The much-anticipated deal that was supposed to mark the largest shipment of U.S. fuel to Cuba in over 60 years was abruptly halted just days after it was announced. Experts now suggest that this outcome was foreseeable.
Paul Kaye, vice president of the U.S.-Cuba Trade and Economic Council, likened the failed Vanguard Energy project to the 2018 agreement between Major League Baseball (MLB) and the Cuban Baseball Federation (FCB). This initiative was also blocked by Washington after it was found to involve payments to a Cuban-regime-controlled entity.
Kaye argues that both the MLB case and Vanguard's misstep stem from a common oversight: proceeding with Cuban engagements without sufficient coordination with key U.S. governmental agencies responsible for overseeing sanctions and relations with the island.
"The wisest strategy," Kaye suggests, "is to engage directly with the Bureau of Industry and Security (BIS), the Office of Foreign Assets Control (OFAC), the Department of State, and the National Security Council before publicizing any transaction related to Cuba."
The comparison emerged after Vanguard Energy halted its plans to send 250,000 barrels of fuel to Cuba following sanctions imposed by the Trump administration against CUPET, the Cuban state oil company.
The Coral Gables-based company had announced an agreement to utilize CUPET's storage facilities and distribute fuel intended for humanitarian groups, embassies, and non-state private sector actors. However, just days later, Secretary of State Marco Rubio declared CUPET's inclusion on the U.S. sanctions list.
For Kaye, this designation was an easily foreseeable outcome.
The analyst pointed out that CUPET is a defendant in a lawsuit filed by Exxon Mobil under Title III of the Helms-Burton Act, a case currently awaiting a Supreme Court decision. Additionally, the state oil company is part of Cuba's energy sector, a primary target of Washington's new sanctions policy.
Kaye drew parallels with the December 2018 agreement between MLB and the Cuban Baseball Federation. At that time, the American league aimed to permit the direct hiring of Cuban players, but the Trump administration rejected the deal, arguing that the proposed payments would benefit the Cuban government.
In contrast, Kaye highlighted a successful example: the first direct U.S. investment authorized in a small Cuban private enterprise in 2022. Unlike the other two cases, this operation was preceded by about a year of consultations, meetings, and negotiations with various federal agencies before receiving the necessary license from OFAC.
The suspension of Vanguard's project not only leaves in limbo what could have been one of the largest supplies of U.S. fuel to Cuba since 1960. It also underscores the message that, under Washington's current pressure policy, any business involving Cuban state entities faces increasingly challenging legal and political hurdles.
According to Kaye, the warning signs were present from the start. The question now is whether other companies looking to do business with Cuba will heed the lessons from a story that, in his analysis, ended exactly as expected.
Understanding the Vanguard Energy Suspension
Why was the Vanguard Energy project suspended?
The project was suspended due to U.S. sanctions imposed on CUPET by the Trump administration, which made it legally and politically challenging to proceed.
What was the intended purpose of Vanguard Energy's fuel shipment to Cuba?
The shipment was meant to supply fuel to humanitarian groups, embassies, and non-state private sector actors in Cuba.
How does this situation compare to the MLB agreement with Cuba?
Both cases involved deals blocked by the U.S. due to concerns over payments benefiting the Cuban government, highlighting the importance of coordinating with U.S. agencies.