For the first time, Algeria’s Saharan Blend light sweet crude is heading to Cuba to help balance the low supplies being delivered by Venezuela whose productions have been affected by the low oil prices regime.

According to sources, State-owned oil company, Sonatrach, intends to ship about 515,000 barrels of crude to Cuba in October, to complement Venezuelan crude supplies, which dropped by 40% in H1 of 2016.The sources added that the cargo if shipped would be Algeria’s first crude delivery to Cuba, and there may be another for November or December loading.

Cuba and Algeria have sustained a close relationship in recent years as Cuba every year imports about $200 million to $300 million of oil products from the latter, including naphtha. But Cuba depends almost entirely on Venezuela, for its crude supplies through a 15-year-old assistance programme that the capital has been making efforts to maintain amidst power cuts, lack of investment and payment delays which has reduced its oil output.

Venezuelan state oil company PDVSA would be mediating the Algerian crude sale to Cuba's Cienfuegos refinery where it holds a 49% interest.PDVSA has been mandated to discover ways to increase supplies to Cuba as the capacity of its medium grades decreases and Cuban refineries cannot process a larger volume of Venezuelan heavy and extra-heavy grades.

Last year, the state oil company shipped 1.64 million barrels of Angola's Girassol and Russia's Urals crudes to Cuba and a year before, PDVSA organized a deal of the same sort with Sonatrach to import about 2 million barrels of Saharan Blend.The deal was paid for by Reliance Industries through a triangulation deal that included deliveries of Venezuelan heavy oil to India, Reuters reports.

Anita Fatunji