U.S. Operation in Venezuela: Impact on Canadian Oil Industry Explored
Concerns regarding the potential impact of U.S. operations in Venezuela on Canada’s oil sector have emerged. Industry experts indicate that significant effects will not occur immediately. U.S. President Donald Trump has shown interest in reforming Venezuela’s oil industry. However, Secretary of State Marco Rubio confirmed that the U.S. will not take control of Venezuela, maintaining its oil embargo.
Venezuela’s Oil Production and Exports
Historically, Venezuela played a significant role in the global oil market, producing approximately 1.1 million barrels per day in November 2025. Exports were around 950,000 barrels daily before U.S. sanctions affected operations. By December of that year, shipments dwindled to about 500,000 barrels per day due to these restrictions.
Impacts on Canadian Energy Stocks
- Cenovus Energy Inc. – down 5%
- Canadian Natural Resources Ltd. – down 5%
- Suncor Energy Inc. – down 1.4%
- Enbridge Inc. – down 3%
- South Bow Corp. – down 3%
The news surrounding U.S. operations in Venezuela negatively affected Canadian energy stocks on the stated day.
Export Dynamics and Pricing Concerns
RBC’s energy policy lead, Shaz Merwat, highlighted that Canadian oil remains competitive in the U.S. market. Current exports to the U.S. are approximately 4 million to 4.2 million barrels per day. The majority, about 2.8 to 2.9 million barrels, head to the U.S. Midwest.
Merwat emphasized that refineries in the U.S. Gulf Coast, which historically processed Venezuelan crude, have shifted to Canadian oil. This competition raises new concerns about pricing as U.S. refineries gain additional sourcing options.
Future of Canada’s Oil Industry
Experts like Heather Exner-Pirot, director of energy at the MacDonald-Laurier Institute, believe that current competition from Venezuela does not pose a significant threat. Canada’s diversification efforts are crucial as it faces competition from the U.S., Brazil, Mexico, and OPEC nations.
Virla, a former member of the Venezuelan petrochemical industry, noted the lengthy path to restore Venezuela’s oil production. He urged Canadian producers to proactively diversify their markets and energy products.
Government and Industry Responses
Alberta Premier Danielle Smith emphasized the necessity for expedited pipeline construction to open new export opportunities. Canada’s federal Energy Minister Tim Hodgson stated that it is premature to evaluate the long-term impacts of these geopolitical developments.
The Canadian Association of Petroleum Producers (CAPP) echoed these sentiments, stressing the importance of creating a competitive environment for energy investments. CAPP President Lisa Baiton reaffirmed the need for Canada to enhance its status in the volatile global energy market.
