Cuba is out of oil. Rest of world to follow?

Investment Analysis Clubs Macro Economic Trends and Risks
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The U.S. has wanted regime change in Cuba since a communist government took over when I was in elementary school. This long game may finally be coming to fruition as the Castros are leaving the scene and oil from Russia and Venezuela has been stopped.

https://www.nytimes.com/2026/05/14/us/politics/cia-director-visits-cuba.html

C.I.A. Director Visits Cuba as Tensions Rise and Island Runs Out of Oil

John Ratcliffe, the C.I.A. director, is the highest-ranking official in the Trump administration to visit the country.
By Julian E. BarnesMichael Crowley and Frances Robles, The New York Times, May 14, 2026

John Ratcliffe, the C.I.A. director, traveled to Cuba on Thursday, a day after Havana admitted that its fuel oil supplies have been exhausted for consumers and businesses.

Mr. Ratcliffe made the visit to deliver a warning to the government that it had to make economic changes and stop allowing Russia and China to operate intelligence posts in Cuba, U.S. officials said on Thursday


The C.I.A. said Mr. Ratcliffe had met with RaĂșl G. RodrĂ­guez Castro, known as “Raulito” or “El Cangrejo” (the Crab), the influential grandson of former president RaĂșl Castro. Mr. Ratcliffe also met with LĂĄzaro Álvarez Casas, the minister of the interior, as well as the head of Cuba’s intelligence services, a C.I.A. official said


“Once again it was made clear that the island does not harbor, support, finance or permit terrorist or extremist organizations; nor are there any foreign military or intelligence bases on its territory, and it has never supported any hostile activity against the U.S. nor will it allow any action to be taken from Cuba against another nation,” the Cuban government said
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Terminating communist governments has always been a U.S. objective. But Cuba has plenty of resources to exploit, from tourism to minerals. Cuba has remarkably good nationalized health care. I wonder if that will continue once the communist government is toppled and the capitalists take over.

The rest of the world may follow Cuba with electrical blackouts and cooking over charcoal if the Iran war continues very long.

https://www.wsj.com/business/energy-oil/the-world-is-burning-through-its-oil-safety-net-ebf9d4fa?mod=hp_lead_pos4

The World Is Burning Through Its Oil Safety Net

Global oil inventories have fallen at a record pace during the Iran war

By Georgi Kantchev, The Wall Street Journal, Updated May 15, 2026

An underappreciated surplus of crude oil, sloshing around storage tanks and aboard ships, cushioned the global economy when the Persian Gulf closed 2œ months ago.

That excess supply is now dwindling at a record pace, with oil executives and analysts predicting that a harsh reckoning is set to upend the relative calm in energy markets. Acute shortages of key fuels and soaring prices could emerge within weeks if the Strait of Hormuz remains shut


As a result of the inventory depletion, U.S. stocks of diesel are likely to fall below 100 million barrels, the lowest level since 2003, by the end of May


He expects that if the strait remains closed and the inventory drawdown continues, oil prices could top $130 to $140 a barrel next month. 


Even if Washington and Tehran reach a swift deal to reopen the Strait of Hormuz, the physical flow of Gulf oil won’t immediately bounce back, analysts say. Clearing possible mines, repairing infrastructure and untangling maritime logistics will push the resumption of normal shipping traffic back by at least two to three months, the IEA said. 
 [end quote]

Diesel is already over $6 a gallon on the remote Olympic Peninsula. High diesel prices directly impact the cost of goods.

There’s still plenty of time to avert this slow-motion train wreck before the world really runs out of stored oil. But prices will rise even in the best scenario and demand will fall. Demand destruction means a slowing economy.

Wendy

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I find reports of increased truck traffic across the peninsula to the Red Sea interesting. Fertilizer is getting to market but at higher cost. No doubt people see the risk of the Straits and will be looking into alternatives. Larger pipeline capacity.

It might take a few years but players and investors are adapting to the new situation. One day oil will get through w/o tariffs to Iran.

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That’s what happens when US taxpayers fund the closing of the Strait of Hormuz to advance another country’s military ambitions.

Chevron’s CEO is warning about oil shortages. Oil CEO’s never talk like that.

Two nations are now vying for 'The most hated country in the World". Iran, North Korea and Russia aren’t among them.

intercst

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The world will grind to a halt in a few years of persistent supply shortages.

intercst

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High prices will bring out marginal production. Stories are told of old wells that get capped due to the high cost of cleaning them. It’s likely that high prices mean many of those are resuming production.

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It is my opinion we would have toppled it a lot faster if we would have lifted the embargo the day Castro stepped down. There is nothing like addiction to change behavior.

Deng Xiaoping never let the Communist party collapse, but communism is so gone in China that tourists are skipping the Great Wall and touring factories.

You boil a lobster by putting him in cold water and turning the heat up a little at a time.

But I guess if being a jerk wins votes and voters sentiment then hey lets starve a country, what can possibly go wrong?

I personally hope the government in Cuba capitulates soon. Not that I think that the businesses or government in the USA will do anything honorable, but even bad investment at this point would be useful.

Cheers
Qazulight

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I don’t actually believe this. The oil wells are shutting in now. It will take a year or more to reopen them. So, moving off of oil, drilling for more oil outside of the middle east will be required.

We have the technology and the manufacturing capability to move hard off of oil. (China does actually) Yes it will take labor and capital. But in the end it will be very good for the world. Primarily I am thinking of the global south. The USA will probably move slower as it has oil.

