Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Although concerns are expressed about how America’s ouster from Venezuelan leader Nicolas Maduro could impact Canada’s oil markets, industry experts say the effect won’t be immediate.
US President Donald Trump has expressed interest in transforming Venezuela’s oil sector, but on Sunday Secretary of State Marco Rubio said the US will not govern the South American country and will continue its “oil quarantine”, raising questions about the future of the sector.
“As for coming back permanently, I think it will be extremely difficult,” said Luis Virla, who has worked for Venezuela’s petrochemical industry. “It will take many years and a lot of money to bring energy infrastructure and the energy sector back to what it was, even in the 1990s.”
Despite the work needed to bring the Venezuelan sector back up to speed, news of the US operation in Venezuela weighed on Canadian energy stocks on Monday.
Cenovus Energy Inc. and Canadian Natural Resources Ltd. were each down about 5 percent and Suncor Energy Inc. fell 1.4 percent. Enbridge Inc., which operates a vast network of cross-border oil pipelines that it plans to expand, and South Bow Corp., whose Keystone system ships crude to the United States, each fell about 3 percent.
Venezuela produced about 1.1 million barrels of oil per day in November 2025 and exported 950,000 barrels of it, but U.S. measures, including its blockade, caused shipments to drop to about 500,000 barrels per day in December, according to preliminary figures based on ship movements.
Physical exports to the United States not having as big an impact as rising prices, says RBC
Shaz Merwat, head of energy policy at RBC Thought Leadership, said in an interview Monday that Canadian oil should have no trouble “finding its place” in the United States, noting that about four to 4.2 million barrels per day are exported to the United States through pipelines.
The majority of this quantity is sent to the US Midwest, approximately 2.8 to 2.9 million barrels per day.
Receive national news daily
Get the day’s top news, politics, business and current affairs headlines delivered to your inbox once a day.
“This is not a refining region where Venezuelan crude ends up,” Merwat said. “Venezuela’s crude oil, for the most part, goes entirely to the U.S. Gulf Coast.”
The U.S. Gulf Coast and West Coast each receive about $400,000 to $500,000 per day from Canada.
“There’s a lot of attention around Gulf refiners who were designed for Venezuelan oil and have shifted significantly to Canadian oil for refining, would they consider or prioritize the return of Venezuelan oil,” said Virla, who now works as a professor at the University of Calgary.
Merwat added that price could be a bigger factor than where the oil goes in the United States.
“The concerns are obviously price related, because U.S. refineries now have more availability, more options as to where they source their crude, which gives them increased negotiating power, which can then widen the spread in Canada on our heavy oil,” he said.
Canada must continue its diversification
Heather Exner-Pirot, director of energy, natural resources and environment at the MacDonald-Laurier Institute, said she is not very concerned about competition for Canadian oil from Venezuela because competition already exists from the United States, Brazil, Mexico and OPEC, among others.
The best thing Canada can do is continue what it is doing, according to Exner-Pirot.
“Ultimately, the only people buying heavy oil are the refineries that accept heavy oil and most of them are in the United States and Asia,” she said. “If we want to diversify our exports, it will be to Asian refineries who want our heavy oil.”
It will likely take years for Venezuela to return to previous production levels, Virla said, while Canada has an opportunity.
“Canada, as a supply-side economy, or the supply-side economy of Alberta, can only have very little power, depending on any particular market,” he said. “I would encourage the Canadian industry to be bold and say, ‘OK, how can we also focus on diversifying our customers’ inventory, how can we include other types of energy products to make ourselves less exposed to these drastic market changes?’ »
In a statement to Global News, Alberta Premier Danielle Smith said events in Venezuela “underscore” the need to accelerate pipeline production to diversify oil export markets.
“Alberta supports the construction of pipelines in all directions to get our products to market and we look forward to continuing to work with provincial and federal partners to advance these projects,” Smith wrote.
Federal Energy Minister Tim Hodgson’s office said in an emailed statement that it was “too early to speculate” on potential impacts, but the government would continue its work to “transform our economy.”
“Regardless of potential long-term impacts, our government is taking bold steps to transform our economy and energy industry into one that is diverse, self-reliant and resilient to global shocks,” the email said.
The Canadian Association of Petroleum Producers (CAPP) said in a statement that the situation in Venezuela reinforces the need for diversification.
“These events underscore that, in an increasingly unpredictable world, Canada must continue its efforts to become a more competitive place to invest in the energy sector to strengthen our economic foundation and position ourselves to thrive despite market cycles and global volatility,” said Lisa Baiton, President and CEO of CAPP.
— with files from Reuters, the Canadian Press and the Associated Press
© 2026 Global News, a division of Corus Entertainment Inc.
