Cuba’s Historically Unstable Economy

Since the Cold War era, Cuba has largely relied on international alliances with nations such as the Soviet Union for financial support and subsidized fuel. On February 11, 1966, Cuba signed a commercial treaty in Moscow, which included a $USD 91 million credit intended for agricultural modernization, irrigation, and drainage purposes in Cuban farmlands (Madden & Leboeuf, 2023). Several similar agreements like this were made, allowing Cuba to temporarily withstand U.S. and broader external economic pressure. (Yordanov, 2023)

When the Soviet Union eventually collapsed in 1991, Cuba faced a period of economic downturn, known as the Special Period in the Time of Peace. With the immediate loss of petroleum imports from the Soviet Union, several industries that were largely dependent on fossil fuels were left unable to operate. This loss in productivity led to widespread food shortages and frequent power outages across the nation. Cuba had even had to resort to extremes, such as importing millions of bicycles from China, for citizens to use as an alternative to petroleum-fueled cars (Voss, 2018). Furthermore, relentless trade restrictions with the US, accompanied by the loss of key trading partners, left Cuba in a perilous situation, with the state struggling to import the necessities to keep its citizens healthy (Wire & Filip, 2025).

However, the result of the Special Period was a system that has still fully never recovered. Cuba still largely relies on international partners to maintain stability in its economy. For over 25 years, Venezuela has remained the largest supplier of subsidized crude oil and fuel to Cuba under an agreement between the two nations based on the barter of products and services (Parraga & Lewis, 2026). Additionally, China is regarded as Cuba’s most important trading partner, with bilateral trade exceeding $USD 1.7 billion, and the installation of Chinese infrastructure (fiber-optic cables, wifi hotspots) made throughout the island (Why China's Interest in Cuba Is Waning, n.d.).

​

The Current Crisis

As of April 2026, Cuba is experiencing a worsening humanitarian crisis that is currently affecting an estimate of two million individuals across the nation. Energy shortages have disrupted healthcare services, creating a backlog of cases that the state cannot address (Pelaez & Hidalgo, 2026). The roots of this crisis can be traced back to Cuba’s fragile economy and dependency on external inputs, which leave Cuba’s operating systems vulnerable to several shocks. 

One of the key drivers behind Cuba’s problems is energy scarcity. Although the nation produces some crude oil, it lacks the refining capabilities to supply petroleum for the entire island. Instead, Cuba relies on imported fuel from international allies such as Venezuela. However, in January 2026, US president Donald Trump announced that Cuba’s reliance on Venezuelan oil and financing would be cut off, along with the executive order threatening tariffs against any country that supplies Cuba with oil (Melimopoulos, 2026). The result of this policy is visible, with the nation being unable to keep up with the national demand for fuel. The reason behind Trump’s sudden pressure on Cuba is closely linked with his broader 'maximum pressure’ strategy in Iran. By targeting a crucial resource that the nation largely depends on, the Trump administration aims to weaken the Cuban government’s ability to sustain itself. Furthermore, Cuba’s close ties with China and Russia provide the administration with an additional rationale, with the administration declaring that Cuba “constitutes an unusual and extraordinary threat” to U.S. national security. (Roy & Lindsay, 2026)