Category: News article

What does Maduro’s cap­ture mean for Canada?

The sun sets behind an oil well in Venezuela in 2015. The chief concern for Canada is that Venezuelan oil could surge onto the global market, sinking an already weak world oil price at the expense of Canadian oil producers, David Olive writes.

This opinion was written by David Olive and was published in the Toronto Star on January 7, 2026.

On Sat­urday, the U.S. took effect­ive con­trol of the world’s largest oil reserves when it cap­tured then­ Venezuelan pres­id­ent Nicolás Maduro and his wife, Cilia Flores, in Cara­cas and flew them to New York, where Maduro faces nar­co­ter­ror­ism charges.

U.S. Pres­id­ent Don­ald Trump said on Sat­urday that “we will run” Venezuela, at least in the short term.

What are the implic­a­tions for Canada, the world’s fourth­ largest holder of proven oil reserves and fourth ­largest oil pro­du­cer?

The chief con­cern for Canada is that Venezuelan oil, trapped in the ground for dec­ades by internal polit­ical strife and external sanc­tions, could surge onto the global mar­ket, sink­ing an already weak world oil price at the expense of Cana­dian oil pro­du­cers.

Oil and gas pro­duc­tion, one of Canada’s largest indus­trial sec­tors, accounts for more than seven per cent of the Cana­dian eco­nomy. Regime change in Cara­cas could alter Prime Min­is­ter Mark Car­ney’s inten­ded trans­form­a­tion of Canada into an energy super­power.

If U.S. Gulf Coast refiner­ies geared to pro­cessing heavy oil, used in pro­duc­tion of diesel, gas­ol­ine, chem­ic­als and jet fuel, opt for cheaper Venezuelan crude, Canada’s heavy oil pro­du­cers could see a decline in U.S. exports.

More reason, some experts now say, for Canada to pro­ceed with a second West Coast pipeline to tap mar­kets in Asia Pacific and the Indo­Pacific.

The Trump admin­is­tra­tion prom­ises to polit­ic­ally sta­bil­ize Venezuela, a pre­requis­ite to invest­ment required to rebuild the coun­try’s oil industry. But the U.S. record on restor­ing nor­mal­ity to coun­tries it invades is not good, judging from Iraq and Afgh­anistan.

Venezuelan oil pro­duc­tion is a mod­est 1 mil­lion bar­rels per day (bbl/day), a frac­tion of Canada’s out­put of almost 5.8 mil­lion bbl/ day. Venezuela accounts for less than one per cent of world oil pro­duc­tion. Canada accounts for about six per cent, trail­ing the U.S. (22 per cent), Saudi Ara­bia (11 per cent) and Rus­sia (11 per cent).

But Venezuela pos­sesses colossal proven oil reserves, estim­ated at about 303 bil­lion bar­rels at year­end 2024. Saudi Ara­bia ranks second with 267 bil­lion bar­rels, fol­lowed by Iran (209 bil­lion), Canada (163 bil­lion) and Iraq (145 bil­lion).

Increased amounts of Venezuelan oil will someday get to mar­ket. Assum­ing Venezuela remains in OPEC, it will be pres­sured to align with OPEC’s object­ive of keep­ing prices high by refrain­ing from over­pro­duc­tion.

But that dis­cip­line can’t be coun­ted on. Mem­bers of OPEC have routinely cheated on their pro­duc­tion quotas. With $160 bil­lion (U.S.) in debt to restruc­ture, Venezuela will be temp­ted to over­pro­duce once it can, driv­ing down the world price for the Cana­dian oilp­atch.

Experts think full Venezuelan pro­duc­tion is at least a dec­ade away, but a doub­ling of cur­rent pro­duc­tion is pos­sible within five or six years. That assumes bil­lions of dol­lars are made avail­able to rebuild Venezuela’s severely degraded oil infra­struc­ture.

