While concerns are being raised about how the U.S. ouster of Venezuelan leader Nicolas Maduro could impact Canada’s oil markets, industry experts say the effect won’t be immediate.
U.S. President Donald Trump has signalled interest in transforming Venezuela’s oil sector, but on Sunday, Secretary of State Marco Rubio said the U.S. won’t govern the South American country and will continue its “oil quarantine,” bringing questions about what’s next for the sector.
“In terms of coming back permanently, I see that will be extremely difficult,” said Luis Virla, who used to work for Venezuela’s petrochemical industry. “It will take many years and a lot of money to bring back the energy infrastructure and energy sector to the way it was, even in the ’90s.”
Despite the work needed to bring Venezuela’s sector up to speed, news of the U.S. operation in Venezuela weighed on Canadian energy stocks Monday.
Cenovus Energy Inc. and Canadian Natural Resources Ltd. were each down about five per cent and Suncor Energy Inc. dropped 1.4 per cent. Enbridge Inc., which operates a vast cross-border oil pipeline network that it plans to expand, and South Bow Corp., whose Keystone system ships crude to the U.S., each fell around three per cent.
Venezuela produced about 1.1 million barrels of oil per day in November 2025 and exported 950,000 barrels, but U.S. measures, including its blockade, knocked shipments down to approximately 500,000 barrels daily in December, according to preliminary figures based on ship movements.
Shaz Merwat, energy policy lead at RBC Thought Leadership, said in an interview Monday that Canadian oil should not have difficulty “finding a home” in the U.S., noting that about four million to 4.2 million barrels a day are exported to the U.S. by pipelines.
The majority of that is sent to the U.S. Midwest — approximately 2.8 million to 2.9 million barrels per day.
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“That’s not a refining region where Venezuelan crude ends up,” Merwat said. “Venezuela’s crude, essentially, all of it goes 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 the refiners in the Gulf that were designed for Venezuelan oil and had significantly switched to Canadian oil for refinement, would they be looking at or prioritizing having back Venezuelan oil,” said Virla, who now works as a professor at the University of Calgary.
Merwat added that price could be a factor more than where in the U.S. oil could be sent.
“Where there is concern obviously is a function of price because now U.S. refineries have more availability, more options as to where they source their crude and it gives them increasing bargaining power and then that can widen the differential in Canada on our heavy oil,” he said.
Heather Exner-Pirot, director of energy and natural resources and environment at the MacDonald-Laurier Institute, said she’s not heavily concerned about competition for Canadian oil from Venezuela at this time, because competition already exists from the U.S., Brazil, Mexico and OPEC, among others.
The best thing Canada can do is continue what it’s doing, according to Exner-Pirot.
“At the end of the day, the only people that buy heavy oil is refineries that accept heavy oil and most of those are in the United States and in Asia,” she said. “If we’re going to diversify our exports, it’s going to be to Asian refineries that do want our heavy oil.”
It’s likely to take years for Venezuela to return to past production levels, Virla said, while Canada has an opportunity.
“There’s very little power that Canada as a supply economy or Alberta’s supply economy can have, depending on one market, basically,” he said. “I would encourage the Canadian industry to actually be bold and say, ‘OK, how do we also focus on diversifying our client inventory, how do we include other types of energy products to make ourselves less exposed to these drastic changes in the market?’”
In a statement to Global News, Alberta Premier Danielle Smith said the events in Venezuela “emphasize” the need to speed up pipeline production to diversify oil export markets.
“Alberta supports building pipelines in all directions to get our product to market and we look forward to continuing to work with provincial and federal partners to advance these projects,” Smith wrote.
The Canadian Association of Petroleum Producers (CAPP) said in a statement the situation in Venezuela reinforces the need for diversification.
“What these events underscore is that in an increasingly unpredictable world, Canada must continue its drive to be a more competitive place for energy investment to strengthen our economic foundation and position ourselves to thrive through market cycles and global volatility,” said Lisa Baiton, president and CEO of CAPP.
— with files from Reuters, The Canadian Press and The Associated Press
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