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However, at 140 a barrel will see a significant slow down in the world economy if history repeats.

Cheers
Qazulight

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It does, but it does not necessarily mean a 1970’s issue.

The amount of de oilizatuon of the US economy has been significant.

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Most of the developed world will do okay, the developing world will get hit hard, but maybe not as hard as it seems as they can move to electric with the help of the Chinese and Indians. Both have really good electric solutions for transport that fit well into the developing nations transportation networks.

Looking at the charts, I can see survival at 200 dollars a barrel, but there will be starvation in some counties in Africa and Asia.

Qazulight

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Shortages, price hikes and economic slowdown seem to be inevitable - all it may need for markets is a point of recognition.

Have you adjusted your positions?

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What further portfolio adjustments are needed? The low end of the K recovery has been squeezed for some time. High gas prices make it worse. I think you expect earnings of consumer businesses to slow. I’m amazed at the health of travel stocks. If recession hits businesses will surely limit travel. Upper middle class continues to spend but they too might be responding to higher prices. Auto sales at 12mm down from normal 16 to 18MM. Down 25 to 30%.

Tech stocks continue to do well for AI spending but some believe consumer economy is already in recession.

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We have been trying to bring the Iranian regime to their knees for decades. Now the regime thinks it can bring us to our knees.

Somethings got to give. Hint it won’t be us.

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Why not? The stakes are asymmetric. The regime faces an existential threat; we do not. The regime can’t pull up and leave; we can. The regime has no democratic processes by which citizen discontent shape policy; we do.

Historically, these types of asymmetric situations sometimes result in the country that is being invaded managing to rebuff the efforts of the invading power.

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I really think you should answer that.

And I do care if the regime is having a bad day.

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I will say it used to be comforting to everyone around the world that the liberal democracies had asymmetric relations with dictatorships. What went wrong?

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I thought my answer was clear from context. I think it’s entirely possible that the “something” that has to give ends up being us. We can quit the battle without facing existential stakes - we’re not fighting for our very existence the way the regime is. So a very plausible outcome is one where we declare victory and leave without “winning” the war in any material way, simply because the fight isn’t worth the cost to us.

That’s why even though you’re correct in saying that something’s got to give, it’s far from certain that it won’t be us. I personally think it’s slightly more likely that we’re the ones who yield, rather than the regime.

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That is not true. The regime does not have the nuclear materials right now. The material is buried.

Not true, now the regime will race head on to get nukes. The regime will use them against SA which will insist on being nuclear armed as well. The two are fierce rivals.

It is not Israel versus Iran. The reality has always been SA versus Iran. We in the US do not fully comprehend the regional politics.

Israel is the common battle cry, but a dehumanized Israel is not the real battle. Most of these wars are Muslim against Muslim.

We won’t survive a nuclear was if 20 war heads go off.

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Perhaps - but that’s not existential stakes for us. It’s certainly bad, which is why it was folly to start this war. But there are several countries that have nuclear weapons, including at least two that are acute geopolitical rivals/enemies, and we have survived. Whereas we are literally trying to destroy the Iranian government. Again, the stakes are different.

Plus, there’s no way to make sure that Iran “never” gets a nuclear weapon no matter what happens in this war, now that we’ve taken a ground invasion off the table. If you don’t take over the country yourself, the most you can ever get out of Iran is a promise not to build nukes in the future. They can always repudiate that promise, though (just like we broke our agreements to them). If Iran wants a nuke, they’ll get a nuke. The most effective strategy for the last several decades has been to try to make it so Iran didn’t choose to make that final rush to a nuclear weapon, through a mix of incentives and threats. But we’ve now crippled that framework, perhaps irrevocably.

So again - the most likely outcome of this war is that Iran retains the ability to get nukes no matter what we do, since there’s no real way to completely control the future of a sovereign country with an industrial base and nuclear energy. A very possible outcome of the war is that we don’t even get as much as we had under the JCPOA.

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At 60% enriched material, it was folly not to start this war.

It would be folly to walk away.

The ordinance will be called in from satellite observations to aim much less expensive conventional bombs with extreme accuracy. Hopefully, that topples this government without our boots on the ground.

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Except the war doesn’t change the fact that they have 60% enriched material. It can’t prevent them from getting to 60% enriched material in the future, if they choose. That’s why it was folly to start the war. They’ve had 60% enriched material for years, but never actually built a nuclear weapon, because they faced strong incentives not to (namely that the U.S. and Israel might attack them if they started that final sprint). Now that they’ve been attacked even though they didn’t do the final sprint, they face different incentives. Again, folly.

And when it doesn’t? We’ve already blown up most of what was worth blowing up. The military has been very competent in executing the war. Presumably that extends to properly prioritizing the targets that were most important and most likely to inflict the greatest harm on the regime and blowing those up first. So all that’s left for us to blow up are the more marginal targets that didn’t make the cut of the first 10K or so strikes. Which means there’s not much left to bomb, and what’s left isn’t all that important. We’ve exhausted a lot of the rungs on the conventional escalatory ladder.

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Ah yes, the resounding confidence of hope. I love it when my people share their ideas with me and when I ask, “Will it work?”, they confidently answer
hopefully!

Let’s beat a dead horse. The only reason they have 60% enriched material is because the US pulled out of the JCPOA. War will not fix the problem we created. It was folly to pull out of that agreement, now we’re in a folly war.

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