In the mean­time, the huge over­hang on the global oil mar­ket of poten­tial Venezuelan oil pro­duc­tion will exert down­ward pres­sure on the world oil price if Venezuela shows signs of regain­ing its pre­vi­ous1970s peak pro­duc­tion of nearly four mil­lion bbl/day — about four times its cur­rent pro­duc­tion.

Cana­dian com­pan­ies might even­tu­ally play a prom­in­ent role in restor­ing Venezuelan oil pro­duc­tion.

Trump said Sat­urday he wants U.S. com­pan­ies to take con­trol of the Venezuelan oil industry. That would seem to give the inside track on reap­ing Venezuela’s oil wealth to U.S. oil majors.

They include Chev­ron, which already oper­ates in Venezuela under a spe­cial licence from the U.S., and Amer­ican oil majors Cono­co­Phil­lips and Exxon Mobil, which quit Venezuela in the mid­2000s after then­pres­id­ent Hugo Chávez nation­al­ized their assets.

But the world cap­ital of heavy oil expert­ise is Cal­gary. Canada mostly pro­duces heavy oil, and it has been devel­op­ing heavy oil extrac­tion and pro­cessing meth­ods for more than 70 years.

Cana­dian access to the world’s largest oil reserves could fig­ure into Canada­U.S. trade talks. Regard­less, Cana­dian oil majors can be expec­ted to someday par­ti­cip­ate in one of the planet’s biggest oil plays.

And that will fig­ure into the pri­cing of stocks in Cana­dian oil majors Sun­cor Energy, Cana­dian Nat­ural Resources, Cenovus Energy and Imper­ial Oil (an affil­i­ate of Exxon Mobil).

The return of U.S. gun­boat dip­lomacy in the Amer­icas must be a con­cern for Canada after Trump’s declar­a­tion Sat­urday that the U.S. “will dom­in­ate the West­ern Hemi­sphere.”

But the greater imme­di­ate worry is the pro­spect of hos­til­it­ies between the U.S. and China, which is heav­ily inves­ted in Venezuelan power util­it­ies, tele­coms and other assets. Most of Venezuela’s oil is sold to China, which is at risk of being cut off by a Venezuela run by the Trump admin­is­tra­tion.

The U.S. and China will be uneasy co­inhab­it­ants of a coun­try in the U.S.’s sphere of influ­ence.

As if the world needed more trouble spots, Canada has a new one close at hand if the U.S. and China can’t reach a peace­ful entente in this corner of their com­pet­ing empires.

Lacklustre oil prices likely this year

Fore­casts expect Alberta nat­ural gas to gain steam as more Cana­dian ship­ments head for Asia

This article was written by Lauren Krugel and was published in the Toronto Star on January 7, 2026.

A pair of energy fore­casts released Tues­day see lacklustre crude oil prices con­tinu­ing this year amid a global sup­ply glut and nat­ural gas prices pick­ing up steam as more Cana­dian ship­ments make their way to Asia.

Con­sult­ing firm Deloitte expects West Texas Inter­me­di­ate, the key U.S. light oil bench­mark, to aver­age $58 (U.S.) per bar­rel — about where it’s trad­ing at cur­rently.

That’s about 20 per cent lower than it was at this time last year and roughly 12 per cent below the com­mod­ity’s 2025 aver­age.

The Organ­iz­a­tion of the Pet­ro­leum Export­ing Coun­tries has deferred some pro­duc­tion increases, but “we do feel there’s a little more down­ward pres­sure that could come into prices in 2026,” said Deloitte Canada part­ner Andrew Bot­ter­ill.

The fore­cast doesn’t account for the U.S. raid on Venezuela over the week­end in which Pres­id­ent Nicolás Maduro was cap­tured. U.S. Pres­id­ent Don­ald Trump has said he wants Amer­ican energy majors to take con­trol of Venezuela’s oil assets.

