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LatAmOil COMMENTARY LatAmOil
Casualties and damage
As of press time, the full details of the story were still emerging. One firefighter was reported dead, with another 14 missing and five more injured and in a critical condition. Among the civilian population, more than 100 people were said to be injured, with 22 of them hospitalised.
Cuban authorities have claimed that the fire did not cause any crude oil or petroleum products to be leaked into Matanzas Bay, even though the spread of the blaze from the first tank to the second set off a number of explosions and led to the spillage of the second tank’s contents. However, the burning fuel led the government to evacuate nearly 5,000 people from the nearby Dubrocq neighbourhood and to warn residents of areas surrounding the port to wear face masks or stay indoors so as not to breathe in fumes that might contain poisonous substances. The warn- ings extended to sites as far away as Havana, which is about 100 km east of Matanzas
Officials in Havana have also not com- mented on the exact amount of fuel lost in the blaze. Each of the four tanks at that section of the Matanzas complex was built with a capacity of 50,000 cubic metres, or 50mn litres. The first tank was reported by AP to have been about half full before the incident, while Bloomberg said that the first tank had contained about 26,000 cubic metres of crude oil and the second 50,000 cubic metres of residual fuel oil (RFO).
Knock-on effects
The fire is also having knock-on effects in other sectors of the Cuban economy.
As noted above, the Matanzas complex is Cuba’s largest oil and petroleum product import terminal, and as such it handles much of the fuel that comes into the country to serve as feed- stock for electricity generation. Some of that fuel must now be turned away or diverted; as TankerTrackers.com reported on August 8, the Vilma, a Cuban tanker carrying around 340,000 barrels of Venezuelan crude, had to change des- tinations and dock in Antilla, a port in eastern Cuba, rather than Matanzas because of the fire.
Meanwhile, noted Jorge Pinon, an expert in Cuban energy policy at the University of Texas at Austin, one of the complex’s key customers is the country’s largest thermal power plant (TPP), the 200-MW Antonio Guiteras facility in Matanzas. Pinon told Al Jazeera on August 10 that if the Matanzas complex stopped functioning, Cuban authorities would lose the ability to deliver feed- stock to power stations – and not just to the Matanzas TPP but to other facilities as well. This will compound the problems that are already hampering operations at these stations, he said.
Pinon told Al Jazeera on August 10 that if the Matanzas complex stopped functioning, Cuban authorities would lose the ability to deliver feed- stock to power stations – and not just to the Matanzas TPP but to other facilities as well. This will compound the problems that are already hampering operations at these stations, he said.
“The problem with [electricity generation in Cuba] has not been the lack of fuel, but the
plants are very old and have maintenance prob- lems. Now they will also have a lack of fuel,” he said. “If they lose Matanzas, they lose the ability to supply the power plants.”
Problems had already arisen by Monday, August 9. On that day, Cuba’s Union of Electri- cal Workers revealed in social media posts that about 1,223 MW of the island state’s installed generating capacity was off line. It did so on the same day that that the Ministry of Mines and Energy announced that the Antonio Guiteras TPP had been disconnected from the national grid. Cuba’s Communist Party issued a similar announcement and explained that the fire was interfering with the plant’s water supply.
Policy change?
The situation is still developing, but the fire is sure to exacerbate Cuba’s far-reaching energy shortages and economic problems.
With respect to energy, the country has not been able to meet local demand for electricity. Rolling blackouts are common, and TPPs are often unable to operate at optimum levels due to inadequate maintenance and the difficulty pay- ing for supplies of fuel, which have become far more expensive in recent months.
On the economic front, meanwhile, Cuba saw annual inflation rates reach 29% in June, partly due to higher fuel costs but also because of the weakening of the national currency. The rise in prices has helped offset the 1.3% growth in GDP that the island state recorded in 2021 after two successive years of significant declines.
It is not yet clear how quickly Cuba author- ities will be able to recover from the fire at the Matanzas complex – or, indeed, whether it can recover without external assistance in its pres- ent condition. As such, the island state is likely to experience no small amount of misery in the short term. Without Matanzas, it will be even less able to supply its TPPs with enough fuel to meet demand, so electricity shortages are likely to become even more commonplace than they already are. And without electricity, Cuba’s economy will be less capable of functioning, and its people will suffer.
This suffering is sure to attract offers of assis- tance from friendly countries such as Mexico and Venezuela, both of which made significant material contributions to the firefighting effort at Matanzas, as well as other states in the region and international humanitarian organisations.
But there is also a chance that it may lead the US government to chip away further at the sanc- tions imposed on Cuba. The sanctions regime was tightened under President Donald Trump, but some restrictions have been removed under Trump’s successor, the incumbent Joe Biden. Indeed, the Biden administration took steps in May of this year to facilitate travel, family reuni- fication, technology access and remittance pay- ments. In the face of a spreading humanitarian crisis, officials in Washington – especially those who do not share the Trump administration’s animus against Cuba – may very well advocate for a policy change. ™
In the face of a spreading humanitarian crisis in Cuba, some US officials may advocate for a change in sanctions policy
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