Power was restored to Havana and other parts of western Cuba early on Sunday after state electricity provider Unión Eléctrica (UNE) resolved the latest in a series of major grid failures.

Five of Cuba's 15 provinces spent most of Saturday night without electricity following what UNE described as a "partial collapse" of the national grid. The utility said on X that power was gradually being restored.

The outage was the latest sign of Cuba's deepening energy crisis, which resulted in repeated nationwide blackouts and prolonged electricity shortages across the island.

UNE attributed the instability of the grid to fuel shortages, saying limited supplies have made the network more vulnerable to failures and left diesel-powered emergency generators largely unusable.

Since the start of 2026, Cuba has experienced five nationwide blackouts, including three within a 10-day period in July. Since late 2024, the country has suffered 10 nationwide outages.

In recent weeks, parts of Havana have endured blackouts lasting more than 30 hours, while some other areas have gone without electricity for several days.

Residents say the disruptions have become part of daily life.

"We live practically like fireflies here – in the dark all the time. You never know when you'll have power. It's our sad reality," said Julian Gonzalez, a 72-year-old carpenter.

Gonzalez, who lives near Havana's Malecón waterfront, said he preferred spending time outdoors during outages.

"It's better than sitting at home feeling bitter," he said.

The Cuban government blamed U.S. sanctions and restrictions on fuel supplies for worsening the country's energy crisis. Washington, meanwhile, says the shortages reflect decades of economic mismanagement by the Cuban authorities.

Cuba's seven thermal power stations, which form the backbone of the national electricity system, are all more than 40 years old and require extensive repairs.

Relations between Havana and Washington have remained strained this year, while Cuba has grappled with tighter fuel supplies following the loss of heavily discounted Venezuelan oil and only limited deliveries from Russia.

Reforms gather pace

Against that backdrop, the Cuban government has announced a series of market-oriented reforms intended to attract investment and reduce the state's role in the economy.

President Miguel Díaz-Canel has defended the changes, saying Cuba "simply cannot continue on its current course", as the government seeks to address chronic shortages and revive the economy.

Last week, Havana said it would allow private companies to operate in sectors including electricity generation, petrol stations, waste collection and pharmacies as part of broader efforts to ease the country's economic crisis.

Lessons from Iraq

History suggests that prolonged sanctions can contribute to economic hardship and outward migration, although they do not necessarily lead to political change. Iraq is often cited as an example. After Baghdad's invasion of Kuwait in 1990, the United Nations, with strong backing from the U.S., imposed sweeping sanctions that sharply curtailed Iraq's oil exports, then the source of about 95% of the country's foreign currency earnings. The sanctions were accompanied by severe shortages of food, medicine and other essential goods as the economy contracted. Saddam Hussein nevertheless remained in power until the U.S.-led invasion in 2003. By that point, the UN refugee agency estimated that around one million Iraqis were living as refugees abroad, although conflict and political repression also contributed significantly to their displacement.

Cuba's economy is structured differently. Unlike Iraq, it cannot rely on large-scale oil exports to earn foreign currency. Instead, it imports much of the fuel it consumes and depends on tourism, remittances and service exports for hard currency. Economists say that leaves the country particularly exposed to prolonged restrictions on trade and finance, while helping explain Havana's decision to open sectors to private investment in an effort to attract capital and improve basic services.

China's limited lifeline

China has become Cuba's most significant external backer, although its support remains well below the level of Soviet assistance during the Cold War. Beijing has approved a US $80 million emergency aid package, donated tens of thousands of tonnes of rice and financed renewable energy projects intended to help ease the island's chronic power shortages.

On 16 July, Chinese Foreign Ministry spokesman Lin Jian said: "China will continue to firmly support Cuba in safeguarding its national sovereignty and opposing external interference."

Even so, economists say Beijing's assistance is insufficient to address Cuba's wider economic challenges. They argue that no single ally appears willing - or able - to replace the access to capital, investment and trade that broader economic engagement with the United States could provide.

Why it matters to Cayman

For the Cayman Islands, located just over 150 miles south of Cuba, developments on the island are closely watched. Prolonged economic deterioration in Cuba has the potential to influence migration, maritime security and commercial activity across the north-west Caribbean, while any sustained economic recovery could reshape regional tourism, trade and investment over time.

The biggest unknown was whether Cuba's economic reforms can attract enough private capital to ease chronic shortages before another potential wave of outward migration gathers pace.

That leaves Havana attempting to balance greater market liberalisation with continued political control, while its economic prospects remain influenced by both domestic policy decisions and the future direction of US policy towards Cuba.