The South Amer­ican coun­try has massive oil reserves with a sim­ilar chem­ical makeup to Alberta’s oils­ands crude and refiner­ies on the U.S. Gulf Coast are well suited to handle that type of oil. A lift­ing of U.S. sanc­tions on Venezuelan crude and a ramp up of pro­duc­tion could pose a com­pet­it­ive threat to Cana­dian sup­plies in the Gulf Coast mar­ket.

Bot­ter­ill sees two dif­fer­ent scen­arios poten­tially play­ing out.

“The tur­moil of Venezuela itself may bol­ster some prices in the short term,” he said.

“But on the flip side, we still are in a dra­mat­ic­ally over­sup­plied sys­tem right now. So I don’t think (com­pan­ies) will have a lot of short­term effects, but it’s cer­tainly something that Cana­dian pro­du­cers espe­cially will be look­ing at into the mid­ and long­term to under­stand some of their invest­ments.”

Ana­lysts at ATB Cap­ital Mar­kets, mean­while, are expect­ing a WTI price of $60 a bar­rel this year. Global over­sup­ply should peak in the first quarter of this year, gradu­ally improv­ing to a much tighter mar­ket in 2027 and 2028 as U.S. shale pro­du­cers burn through their top­per­form­ing wells.

That should bode well for Cana­dian pro­du­cers with long­life, qual­ity assets.

With the star­tup of the Trans Moun­tain pipeline expan­sion to the West Coast in 2024, the price gap between heavy oils­ands crude and WTI has “struc­tur­ally evolved,” as the abil­ity to sell the resource in Asia has meant bet­ter returns for Alberta pro­du­cers, the report said.

“Egress capa­city out of the (West­ern Cana­dian Sed­i­ment­ary Basin) is not expec­ted to be an issue over the next few years,” the ATB ana­lysts wrote.

For nat­ural gas, ATB is expect­ing Alberta prices to strengthen to $3.30 per mmBTU this year from roughly $1.70 last year thanks in large part to the ongo­ing ramp up of the LNG Canada export ter­minal in Kitimat, B.C. The first car­goes left the plant last sum­mer for Asia.

Deloitte expects nat­ural gas prices in Alberta to rise to $2.95 per mmBTU this year.

Bot­ter­ill said demand from energy­ hungry arti­fi­cial intel­li­gence data centres isn’t being reflec­ted in pri­cing yet, but it’s something he’s watch­ing closely.

“It’s a good news story for nat­ural gas as a product, and there’s def­in­itely going to be more demand.”

Car­ney says Cana­dian oil will remain com­pet­it­ive

This article was written by Sarah Ritchie and David Baxter, and was published in the Toronto Star on January 7, 2026.

Prime Min­is­ter Mark Car­ney said his gov­ern­ment is work­ing to expand access to oil mar­kets in Asia now that Canada faces the pro­spect of Venezuelan oil dis­pla­cing Cana­dian product in the Amer­ican mar­ket. His remarks came after Con­ser­vat­ive Leader Pierre Poil­ievre urged Car­ney to “imme­di­ately approve a pipeline to the Pacific Coast” in a let­ter shared on social media Tues­day.

In Paris for talks on Ukraine Tues­day, Car­ney was asked if U.S. Pres­id­ent Don­ald Trump’s push to take con­trol of Venezuela’s oil industry height­ens the need for a pipeline to B.C.’s north­w­est coast.

“We wel­come the pro­spects of greater prosper­ity in Venezuela. But we also see the com­pet­it­ive­ness of Cana­dian oil,” Car­ney said.

“And in that con­text, a pipeline and exports to Asia, we’ve got com­pet­it­ive product, and we’d be diver­si­fy­ing our mar­kets, and that’s one of the reas­ons why we signed the com­pre­hens­ive MOU with Alberta. So we’d be work­ing toward that.”

Trump has said he plans to take con­trol of the coun­try’s oil industry and encour­age Amer­ican com­pan­ies to revital­ize the sec­tor.

Poil­ievre wrote in his let­ter to Car­ney this move by U.S. has “altered the global energy land­scape.”

