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Will Venezuela curtail cheap oil for Cuba?

March 22, 2013

WASHINGTON, D.C. – Venezuela will be hard-pressed to keep providing cheap oil and loans to Cuba and other allies given the “faltering” state of its economy, a senior U.S. commander said on Wednesday.

Cuba and other nations with ties to Caracas “realize that they cannot continue to get the very, very, very reasonable rates on loans and oil and things like that at the cost they get it,” said the head of U.S. Southern Command, Gen. John Kelly, who oversees U.S. forces in South America.

“I don’t think probably Venezuela can sustain that,” Kelly told the House Armed Services Committee.

Cuba and other states that have benefited from Caracas’ assistance were “nervous” about the future after the death of Venezuela’s president, Hugo Chávez, on March 5, the general said.

With Venezuela’s presidential elections set for April 14, Kelly said “anyone that is elected would have to rethink the flow of money that goes out of the country to essentially buy friends.”

For more than a decade, Cuba has relied heavily on cheap Venezuelan oil and favorable terms of trade to keep its economy afloat.

Kelly said acting President Nicolas Maduro was expected to defeat opposition leader Henrique Capriles in the April vote, but that he would face a daunting task with a troubled economy while lacking Chavez’s charismatic appeal.

The next president would inherit a country with “very, very high crime, high murder rates,” and its “economy is faltering,” while the oil industry badly needed investment, the four-star general said.

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