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President Obama meets with Cuban leader Raul Castro

Raoul Castro and Barack Obama shake hands at the Summit of the Americas.
Raoul Castro and Barack Obama shake hands at the Summit of the Americas.
MANDEL NGAN AFP/GETTY

President Obama sat down with Cuban President Raul Castro today, the only time the two leaders have met in person other than a brief handshake at the 2013 memorial service for Nelson Mandela.

According to the Associated Press, the two leaders met and briefly discussed their efforts to restore diplomatic ties.

Although it wasn't an officially organized meeting, the encounter was still a fairly big deal in the context of US-Cuba relations.

It represents progress in the normalization of relations that the US and Cuba began in December, when the two countries announced an historic agreement that would allow for increased US travel and trade with Cuba, in exchange for Cuba releasing certain political prisoners and permitting broader freedoms on things like internet access.

The opening in US-Cuba relations will give US citizens more opportunities to visit Cuba, purchase Cuban goods, and send money to any family members who live there. But it will likely have much more impact on Cuba, which will get access to foreign currency that it desperately needs — especially because its reliance on aid from ally Venezuela looks increasingly risky now that Venezuela is suffering from serious economic and political problems.

Venezuela has long provided Cuba with billions of dollars' worth of aid in the form of subsidized oil. But as Venezuelan political scientist Francisco Toro noted in a recent article for FiveThirtyEight, when the price of oil dropped last year, the value of that aid plummeted along with it. The US-Cuba deal was announced just weeks after OPEC's November 2014 decision to let oil prices fall by keeping production high. Toro suggests that Cuba may be seeking dollars from American tourists and remittances to make up the shortfalls in its aid from Venezuela.

The fall in oil prices also battered Venezuela's oil-dependent economy, raising questions about whether it would be able to continue its support for Cuba at all. "Given the economic disaster in Venezuela today any rational person dependent on Venezuelan financial support would have to be looking at other options," Cynthia Arnson, the director of the Latin American program at the Woodrow Wilson International Center, told the Miami Herald last December.

Even if neither Obama nor Castro acknowledges it, this is the subtext to their historic encounter.