He wrote Canada was right to refuse to recog­nize an “ille­git­im­ate regime” and said he sup­ports the right of the Venezuelan people to choose their own future.

He warned Venezuela’s heavy crude pro­duc­tion “could rap­idly rebound to his­toric levels,” put­ting it in dir­ect com­pet­i­tion with Canada for space in U.S. refiner­ies that spe­cial­ize in heavy crude. “Every bar­rel the United States sources from Venezuela could mean one less bar­rel these refiner­ies would buy from Canada. We there­fore need new mar­kets to sell to, and we need them quickly,” he wrote.

Venezuela will send 30 to 50 mil­lion bar­rels of oil to United States, Trump says

Trump claims Venezuela will provide 30 mil­lion to 50 mil­lion bar­rels

A woman waves a Venezuelan flag during a rally in Caracas on Tuesday. Officials said at least 24 Venezuelan security officers and 32 Cuban military and police were killed in the U.S. operation to capture Nicolás Maduro early Saturday.

This article was written by the Associated Press and was published in the Toronto Star on January 7, 2026.

U.S. Pres­id­ent Don­ald Trump said Tues­day that Venezuela would be provid­ing 30 mil­lion to 50 mil­lion bar­rels of oil to the U.S., and he pledged to use pro­ceeds from the sale of this oil “to bene­fit the people” of both coun­tries.

The White House is organ­iz­ing a meet­ing Fri­day with U.S. oil com­pany exec­ut­ives to dis­cuss Venezuela, which the Trump admin­is­tra­tion has been pres­sur­ing to open its vast­but­strug­gling oil industry more widely to Amer­ican invest­ment and know­how. Rep­res­ent­at­ives of Exxon, Chev­ron and Cono­co­Phil­lips are expec­ted to attend the White House meet­ing, accord­ing to a per­son famil­iar with the mat­ter who reques­ted anonym­ity.

Earlier Tues­day, offi­cials in Cara­cas announced at least 24 Venezuelan secur­ity officers were killed in the dead­of­night U.S. mil­it­ary oper­a­tion to cap­ture Nicolás Maduro and spirit him to the United States to face drug charges.

And the coun­try’s act­ing pres­id­ent, Delcy Rodríguez, pushed back on Trump, who earlier this week warned she’d face an out­come worse than Maduro’s if she does not “do what’s right” and over­haul Venezuela into a coun­try that aligns with U.S. interests, includ­ing by grant­ing access to Amer­ican energy com­pan­ies.

Venezuela’s attor­ney gen­eral, Tarek Wil­liam Saab, said over­all “dozens” of officers and civil­ians were killed in the strike in Cara­cas and said pro­sec­utors would invest­ig­ate the deaths in what he described as a “war crime.” He didn’t spe­cify if the estim­ate was spe­cific­ally refer­ring to Venezuelans.

In addi­tion to the Venezuelan secur­ity offi­cials, Cuba’s gov­ern­ment had pre­vi­ously con­firmed 32 Cuban mil­it­ary and police officers work­ing in Venezuela were killed in the raid. The Cuban gov­ern­ment said the per­son­nel killed belonged to the Revolu­tion­ary Armed Forces and the Min­istry of the Interior, the two main secur­ity agen­cies.

Seven U.S. ser­vice mem­bers were also injured in the raid, accord­ing to the Pentagon. Five have already returned to duty, while two are still recov­er­ing from their injur­ies. The injur­ies included gun­shot wounds and shrapnel injur­ies, accord­ing to a U.S. offi­cial who spoke on the con­di­tion of anonym­ity.

With oil trad­ing at roughly $56 (U.S.) a bar­rel, the trans­ac­tion Trump announced late Tues­day could be worth as much as $2.8 bil­lion. The U.S. goes through an aver­age of roughly 20 mil­lion bar­rels a day of oil and related products, so Venezuela’s trans­fer would be the equi­val­ent of as much as two and a half days of sup­ply, accord­ing to the U.S. Energy Inform­a­tion Admin­is­tra­tion.

