As Cuba grapples with a significant oil crisis following U.S. sanctions, the impact is being felt acutely by Sherritt International Inc., a Toronto-based mining and power production firm. The company, which has maintained operations in Cuba for over 30 years, has issued warnings that its nickel and cobalt mining activities could face serious disruptions. The situation escalated after the U.S. captured Venezuelan President Nicolas Maduro, effectively severing Cuba’s main oil supply and plunging the island into a potential humanitarian disaster.
Sherritt’s Vulnerability to Oil Supply Disruptions
In its latest quarterly report, which covered the financial period ending December 31, 2025, Sherritt highlighted the precarious nature of its operations in Cuba. While its Moa mine has previously relied on international suppliers for fuel, the company cautioned that there is no guarantee it will be able to maintain its operational capabilities amid the ongoing crisis. The comprehensive risk disclosure was notably extensive, almost tripling in length from the previous quarter, now exceeding 2,800 words.
During an earnings call, Peter Hancock, the interim CEO of Sherritt, attempted to downplay the immediate risks posed by current geopolitical tensions. He reassured shareholders that operations had not yet been impacted. However, he acknowledged the historical prioritisation of resources by the Cuban government for its mining sector, a relationship that Sherritt has navigated through various challenges over three decades.
The Broader Impact of U.S. Sanctions
The crisis in Cuba intensified after the United States imposed an executive order targeting any nation that sells or supplies oil to the island. This decision came on the heels of the U.S. capturing Maduro, halting Venezuela’s oil shipments that were crucial for Cuba. The resulting fuel shortages have led to widespread blackouts, gasoline rationing, and significant disruptions in medical services, with some hospitals ceasing surgeries altogether due to a lack of resources.
Furthermore, major airlines such as Air Canada, WestJet, and Air Transat have suspended flights to Cuba, citing the country’s warning that it would cease refuelling commercial aircraft.
Ethan Garber, managing director of Imperial Capital in London, voiced concerns over the potential operational challenges facing Sherritt. He noted, “If there’s not enough jet fuel for commercial flights and there are hospitals and other things that are more important than mining cobalt, it’s not rocket science to conclude this is a huge problem for [Sherritt] operationally.”
A Fragile Business Model
Sherritt’s business model is heavily reliant on its Cuban assets, a strategy initiated by former CEO Ian Delaney in the early 1990s. The company once enjoyed a peak market capitalisation of nearly $5 billion during the mid-2000s commodity boom. Now, however, its shares have plummeted, trading at mere pennies, with the market cap shrinking by an astonishing 98% to approximately £109 million.
While Garber acknowledged that Sherritt possesses valuable assets for the long term, he cautioned that the current situation presents significant immediate risks. Despite the turmoil, Sherritt’s share price saw a surprising increase of 38% to 22 cents compared to two months prior, reflecting a possible uptick in interest in the company’s debt.
Speculations on Future Stability
The uncertainty surrounding U.S. policies adds another layer of complexity to Sherritt’s operations. Some analysts speculate that there may be a business-friendly stabilisation effort akin to what was attempted in Venezuela, although the feasibility of such a scenario remains uncertain. “Who knows how the U.S. government would treat that given Sherritt is a Canadian company,” Garber remarked.
Why it Matters
The unfolding crisis in Cuba underscores the precarious nature of international business operations in politically unstable regions. For Sherritt International, the current geopolitical landscape poses not only immediate financial threats but also long-term implications for its survival in the Caribbean market. As the situation develops, the company’s future hangs in the balance, and the broader implications of U.S. foreign policy could reshape the operational landscape for Canadian businesses that have historically invested in Cuba.