Canada’s oil sector shouldn’t panic, stay competitive after Maduro’s seizure: experts

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This article was published 04/01/2026 (274 days ago), so information in it may no longer be current.

EDMONTON – Two political scientists say U.S. President Donald Trump’s interest in transforming Venezuela’s oil-rich sector hasn’t created panic or shaken up Canada’s oil industry.

Heather Exner-Pirot, director of energy, natural resources and environment with the think-tank Macdonald-Laurier Institute, said the U.S. president first needs to get through the global political unrest his Saturday capture of Venezuelan President Nicolás Maduro has created. 

“We’ve always known that Venezuela is a competitor and has those resources, but obviously they’ve been marked by corruption, violence and their assets and their production has atrophied,” she said in a Sunday interview.

“Just because they have oil in the ground doesn’t mean that they can get it out logistically, so I don’t think anyone in this (sector) is immediately panicking.”

And she said Secretary of State Marco Rubio’s backtracking on Trump’s claims on Sunday that he will “run” Venezuela, which made it seem oil will be produced faster, signals that Trump’s threat was just that — a threat.

Rubio said the United States would not take a day-to-day role in governing Venezuela and would enforce an existing “oil quarantine” on the country that was already in place on sanctioned tankers.

The state-owned oil company Petróleos de Venezuela S.A., or PDVSA, has been largely locked out of global oil markets by U.S. sanctions. It sells most of its exports at a steep discount on the black market in China.

“We continue with that quarantine, and we expect to see that there will be changes, not just in the way the oil industry is run for the benefit of the people, but also so that they stop the drug trafficking,” Rubio said Sunday.

Trump hopes to convince American companies to invest in and revitalize Venezuela’s oil industry.

The U.S. has been imposing sanctions on Venezuela since 2005 over concerns about corruption as well as criminal and anti-democratic activities. The first Trump administration expanded the penalties to oil, prompting Maduro’s government to rely on a shadow fleet of falsely flagged tankers to smuggle crude into global supply chains.

Rory Johnston, an oil market analyst who teaches at the University of Toronto and is the founder of market research firm Commodity Context, said it’s unclear whether Trump’s pressure campaign will increase the country’s oil production, and bring prosperity for the Venezuelan people and create competition for Canada’s oil sector.

He said American oil companies want a stable regime in the country before they invest.

“We don’t know a lot about what’s actually coming down the road in Venezuela because Venezuela’s most important sector is oil, but there’s a lot more going on than just oil,” he said.

“If this became more like an insurgency situation, that even further complicates the situation for international oil companies wanting to invest in Venezuela when they could have guys jumping out of the jungle with machine-guns. It’s just a very, very different situation.”

Johnston said if American companies increase oil production in Venezuela, competition between Canadian and Venezuelan barrels will grow.

“Venezuelan oil has a much more natural home in U.S Gulf Coast refineries because it’s right there,” he said.

Exner-Pirot noted that the U.S. Gulf refineries are well optimized for Venezuela’s heavy oil because she said they were built at a time when they were relying on Venezuelan heavy oil in the 1970s. But as political turmoil shrunk Venezuela’s production, Canadian oil began to fill the gap.

However, she said getting replaced at those refineries won’t hurt Canada’s oil sector in a huge way.

“Most Canadian heavy oil goes to the Midwest and it’s sent there directly by a pipe and there’s no really easy way to get Venezuelan oil into the Midwest,” Exner-Pirot said, although it could knock down the cost of Canadian barrels by a few dollars.

Both experts said Canada’s oil sector can be prepared for a hit by maintaining its competitiveness.

“This is a good reminder that Canada is always competing with other sources of oil in global markets. And whether it’s Venezuelans, OPEC or Russian oil, we always have to be competitive,” Exner-Pirot said.

Johnston said Prime Minister Mark Carney and Alberta Premier Danielle Smith have been heading in the right direction in recent months by turning their attention to finding ways to get Canadian oil to new markets, diversifying the sector and ensuring Canada remains competitive.

“It really further bolsters the case for a West Coast pipeline. It’s positive news for Smith’s project, but it’s obviously under very negative circumstances,” he said.

“What’s happened in Venezuela has once again awakened people to the risks we’re talking about and the type of government we are dealing with. And we need to be very serious about foreseeing ourselves against that risk.”

“We should export oil and invest in clean technologies in order to reduce our own dependence on fossil fuels,” he said.

This report by The Canadian Press was first published Jan. 4, 2026.

—With files from The Associated Press