Des­pite Venezuela hav­ing the world’s largest proven crude oil reserves, it only pro­duces on aver­age about one mil­lion bar­rels day, sig­ni­fic­antly below the U.S. aver­age daily pro­duc­tion of 13.9 mil­lion bar­rels a day dur­ing Octo­ber.

Colom­bia’s For­eign Affairs Min­is­ter Rosa Vil­lavi­cen­cio said Tues­day she’ll meet with the U.S. Embassy’s charge d’affaires in Bogota to present him with a formal com­plaint over the recent threats issued by the United States. On Sunday, Trump said he wasn’t rul­ing out an attack on Colom­bia.

Trump’s opportunistic oil grab in Venezuela revives ‘petrodollar’ debate

This opinion was written by Jamie McGeever and was published in the Globe & Mail on January 7, 2026.

There were likely many motives behind America’s capture and arrest of Venezuelan President Nicolás Maduro on Saturday, but one little-discussed factor could be the White House’s concerns about the waning global prominence of the “petrodollar.”

Venezuela’s oil output is currently modest at barely one million barrels a day, but its reported reserves of around 300 billion barrels – 17 per cent of the global stock – are the world’s largest.

President Donald Trump has made it clear that the U.S. is interested in tapping this enormous potential, stating that he plans to have U.S. energy majors revitalize the Latin American country’s flailing oil industry.

Keeping all this future production within the U.S. orbit could affect more than just energy markets, however, as it would create a lot more petrodollars – a tool that has long helped the U.S. maintain its dominance in the global financial system.

The term “petrodollar” was coined in the mid-1970s when the U.S. and Saudi Arabia agreed that global oil sales would be denominated in dollars, creating a new source of demand for the greenback and cementing U.S. strategic, economic, and political power.

The period between 2002 and mid-2008 – when oil almost reached US$150 a barrel – potentially marked the peak of the petrodollar’s powers.

At that time, the U.S. was the world’s largest importer of crude, enabling oil-producing countries to amass huge trade surpluses, much of which was recycled back into the vast U.S. Treasury market. This put downward pressure on U.S. and therefore, global, bond yields and interest rates.

Fast forward to 2026, and the environment looks very different. Thanks to the shale oil revolution, the U.S. is now the world’s largest oil producer and has been a net exporter since 2021.

Meanwhile, many producer nations like Saudi Arabia now use their oil-driven trade surpluses to plug their own widening domestic budget deficits.

Moreover, the rise of China’s economic power and new geopolitical rifts have reduced the percentage of the global oil trade denominated in dollars. There are no official figures, but it is estimated that as much as 20 per cent of the world’s crude trade is now priced in currencies other than the dollar, such as the euro or Chinese yuan.

While the White House may want the dollar’s exchange rate to be lower, it is keen to maintain its dominance in global markets.

The link between the dollar and oil has also shifted.

Analysts at JP Morgan estimate that during the 2005-2013 period, a 1-per-cent appreciation of the U.S. trade-weighted dollar reduced the price of Brent crude by about 3 per cent. In the 2014-2022 period, a 1-per-cent rise in the dollar reduced the price of Brent by just 0.2 per cent. And last year, the dollar and oil both fell, rather than moving in opposite directions.

So whether one is looking at oil producers’ official holdings of Treasuries or oil revenues as a share of global capital flows, it is clear that the power of the petrodollar is on the decline.

This mirrors the dollar’s slow but steady decline in global status over the past few decades. The greenback’s share of foreign currency reserves is currently the lowest in 25 years, and while it remains the pre-eminent currency of global trade, that position is starting to fray also.

The Trump administration is pushing back, however. While the White House may want the dollar’s exchange rate to be lower, it is keen to maintain its dominance in global markets – and the recent events in Venezuela could be part of this wider effort.

