CALGARY — Shares in Canada’s biggest oilsands companies tumbled Monday as U.S. President Donald Trump’s stated plan to ramp up Venezuelan oil production poses a new threat to Canadian heavy crude. 

Companies pared losses after drops in morning trading, but by market close Cenovus Energy stock had fallen more than 4.8 per cent on the Toronto Stock Exchange, settling at $22.89, and Canadian Natural Resources had dropped over 6 per cent to $44.28. Suncor Energy decreased 1.7 per cent to $61.58, while Imperial Oil, majority owned by ExxonMobil, fell by over one per cent.  

A new heavyweight contender? 

The declines came after the U.S. military’s capture of former Venezuelan strongman Nicolás Maduro, who was flown to New York where he now faces drug trafficking charges. Trump has urged U.S. oil companies to reinvigorate Venezuela’s dilapidated oil sector as part of the extraordinary intervention. 

That presents a new threat to Canada’s heavy oil firms. Many of America’s oil refineries—particularly on the U.S. Gulf Coast—are calibrated to process the sort of thicker, more sulphur-intensive oil those companies produce. Demand for it has given Canadian companies largely unrivalled access to U.S. refiners, creating a deep interdependence that has helped Alberta dodge the worst of Trump’s trade war. 

Venezuela, however, is one of the few countries that produces a similarly heavy-grade crude at scale, so a ramp-up in output from the country could increase competition for the prized U.S. refining market.

An ocean of oil

Venezuela has the world’s largest oil deposits, with over 300 billion barrels worth of proven reserves, most of which is embedded in the Orinoco Belt in the country’s northeast. (Canada has the fourth-largest reserves—behind Saudi Arabia and Iran—with around 170 billion barrels.)

Yet Houston-based Chevron is the only U.S. energy company still operating in Venezuela after former president Hugo Chávez seized majority control of all foreign oil and gas operations there in 2007. 

Easier said than done

While Canadian oil stocks flinched on Monday, the drop was materially less than the April 2025 sell-off that resulted from fears that Trump’s tariffs would trigger a recession.

That’s largely because stimulating Venezuela’s moribund oil industry would require immense infrastructure investments. The country’s output collapsed after the 2015 oil crash, falling from almost 2.5 million barrels per day to less than 500,000 in 2020. Today, production remains around one million barrels per day.

While Venezuela could compete for capacity in the U.S. Gulf Coast, Canadian oil exporters dominate U.S. regions insulated from the South American country’s tanker-dependent exports. In the U.S. Midwest, for example, Canada supplied 99.99 per cent of the crude that refineries purchased in October, according to the Energy Information Administration.