A potential change in leadership in Venezuela could offer the country an opportunity to reclaim its position as a significant oil producer. However, this development could also present a challenge to Canada’s thriving oil industry, which has been experiencing robust growth despite low commodity prices in recent times.
Canadian energy companies have exceeded expectations over the past year, with production steadily increasing as oilsands operations expand. Nonetheless, the removal of Nicolás Maduro from power in Venezuela, orchestrated by the U.S., led to a sharp decline in Canadian energy stocks. There are speculations that Venezuela’s oil sector could see a revival with U.S. involvement, potentially impacting the Canadian industry in the long term.
Rebuilding Venezuela’s oil industry will require substantial investments from U.S. firms, a task that could be daunting given the significant capital needed to address the country’s oil infrastructure challenges. Previous experiences of U.S. companies investing in Venezuela have not always been successful, adding a layer of complexity to the situation.
Venezuela boasts the largest oil reserves globally and primarily produces heavy oil, similar to Western Canada’s output. In the short term, an increase in Venezuelan oil exports to the U.S. Gulf Coast could occur. However, if U.S. companies expand operations in Venezuela as desired by President Donald Trump, the country has the potential to significantly boost its heavy oil production in the long run.
While Canada currently produces nearly five million barrels of oil per day, with a majority exported to the U.S., a resurgence in Venezuela’s oil industry could pose a future risk to Alberta’s oil-dependent economy. However, this scenario is likely years away, as significant investments and stable governance are essential for Venezuela to realize its oil production potential.
The U.S. government is urging American oil executives to reinvest in Venezuela, but uncertainties surrounding the political climate may deter substantial capital commitments. Despite the competitive nature of Venezuelan oil for U.S. Gulf Coast refiners, Canada’s strong foothold in supplying oil to Midwest refineries remains secure due to its well-established pipeline network.
Furthermore, the possibility of Venezuela redirecting its oil supply from China to the U.S. Gulf Coast could open up opportunities for Canada to increase its crude oil exports to Asia. The expansion of the Trans Mountain pipeline has already facilitated Canada’s efforts to boost oil exports to the Asian market.
While the implications of the situation in Venezuela may not have an immediate impact on the Canadian oil industry, it underscores the volatile nature of the sector. Despite record oil production levels in Canada, ongoing political unrest globally continues to influence oil prices, shaping the industry landscape in 2026 and beyond.