Until Mr. Trump returned to office almost a year ago, there appeared to be little appetite in Washington to push back against the global tide of geopolitically driven diversification away from the dollar.

But the Trump administration has taken a stronger stand. It is promoting dollar-pegged “stablecoins” to strengthen the dollar’s role in digital payments and global finance more broadly. It has also threatened to impose tariffs on countries seeking to develop alternatives to the dollar, most notably the BRICS group of developing nations.

Gaining a degree of control over the world’s largest proven oil reserves could be part of this effort, especially as it involves muscling out China and Russia – the Maduro regime’s allies – in the process.

“The dollar is still the key currency in the oil market, and the U.S. is trying to preserve this,” says Hung Tran, non-resident senior fellow at the Atlantic Council.

Richard Werner, professor of banking and economics at the University of Winchester, agrees that Washington’s actions in Venezuela are likely aimed at bolstering the petrodollar system.

Ultimately though, he believes these extreme actions could be seen as a sign of “desperation” that could accelerate the decline of the petrodollar if BRICS nations and others in the “Global South” baulk at Washington’s use of military force to maintain currency dominance.

That, of course, remains to be seen.

Oil giants pondering returns to Venezuela may find too much risk at hand

This opinion was written by Rita Trichur and was published in the Globe & Mail on January 7, 2026.

A mural features oil pumps and wells in Caracas, Venezuela, on Tuesday. Chevron, which already operates in Venezuela, is reportedly sending more oil ships to the South American country.

Trump’s plan for American energy companies comes with legal, financial and security threats that can’t be ignored

Oh, to be a fly on the wall inside the boardrooms of major American oil companies these days.

As U.S. President Donald Trump expounds on his fever dream of expropriating Venezuelan oil by running the failed petrostate, he is musing about turning over its rotting oil infrastructure to American companies and reimbursing their costs to rebuild it.

Deposed Venezuelan President Nicolás Maduro, meanwhile, said he was a “prisoner of war” after he pleaded not guilty to narco-terrorism and other charges in federal court in New York.

“The oil companies were absolutely aware that we were thinking about doing something,” Mr. Trump told NBC News on Monday. “But we didn’t tell them we were going to do it.”

Mr. Trump would have us believe there’s no reason to worry that U.S. energy companies were caught flat-footed by Mr. Maduro’s capture or the “tremendous amounts of money” required to reconstruct Venezuela’s oil infrastructure.

Chevron, which already operates in Venezuela, is reportedly sending more oil ships to the South American country. But don’t expect these surreal developments to spark a stampede by other U.S. oil giants.

So far, Exxon Mobil and Conoco Phillips appear circumspect about investing in Venezuela, even though Mr. Trump already has the business case figured out for them.

With his central-planning fetish on full display, Mr. Trump told NBC News in that same interview that U.S. oil companies could be “up and running” in Venezuela in under 18 months.

Details, schmetails.

The biggest head trip is yet to come for the U.S. oil industry.

U.S. Energy Secretary Chris Wright and his cabinet colleague, Interior Secretary Doug Burgum, are planning their first formal calls with top executives to ratchet up the pressure on energy companies to return to Venezuela, according to a report in Politico that cited four confidential sources.

With U.S. government debt topping US$38-trillion, who will finance this endeavour? Let’s not kid ourselves, U.S. sanctions against Venezuela remain a serious obstacle for banks.

Perhaps the U.S. oil industry can take a page out of Mr. Maduro’s playbook and transact in cryptocurrency, as the ousted leader is alleged to have done. Stablecoins pegged to the U.S. dollar could prove handy because the Genius Act and the Clarity Act have known loopholes for sanction evasion.

Mr. Trump’s rigorous cost-benefit analysis notwithstanding, the initial market enthusiasm over U.S. oil majors potentially resuming expansion in Venezuela was overblown.

There are staggering legal, financial and security risks for American energy companies that cannot be ignored willy-nilly by Csuite executives and corporate directors.

