Cuba's Economy in Freefall: Trump's Pressure Causes Currency Reserves to Plummet and Fuel Shortages
Cuba’s economy is sinking deeper into crisis following pressure from the United States (US) that has cut off energy supplies and sources of foreign currency. The impact has seen the economy shrink, exports worsen, and citizens’ purchasing power fall to its lowest point, forcing the government to begin softening its stance.
According to The Economist, Cuba’s situation is now on the brink of a serious crisis. Fuel shortages are widespread, electricity blackouts are frequent, and economic activity is paralysed. Even the average monthly wage for Cubans is now barely enough to buy a dozen eggs.
Before the latest crisis, Cuba consumed around 100,000 barrels of oil per day but only produced 40,000 barrels. The rest relied on imports, mainly from Venezuela at about 30,000 barrels per day, which has now halted due to US pressure.
Supplies from other countries like Russia and Mexico have also been disrupted after Washington threatened tariffs on nations continuing to supply energy to Cuba. The last ship carrying 200,000 barrels of diesel even turned back at the end of February.
The effects have spread to all sectors. Airlines have cancelled flights, hotels stand empty, and hospital services have been reduced.
On the macro side, Cuba’s economic fundamentals have long been fragile. Export values have plummeted by at least 75% from 2000 to 2025, while the agricultural sector’s contribution has fallen from 52% to just 15%.
The country’s foreign currency income in 2025 is only around US$9 billion, about a quarter of comparable nations like Honduras.
Foreign exchange reserves are also dwindling. Several officials estimate the central bank holds only about US$3 billion. Cuba’s GDP is projected to contract by 7.2% in 2026.
Major sources of foreign currency have also been hit hard. Medical personnel exports, previously generating around US$4 billion, are now under US pressure. The tourism, manufacturing, and mining sectors, contributing about US$2 billion, have collapsed due to the fuel crisis.
Now, only remittances or money transfer services remain relatively stable, at around US$3 billion per year.
This economic pressure has sparked social unrest. The number of protests has surged from 30 cases in January to 130 in the first half of March. Meanwhile, the population has shrunk from 11.2 million to around 8.6 million since 2021 due to a wave of emigration.
Amid this pressure, the Cuban government is beginning to loosen policies. The diaspora is now allowed to invest, and the private sector is permitted to import fuel, marking the biggest liberalisation since the 1990s.
However, this step is deemed insufficient. US Secretary of State Marco Rubio emphasised, “not dramatic enough… It won’t solve the problem.”
Cuba is also opening opportunities for cooperation with American companies. An official stated his country is ready to forge ‘dynamic commercial relations’ with US firms.
Nevertheless, Cuba’s bargaining position is seen as very weak. A US official described the country as now “on top of the barrel” and likely to “do whatever it takes to save their lives.”