Fuel Operations - Cuba
Technical guide and regulatory compliance framework for the commercialization, maritime transport, and logistics of hydrocarbons—including diesel, gasoline, natural gas, LPG, LNG, fuel oil, aviation fuel, and crude oil—destined for Cuba under the regulations of OFAC and the U.S. Department of Commerce (BIS).
Fuel Operations - Cuba
Starting Point
For transactions involving diesel, gasoline, natural gas, LPG, LNG, fuel oil, jet fuel, crude oil, condensates, or other petroleum products destined for Cuba, it should not be assumed that a general OFAC license automatically authorizes the transaction. The most relevant OFAC authorization is often 31 C.F.R. § 515.533(a), but it only applies when the export or reexport is licensed or otherwise authorized by the U.S. Department of Commerce through BIS.
BIS authorizes the product, destination, end user, and end use. OFAC authorizes the incidental transactions associated with the export or reexport, including payments, transportation, insurance, documentation, and related services, provided that the underlying export or reexport is authorized by BIS.
How do OFAC and BIS authorizations apply to fuel exports and transactions with Cuba?
For transactions involving petroleum products bound for Cuba, companies must not assume an automatic OFAC general license exists. The primary authorization mechanism is 31 C.F.R. § 515.533(a), which functions only when the export or re-export is fully licensed or authorized by the Department of Commerce via the Bureau of Industry and Security (BIS). BIS authorizes the product, final user, and end-use, while OFAC authorizes the ordinary incidental transactions, such as payments, shipping, P&I insurance, and logistics.
Accordingly, any Cuba-related transaction should be analyzed with respect to:
| Parties involved |
| End user |
| End use |
| Banks and payment flow |
| Vessel, insurance, and logistics |
| U.S. nexus |
| Applicable sanctions lists |
| Legal basis under OFAC and BIS regulations |
Most Relevant OFAC Authorizations
A. 31 C.F.R. § 515.533(a)
This is the most important OFAC authorization for exports or reexports to Cuba. It authorizes transactions ordinarily incident to an export from the United States or a reexport from a third country to Cuba, provided that the export or reexport is licensed or otherwise authorized by BIS.
In a fuel transaction, this authorization may cover, subject to compliance with all requirements:
| Payments related to the authorized shipment |
| Maritime transportation |
| Insurance and P&I coverage |
| Commercial documentation |
| Logistics services |
| Invoicing |
| Banking processing related to the transaction |
| Other services directly linked to the specific shipment |
Key Limitation
Section 515.533(a) does not itself authorize the export of fuel. The export or reexport must first be authorized by BIS. If the BIS authorization basis fails, the OFAC authorization basis may also fail.
Section 515.533(a) should not be relied upon if:
| There is no clear BIS determination |
| The transaction is not connected to a specific shipment |
| A blocked account is involved |
| A blocked person or entity participates in the transaction |
| The buyer, bank, terminal, consignee, or agent appears on a restricted list |
| Cuba, the beneficial owner, bank, port, end user, or actual routing is concealed |
B. 31 C.F.R. § 515.534
This provision is particularly useful during the preliminary stage of a commercial opportunity.
What Does It Permit?
It authorizes the negotiation and execution of contingent contracts, provided that performance expressly remains conditioned upon obtaining all required OFAC, BIS, or other applicable federal authorizations.
It may apply to:
| Letters of Intent (LOIs) |
| ICPOs |
| FCOs |
| MOUs |
| Preliminary offers |
| Contracts subject to conditions precedent |
| Conditional bids and proposals |
What It Does Not Permit
It does not authorize implementation of the transaction before obtaining all required approvals.
Accordingly, parties should not:
| Receive payments |
| Accept deposits |
| Issue shipping instructions |
| Nominate a vessel |
| Load product |
| Transfer title |
| Perform services |
| Issue final transaction documentation |
Recommended Clause for Preliminary Documents
This proposal and any obligation regarding supply, payment, shipment, title transfer, or the provision of services are expressly conditioned upon obtaining and maintaining all applicable authorizations, licenses, exceptions, banking approvals, sanctions clearances, and export control validations, including those required by OFAC, BIS, and any other competent authority. No party shall perform, pay, ship, transfer title, or provide services until written authorization has been issued by Legal/Compliance.
C. 31 C.F.R. § 515.584
This section may be relevant for payments, banking activities, and financing involving Cuba, provided the underlying transaction is authorized or exempt under the CACR.
