Never heard of Cuban oil?

Well, the U.S. Geological Survey reported Cuba’s oil capacity at 4.6 billion barrels – plus 9.8 trillion cubic feet of natural gas.

That’s why U.S. oil companies are completely frustrated at America’s 44-year-old trade embargo: They can’t get close to it.

But Brazil’s state, oil company, Petrobras (NYSE:PBR), has become a rising star in the story of Cuban oil…

To do so, Petrobras has ripped a page right out of China’s playbook for Africa.

Oil-starved China has gone into Africa and supplied everything from guns to hospitals to in order to help secure drilling rights to an estimated 75.4 billion barrels (7% of the world’s total).

Now the Brazilian Foreign Ministry is extending food credits worth as much as $100 million to Cuba. In addition, Brazil and Cuba forged 10 agreements covering oil exploration, biotechnology, pharmaceuticals and agriculture — with officials from Petrobras sitting in the room. The final tally is that Brazil’s aid package to Cuba could easily top $1 billion.

Meanwhile, the Bush administration continues to oppose any relaxation of America’s embargo on Cuba — leaving anyone with a stake in Petrobras richer for it. Less competition translates into higher profits. How much, though, remains to be seen.

Some American politicians are already grandstanding over Cuban oil. Under an existing agreement, the U.S and Cuba share control of the 90 miles of water between the Florida Keys and Castro’s haven. That put’s Cuba’s sovereignty within 45 miles of  the U.S.

The notion of China towing in oil rigs within 90 miles of the U.S. has become politically hot. China drilling right across the line of American waters, at a time when oil has already still remains over $100 per barrel, is embarrassing — to the extent that that even the presidential hopefuls have moved offshore drilling to the front burner of the race.

But amid the turmoil, neutral Brazil has bought itself a top position to get at Cuba’s oil. Its aim is to displace Venezuela as Cuba’s number-one oil ally. If it succeeds, Brazil’s Petrobras could become a viable go-between for delivering some of that crude into the U.S.