Energy analysts argue that the Trump administration’s strategy to enhance Venezuela’s oil sector could give the U.S. an upper hand against Canada while simultaneously undermining China’s position. Conservative political figures, notably Canada’s Conservative Opposition Leader, are urging Prime Minister Mark Carney to greenlight a new pipeline along the Pacific Coast to enhance the country’s oil exports. This request arises from worries that increased U.S. involvement in the Venezuelan oil market could significantly affect Canadian oil’s competitiveness, especially since Venezuela is a major supplier for the U.S., Canada’s largest oil client. There’s a concern that more oil flowing in from Venezuela could push Canada to lower prices to remain viable.
Experts further noted that U.S. engagement in Venezuela’s oil might weaken China. Steve Milloy, who has worked with the fossil fuel industry, conveyed to Fox News Digital that Canadian oil could be at risk as this development could spell trouble for all petro-states—including Canada itself.
The term “petrostate” refers to nations whose economies significantly revolve around oil and gas revenues.
Milloy warned that if Canada is forced to reduce oil prices, it would adversely impact its revenue-generating potential. He, however, mentioned that it’s still early to gauge the full effects of U.S. intervention in Venezuela’s oil market.
In a letter to Carney, Pierre Poièvre expressed that Canada must reduce its reliance on the U.S. oil market, highlighting that millions of barrels could be transported to international markets. He stressed that Venezuela’s return to the U.S. market signifies an urgency to act, arguing that Canada’s sovereignty hinges on protecting its oil market from external pressures.
Meanwhile, Alberta’s Premier, Daniel Smith, has asserted that the recent dynamics regarding Venezuela underscore the necessity for pipeline projects to diversify oil exports to new markets, including a proposed Indigenous-owned asphalt pipeline to British Columbia’s northwest coast aimed at Asian markets.
In response, Carney maintained confidence in the competitiveness of Canadian oil, citing its low risk and cost stemming from stable governance, stating that this will position Canadian oil favorably over the medium to long term. He acknowledged the prospect of escalating prosperity for Venezuela but emphasized that Canadian oil’s competitiveness remains intact amidst these shifts.
Milloy contended that President Trump’s initiative in Venezuela does not only influence Canada but also helps amplify U.S. leverage over China. He noted that much of Venezuela’s oil had previously flowed to China, which, facing its own oil shortages, has been motivated to pursue alternative energy sources.
Tim Stewart, president of the American Oil and Gas Association, shared similar viewpoints, suggesting that this strategy could place a significant chunk of global oil production under U.S. influence, potentially reshaping global geopolitics in favor of America without immediate spikes in oil prices.
Stewart emphasized the critical nature of Venezuelan oil shipments to China, asserting that the U.S. stance sends a clear message to China while highlighting the repercussions for Venezuela’s economy, given its heavy reliance on oil production.