In practice, it may be relevant for:
| Processing wire transfers |
| Correspondent banking activities |
| Financing authorized exports |
| Financial institutions with a U.S. nexus |
| Payments connected to authorized exports or reexports |
Important Point
Section 515.584 does not legalize an export lacking a valid BIS or CACR basis. It can only operate where the underlying transaction is already authorized.
D. 31 C.F.R. § 515.550
This regulation is relevant for maritime transactions, particularly when a vessel calls at Cuba and may subsequently enter U.S. ports. The regulation authorizes certain vessel-related transactions where trade with Cuba is authorized under the CACR, including under § 515.533 or a specific license.
For fuel trading transactions, the following should be reviewed:
| Vessel IMO number |
| Ownership |
| Operator |
| Charterer |
| Flag |
| P&I insurer |
| AIS history |
| Prior and subsequent ports |
| STS operations and transshipments |
| Whether the Cuba-related trade is actually authorized |
Cuba General License 1 and E.O. 14404
In May 2026, OFAC issued guidance concerning Executive Order 14404, which established an additional sanctions program relating to Cuba that is separate from the CACR. The Executive Order contemplates additional risks for foreign persons operating, or having operated, in sectors of the Cuban economy including: energy, defense, metals and mining, financial services and security.
OFAC also issued Cuba-related General License No. 1, authorizing transactions otherwise prohibited under E.O. 14404 where those same transactions are already authorized or exempt under the CACR.
Cuba General License 1 does not create new authorization to sell fuel to Cuba. Rather, it confirms that transactions already authorized under the CACR are not separately prohibited by E.O. 14404.
Relationship with BIS and License Exception SCP
BIS generally requires a license for exports or reexports of gas and other petroleum products subject to the EAR to Cuba. However, BIS has indicated that certain petroleum products may be eligible under License Exception SCP, provided all requirements are satisfied.
SCP may be relevant where the product is intended for:
| The Cuban private sector for private economic activities |
| Individual Cuban persons for personal or household use |
However, SCP should not be used where the fuel:
| Primarily generates revenue for the Cuban government |
| Supports state operations |
| Benefits state-controlled infrastructure |
| Supports military, intelligence, or security entities |
| Lacks a clearly documented private end user |
| Enters a state-controlled distribution chain |
In addition, beginning March 4, 2026, BIS suspended the use of SCP § 740.21(b)(1) for transactions involving the deposit of foreign funds into a Cuban-owned bank.
Operational Impact
If a transaction depends upon SCP § 740.21(b)(1) and payment will be deposited into a Cuban bank, the transaction should immediately be placed on STOP/HOLD status.
Principal OFAC Risks in Cuba Transactions
Sanctioned or Blocked Parties
All parties must be screened against the SDN List, non-SDN sanctions lists, and other applicable sanctions databases. The OFAC 50 Percent Rule must also be applied. Under that rule, an entity owned 50 percent or more, directly or indirectly, by one or more blocked persons is itself considered blocked even if not specifically listed.
At a minimum, screening should cover:
| Buyer |
| Seller |
| Intermediaries |
| Brokers |
| Banks |
| Correspondent banks |
| End user |
| Consignee |
| Terminal |
| Port agent |
| Vessel |
| Shipowner |
| Operator |
| P&I insurer |
| Ultimate beneficial owners |
| Directors and signatories |
Cuba Restricted List
OFAC restricts certain direct financial transactions involving entities listed on the Cuba Restricted List, which contains entities affiliated with Cuba's military, intelligence, or security sectors.
This is particularly important because fuel transactions may involve:
| Terminals |
| Banks |
| State agencies |
| Logistics providers |
| Ports |
| Consignees |
| Energy companies |
| State-controlled holding companies |
If any party appears on the Cuba Restricted List, the transaction should be placed on HOLD pending Legal/Compliance review to determine whether an authorization, exception, or rejection is appropriate.
Cuban Banks
The use of Cuban banks presents a critical risk, particularly when a transaction seeks to rely upon SCP § 740.21(b)(1). BIS has suspended that exception for transactions involving deposits of foreign funds into Cuban-owned banks.