For instance, Venezuela’s state oil company, Petróleos de Venezuela, S.A., or PDVSA, is subject to U.S. sanctions, and so is company president Héctor Andres Obregón Pérez.

PDVSA is allegedly implicated in drug trafficking, according to the U.S. indictment against Mr. Maduro and other insiders of his regime.

Specifically, Mr. Maduro’s son, Nicolás Ernesto Maduro Guerra, is accused of using a Falcon 900 plane owned by PDVSA to transport “large packages wrapped in tape that the captain understood were drugs” from Venezuela’s Margarita Island, states the U.S. court filing.

Mr. Maduro Guerra, the filing alleges, “was present while the PDVSA plane was loaded and, on one occasion, stated that the plane could go wherever it wanted, including the United States.”

None of the allegations have been tested in court.

Even so, why would any reputable U.S. company pursue a joint venture or assume control of assets from a company so closely associated with the Maduro regime?

Separately, the recent rally in Venezuela’s distressed debt and PDVSA bonds is entirely premature.

Venezuela defaulted on US$60-billion worth of bonds back in 2017. Total liabilities, including interest amassed over those nine years, are unknown. What’s more, the ability of investors to recover value from the debt hinges on increased production.

That may not happen if there is civil strife.

Venezuela’s Interior Minister Diosdado Cabello, who is also named in the U.S. indictment, continues to wield significant power in Venezuela because of his iron-fisted control of paramilitary groups known as the colectivos.

The Miami Herald is reporting that Mr. Cabello, who the U.S. government accuses of taking bribes connected to cocaine trafficking, is mobilizing the colectivos in Caracas.

But perhaps the biggest risk to the White House’s plan for American energy companies to extract more Venezuelan oil is Mr. Trump himself. His mercurial decisionmaking exudes regulatory risk – the kind that jeopardizes costly capital investments.

U.S. oil companies have a long history of navigating unstable political environments and dealing with irrational strongmen. But they’ve never encountered anything like Donald Trump.

Carney calls Canadian oil ‘competitive’ in key shift of energy policy

This article was written by Jeffrey Jones and Emma Graney, and was published in the Globe & Mail on January 7, 2026.

Pumpjacks draw out oil and gas from well heads near Carstairs, Alta., in February. Financial risks in the oil sands, as the Prime Minister suggests, are smaller than in Venezuela.

Prime Minister Mark Carney is trumpeting his support for Canada’s oil producers as they struggle with the uncertainty of a U.S. takeover of Venezuela’s oil industry, saying they should be able to dodge the threat.

Mr. Carney said on Tuesday Canadian producers will be competitive over the medium to long term. The country’s production is low-risk, low-cost and may get more access to global markets should a new pipeline to the West Coast get built, he said.

“And in that context, a pipeline and exports to Asia, we’ve got competitive product, and we’d be diversifying our markets, and that’s one of the reasons why we signed the comprehensive MOU with Alberta. So we’d be working toward that,” Mr. Carney said in Paris.

Mr. Carney has previously pushed for climate action over increasing fossil fuel production, but has been increasingly warming to the industry as trade tensions simmer into a new year and sovereignty threats persist.

Last year, the federal and Alberta governments signed a memorandum of understanding to jointly pursue a new oil pipeline to the B.C. coast from Alberta. A route has yet to be decided for the proposal, and no private-sector proponent has stepped forward to build it.

It also faces opposition from the B.C. government and from First Nations on the province’s northern coast.

Robert Johnston, director of energy and natural resources policy at the University of Calgary’s School of Public Policy, said he was heartened that the Prime Minister made the comments to help calm market fears that resulted in a selloff in Canadian energy shares on Monday.

“I think focusing on the positives of our oil sector, and trying to tackle the challenges and the shortcomings is the right approach. I think in the past we were sort of too stuck on the opposite of that,” Mr. Johnston said.

