently. It sits inside GAESA, a military-run conglomerate that controls an estimated 40% to 70% of Cuba's entire economy, spanning tourism, retail, and real estate, according to the State Department CiberCuba. Because GAESA was already a blocked entity, CUPET was legally covered — any company 50% or more owned by a blocked entity is itself blocked under OFAC rules clarified in FAQ 1258 on June 4 Crypto Briefing.
Rubio put it plainly: "Like every resource on the island, energy has long been weaponized by Cuba's Communist government as a tool of both repression and self-serving regime kleptocracy." A leaked 2024 report had alleged GAESA held at least $18 billion in liquid assets Value the Markets.
Cuba's Power Grid Is Already on the Brink
The sanctions pile onto a crisis already taking a severe human toll. Oil and oil products make up 84% of Cuba's total energy supply. Parts of Havana have seen blackouts lasting up to 30 consecutive hours as of June 2026. Imports of food and medicine have been slashed by 60% to 70% since January Value the Markets.
A February fire at the Nico López refinery in Havana dealt another blow to domestic fuel processing. The only significant oil delivery to break through since January was a Russian tanker carrying 100,000 tonnes of crude that docked in March Democrata.
Foreign Companies Now Face a Stark Choice
The secondary sanctions framework is the sharpest edge of EO 14404. It means non-U.S. companies — including Spanish and Canadian energy firms — must now choose between doing business with Cuba or keeping access to the U.S. financial system. Legal experts warn this creates "new uncertainties" for global trade well beyond the Caribbean Crypto Briefing.
The UN has pushed back hard. UN High Commissioner for Human Rights Volker Turk called for an "immediate" lifting of the sanctions, saying they are "directly harming Cubans, particularly the most vulnerable." Cuban President Miguel Díaz-Canel has called the measures a "criminal blockade" designed to cause a humanitarian collapse Insider Paper.
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