Cuba’s government on Friday announced a broad package of economic reforms hours after the United States froze the assets of the state oil company, the sharpest policy pivot in the U.S.-Cuba relationship in weeks as Havana seeks to decentralize its economy and open new investment channels and Washington tightens the decades-old embargo.
Speaking on state television, President Miguel Díaz-Canel defended the shift toward decentralization, saying that “these are times when change is necessary.” The measures are part of the government’s 2026 Economic and Social Program, a roadmap inspired by the economic models of China and Vietnam, according to the Cuban government. Havana says the plan is intended to address the island’s deep economic crisis, high inflation and widespread shortages of goods and services.
Earlier in the day, U.S. Secretary of State Marco Rubio announced on X sanctions against Unión Cuba-Petróleo, or CUPET, freezing all of the company’s assets under U.S. jurisdiction and prohibiting commercial transactions with it. Rubio said that “Cuba’s communist elites have turned energy into a tool of social control and profit,” accusing the government of hoarding fuel supplies for its own benefit and using them to repress the Cuban people. “President Donald Trump wants a new future for the Cuban people with greater freedom and opportunity,” Rubio wrote. The secretary of state said the sanctions were justified because CUPET operates assets that were allegedly confiscated from U.S. owners decades ago. Washington also warned that foreign companies continuing to do business with the state oil company could face secondary sanctions.
Cuba announced the reforms two days after the Miami Herald reported on a proposed commercial agreement between Florida-based Vanguard Energy and Cuban agencies to deliver 250,000 barrels of gasoline and diesel fuel intended exclusively for Cuba’s private sector, small and medium-sized enterprises and humanitarian organizations. The arrangement included a five-year lease of state-owned storage tanks operated by CUPET. Under the proposal, Vanguard would retain ownership of the fuel to prevent it from being diverted to the Cuban government and would operate outside the island’s banking system. However, within hours of the agreement becoming public, the U.S. State Department halted the shipment, saying the company did not possess a specific license authorizing the transaction and reaffirming that the Trump administration’s sanctions against Cuba remain fully in force.
Despite the tightening U.S. restrictions, Díaz-Canel rejected suggestions that the reforms were a response to pressure from Washington, describing them as a necessary internal restructuring effort. The economic plan centers on decentralization and greater openness to investment. Municipal governments and state-owned companies will receive expanded authority over imports, exports and foreign currency management in an effort to reduce bureaucratic obstacles. The government also plans to ease restrictions on private small and medium-sized businesses, open financial investment opportunities for Cubans living abroad and allow foreign companies to lease agricultural land to boost food production. To support the reforms, Havana plans a significant reduction of the central bureaucracy, cutting the number of government ministries to 20 from 27 through mergers and eliminations.
Díaz-Canel said Cuba must move toward “new models and new actors” capable of making use of existing infrastructure, acknowledging that sectors such as tourism have been hurt by U.S. sanctions. “We cannot focus only on the large international hotel chains when many of them, because of pressure from the United States government, have left the country,” he said. “We are developing real estate and tourism projects with new models and other actors that have not traditionally participated in these sectors.”
On energy policy, Díaz-Canel said Cuba would continue shifting toward solar power and renewable energy sources. “We are going to eliminate, as much as possible, the restrictions that exist on vehicle imports,” he said. “We will continue prioritizing, through tariffs and pricing policies, the importation of electric vehicles powered by solar energy.”
Recent U.S. measures against Cuba have significantly tightened the decades-long embargo through Executive Order 14404 and additional restrictions targeting the energy sector, including CUPET. The sanctions also affect senior government officials, their relatives and military-linked entities. Washington says the measures are intended to cut off revenue to the Cuban government, encourage political change and punish human rights abuses. Cuban authorities argue that the restrictions have worsened an already severe economic crisis marked by chronic shortages and power outages that have lasted more than 48 hours in some parts of the island. International organizations, including the United Nations, have warned about the humanitarian impact on the civilian population.