Accordingly, transaction files should document:
| Sending bank |
| Receiving bank |
| Correspondent banks |
| Ultimate beneficiary of the account |
| Whether a Cuban bank is involved |
| Whether foreign funds will be deposited in Cuba |
| Whether the banking route is complete, transparent, and consistent |
State or Military End User
Where SCP is used as the BIS basis and § 515.533(a) is relied upon under OFAC, the parties must demonstrate that the fuel will not primarily benefit the Cuban government, a state enterprise, the military, intelligence services, or security organizations.
It is insufficient for a buyer merely to claim that it is "private." Evidence should establish:
| Who consumes the product |
| Where it is consumed |
| The activity for which it is used |
| Whether the volume is reasonable for that activity |
| Whether resale or redistribution occurs |
| Whether connections exist to state entities |
| Whether payments or logistics benefit the state |
Concealment, Structuring, or Sanctions Evasion
Any attempt to alter or conceal material information should be treated as a critical red flag, including:
| Omitting Cuba from transaction documents |
| Changing product descriptions |
| Altering consignee information |
| Using undisclosed banks or payors |
| Changing discharge ports |
| AIS deactivation without legitimate explanation |
| Undocumented STS operations |
| Use of offshore intermediaries without business justification |
| Splitting payments or contracts to avoid screening |
| Using inconsistent documentation |
Such conduct may transform a commercial transaction into a potential sanctions-evasion matter.
Transaction Roadmap
Before issuing a binding quotation, entering into a contract, financing, shipping, or providing services, there should be documented answers to the following questions:
| Product | What is the product, what is its classification, origin, specification, and is it subject to the EAR? |
| BIS | What is the exact BIS basis: SCP, specific license, or another exception? |
| OFAC | Can the transaction be covered under § 515.533(a), § 515.534, § 515.584, GL 1, or another authorization? |
| End User | Is the end user genuinely private or personal/family? |
| End Use | How and where will the fuel be used? |
| Cuban State | Does the transaction primarily generate revenue for the State or support state infrastructure? |
| Bank | Is there a Cuban bank involved or a deposit of foreign funds in a Cuban bank? |
| Lists | Does any party appear on the SDN List, Cuba Restricted List, BIS lists, or other relevant lists? |
| Ownership | Is any entity owned 50% or more by blocked persons? |
| Logistics | Are the vessel, P&I, ports, STS activity, AIS history, and consignee clear and documented? |
| Contract | Are all documents conditioned upon OFAC/BIS authorizations? |
| Approval | Has Legal/Compliance issued a written determination? |
Official Sources
OFAC Cuba General License No. 1: Transactions Authorized Pursuant to the Cuban Assets Control Regulations
OFAC Cuba General License No. 1: Transactions Authorized Pursuant to the Cuban Assets Control Regulations
OFAC Cuba Sanctions Program: Official Cuba Sanctions Program Page
OFAC Cuba Sanctions Program: Official Cuba Sanctions Program Page
OFAC FAQ 1251: E.O. 14404 and Additional Cuba-Related Sanctions
OFAC FAQ 1251: E.O. 14404 and Additional Cuba-Related Sanctions
OFAC FAQ 1253: Scope of Cuba General License No. 1
OFAC FAQ 1253: Scope of Cuba General License No. 1
eCFR 31 C.F.R. § 515.533: Exportations from the United States to Cuba and Reexportations to Cuba
eCFR 31 C.F.R. § 515.533: Exportations from the United States to Cuba and Reexportations to Cuba
eCFR 31 C.F.R. § 515.534: Contingent Contracts
eCFR 31 C.F.R. § 515.534: Contingent Contracts
eCFR 31 C.F.R. § 515.584: Financial Transactions with Cuba
eCFR 31 C.F.R. § 515.584: Financial Transactions with Cuba
eCFR 31 C.F.R. § 515.550: Certain Vessel Transactions Authorized
eCFR 31 C.F.R. § 515.550: Certain Vessel Transactions Authorized
U.S. Department of State: Cuba Restricted List
U.S. Department of State: Cuba Restricted List
BIS Guidance: Gas and Petroleum Products Under License Exception SCP
BIS Guidance: Gas and Petroleum Products Under License Exception SCP
BIS Guidance: Suspension of SCP § 740.21(b)(1) for Transactions Involving Cuban-Owned Banks
BIS Guidance: Suspension of SCP § 740.21(b)(1) for Transactions Involving Cuban-Owned Banks
OFAC Cuba General License No. 4
Authorizes transactions for third-country diplomatic and consular missions in Cuba (E.O. 14404).