Whereas issues are being raised about how the U.S. ouster of Venezuelan chief Nicolas Maduro might affect Canada’s oil markets, business consultants say the impact received’t be instant.
U.S. President Donald Trump has signalled curiosity in remodeling Venezuela’s oil sector, however on Sunday, Secretary of State Marco Rubio stated the U.S. received’t govern the South American nation and can proceed its “oil quarantine,” bringing questions on what’s subsequent for the sector.
“When it comes to coming again completely, I see that can be extraordinarily tough,” stated Luis Virla, who used to work for Venezuela’s petrochemical business. “It is going to take a few years and some huge cash to deliver again the vitality infrastructure and vitality sector to the way in which it was, even within the ’90s.”
Regardless of the work wanted to deliver Venezuela’s sector up to the mark, information of the U.S. operation in Venezuela weighed on Canadian vitality shares Monday.
Cenovus Power Inc. and Canadian Pure Sources Ltd. had been every down about 5 per cent and Suncor Power Inc. dropped 1.4 per cent. Enbridge Inc., which operates an unlimited cross-border oil pipeline community that it plans to increase, and South Bow Corp., whose Keystone system ships crude to the U.S., every fell round three per cent.
Venezuela produced about 1.1 million barrels of oil per day in November 2025 and exported 950,000 barrels, however U.S. measures, together with its blockade, knocked shipments right down to roughly 500,000 barrels every day in December, based on preliminary figures based mostly on ship actions.
Bodily exports to the U.S. not as massive an affect as worth hit: RBC
Shaz Merwat, vitality coverage lead at RBC Thought Management, stated in an interview Monday that Canadian oil shouldn’t have problem “discovering a house” within the U.S., noting that about 4 million to 4.2 million barrels a day are exported to the U.S. by pipelines.
The vast majority of that’s despatched to the U.S. Midwest — roughly 2.8 million to 2.9 million barrels per day.
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“That’s not a refining area the place Venezuelan crude finally ends up,” Merwat stated. “Venezuela’s crude, primarily, all of it goes to the U.S. Gulf Coast.”
The U.S. Gulf Coast and West Coast every obtain about 400,000 to 500,000 per day from Canada.
“There’s quite a lot of consideration across the refiners within the Gulf that had been designed for Venezuelan oil and had considerably switched to Canadian oil for refinement, would they be taking a look at or prioritizing having again Venezuelan oil,” stated Virla, who now works as a professor on the College of Calgary.
Merwat added that worth might be an element greater than the place within the U.S. oil might be despatched.
“The place there may be concern clearly is a operate of worth as a result of now U.S. refineries have extra availability, extra choices as to the place they supply their crude and it provides them rising bargaining energy after which that may widen the differential in Canada on our heavy oil,” he stated.
Canada should proceed diversification
Heather Exner-Pirot, director of vitality and pure sources and setting on the MacDonald-Laurier Institute, stated she’s not closely involved about competitors for Canadian oil from Venezuela right now, as a result of competitors already exists from the U.S., Brazil, Mexico and OPEC, amongst others.
The perfect factor Canada can do is proceed what it’s doing, based on Exner-Pirot.
“On the finish of the day, the one folks that purchase heavy oil is refineries that settle for heavy oil and most of these are in the USA and in Asia,” she stated. “If we’re going to diversify our exports, it’s going to be to Asian refineries that do need our heavy oil.”
It’s prone to take years for Venezuela to return to previous manufacturing ranges, Virla stated, whereas Canada has a possibility.
“There’s little or no energy that Canada as a provide economic system or Alberta’s provide economic system can have, relying on one market, principally,” he stated. “I’d encourage the Canadian business to truly be daring and say, ‘OK, how will we additionally concentrate on diversifying our shopper stock, how will we embrace different kinds of vitality merchandise to make ourselves much less uncovered to those drastic modifications available in the market?’”
In a press release to International Information, Alberta Premier Danielle Smith stated the occasions in Venezuela “emphasize” the necessity to pace up pipeline manufacturing to diversify oil export markets.
“Alberta helps constructing pipelines in all instructions to get our product to market and we look ahead to persevering with to work with provincial and federal companions to advance these tasks,” Smith wrote.
The workplace of federal Power Minister Tim Hodgson stated in an emailed assertion it was “too early to take a position” on potential impacts, however the authorities would proceed its work to “rework our economic system.”
“No matter any potential long-term impacts, our authorities is taking daring motion to remodel our economic system and vitality business into one that’s numerous, unbiased, and resilient to international shocks,” the e-mail reads.
The Canadian Affiliation of Petroleum Producers (CAPP) stated in a press release the state of affairs in Venezuela reinforces the necessity for diversification.
“What these occasions underscore is that in an more and more unpredictable world, Canada should proceed its drive to be a extra aggressive place for vitality funding to strengthen our financial basis and place ourselves to thrive via market cycles and international volatility,” stated Lisa Baiton, president and CEO of CAPP.
— with recordsdata from Reuters, The Canadian Press and The Related Press
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