The potential for increasing Venezuelan exports rattled markets after U.S. forces captured President Nicolás Maduro and his wife in a military raid on Saturday. Mr. Trump asserted that “we’re in charge” of the country and would bring in U.S. oil companies to take over energy infrastructure that has been underfunded and mismanaged for years.

Both countries have massive reserves of heavy crude oil, and Canada’s exports to the U.S. have surged as Venezuela’s have dwindled under sanctions. The prospect of stiffer competition injected new uncertainty into the Canadian oil patch, said Menno Hulshof, analyst at TD Cowen.

It could be several years before Venezuelan output increases meaningfully, given the record of civil unrest that tends to follow regime change globally. Meanwhile, the government in charge will have to develop a fiscal policy and companies will have to amass capital and labour to fix dilapidated infrastructure, he said.

Previously, the outlook for Canadian heavy oil was quite positive, with discounts to West Texas Intermediate benchmark oil, known as differentials, narrower than historical levels with new access to Asian markets via the expanded Trans Mountain pipeline.

“The question now is, can Canada compete on heavy oil on a timeline that is impossible to define?” Mr. Hulshof said.

Financial risks in the oil sands, as the Prime Minister suggests, are smaller than in Venezuela. Canadian projects face high upfront costs but the break-even cost of a barrel is much lower once they get going.

Given substantial geopolitical risks in Venezuela, oil majors would seek a far higher risk-adjusted return than what they expect in the oil sands, Mr. Johnston said.

ATB Financial analyst Carol Kamel wrote that production can continue for decades with minimal depletion once a project is built. She pointed to Canadian Natural Resources’ oil sands mining and upgrading assets, which still hold 43 years of reserve life.

Operators have also achieved major cost efficiencies through the use of autonomous haul trucks, artificial-intelligence inspection robots and better water management, she said.

On Monday, Calgary-based Suncor Energy Inc. said it had met several targets a year ahead of schedule – including reducing the break-even cost of a barrel by US$10. Suncor has also significantly increased production, hitting 860,000 barrels a day in 2025, up 32,000 b/d from 2024. Those figures reflect a broader trend across the sector that has seen record volumes pumped out of the oil sands.

If a rise in Venezuelan production becomes a competitive threat for Canadian oil shipments on the U.S. Gulf Coast, it strengthens the case for a new pipeline to the west, despite the fact that several risks remain, Mr. Hulshof said.

On Tuesday, Alberta Premier Danielle Smith’s United Conservative Party government set up a website to promote a new, multibillion-dollar Northwest Coast oil pipeline, saying the application should be ready to submit to the Major Projects Office by July 1.

Ms. Smith said on social media that the situation in Venezuela only adds to the importance of expediting construction of the project.

However, B.C. Premier David Eby, a staunch opponent to such a project, said the toppling of Mr. Maduro and its potential impact on U.S. oil markets underscores the need to build domestic refining capacity to process Canadian crude.

Mr. Eby, at an unrelated news conference, said he welcomed the departure of Mr. Maduro but said the U.S. intervention is unsettling, “and I think that it underlines the critical work that we need to do as Canadians to deepen our independence, to stand on our own two feet,” he told reporters.

He noted that the Trans Mountain pipeline required a massive public bailout, and there is currently no private investor for a new pipeline.

“I don’t understand why, if we’re talking about massive public investment into supporting Albertans in this fragile global time, we can’t talk about supporting all Canadians with oil and gas products that are made right here at home while we transition,” he said. “And so I hope that that’s where some of the conversation goes following the uncertainty that comes from Venezuela.”

The industry has for decades closed refineries across the country, saying they were unprofitable given the relatively small size of the domestic market.

Mr. Johnston said the best way for Canada to deal with a potential oil-supply shock is to diversify markets. “So from that perspective I think it does bolster the case. It’s not that I think that the U.S. is an unreliable partner or we’ll be flooded by Venezuelan crude. It’s just that, even with the Trans Mountain expansion, we’re still far too dependent on a single market.”