US could lift Cuba embargo after oil discovery

The Telegraph

The five decade-long United States embargo against Cuba could finally be lifted after the discovery of an enormous oil field in Cuban waters.

The world's longest-running embargo has endured in part because there was little the US wanted to buy from its impoverished neighbour.

But the discovery of between five and 20 billion barrels of oil in the deep waters off Cuba's north coast, only 60 miles away from Florida, has made American businessmen and politicians consider lifting the embargo.

Repsol, the Spanish oil firm, will start exploratory drilling within months. If it strikes a large deposit, the trade embargo could be significantly revised or removed, according to Professor Mark Jones, an expert on Latin America at the Rice University of Texas.

"The greater the drilling and production, the greater the pressure will be to engage in a complete overhaul of the trade embargo, either getting rid of it altogether or watering it down substantially," he said.

"I think it is fairly realistic, since the embargo is an anachronism of the Cold War sustained only by a misguided fear of a backlash from anti-Castro Cuban Americans."

Opponents of the US embargo argue that it has failed to drive Fidel and Raul Castro from power and that if Cuba becomes rich from its oil, regime change is even less likely. They also argue that warmer relations between the two countries could help stave off an environmental crisis if there is a spill from the field.

Jorge Pinon, visiting research fellow with Florida International University's Cuban Research Insitute, warned: "The US embargo means Repsol can't pick up the phone to Washington. Any equipment to help in a problem would have to come from the UK or Norway or somewhere else." Repsol will drill at least one and possibly as many as five wells in waters of similar depth to those where an explosion on BP's Deepwater Horizon rig caused eleven deaths and led to an environmental catastrophe. In the event of a further disaster, as much as 90 per cent of any spill could end up in US waters.

"If there is any leverage that could push the Obama administration or the US Congress to push for change it would be from an environmental standpoint." said John Kavulich, senior policy adviser at the US-Cuba Trade and Economic Council.

He argued the US could treat Cuban oil in the same way it treats oil from Venezuela: "We don't like them but we like their product and we are going to buy it".

The current embargo expires this September. However, Prof Jones suggested that it is unlikely that Barack Obama will move to lift it before the conclusion of his next run for President.