{"id":390166,"date":"2026-01-05T19:31:12","date_gmt":"2026-01-05T19:31:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/390166\/"},"modified":"2026-01-05T19:31:12","modified_gmt":"2026-01-05T19:31:12","slug":"suncor-cnq-cenovus-drop-while-u-s-oil-producers-surge-after-venezuela-strike","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/390166\/","title":{"rendered":"Suncor, CNQ, Cenovus drop, while U.S. oil producers surge after Venezuela strike"},"content":{"rendered":"\n

Shares of Canada\u2019s largest oil producers fell on Monday, as markets opened for the first time since the capture of Venezuelan President Nicol\u00e1s Maduro by U.S. forces over the weekend<\/a>. <\/p>\n

America is now set to gain control of the Latin American nation\u2019s battered heavy oil industry. For Canada, the move could put pressure on its oil exports to its southern neighbour.<\/p>\n

Canadian producers Suncor Energy (SU.TO<\/a>)(SU<\/a>), Imperial Oil (IMO.TO<\/a>)(IMO<\/a>), Cenovus Energy (CVE.TO<\/a>)(CVE<\/a>), and Canadian Natural Resources (CNQ.TO<\/a>)(CNQ<\/a>) saw their stocks fall in early trading on Monday. Meanwhile, shares of their American counterparts, like ExxonMobil (XOM<\/a>) and Chevron Corporation (CVX<\/a>), moved in the opposite direction.<\/p>\n

Canada\u2019s iShares S&P\/TSX Capped Energy Index ETF (XEG.TO<\/a>) fell as much as 6.3 per cent on Monday.<\/p>\n

\u201cAmerica\u2019s capture of Venezuelan leader Nicol\u00e1s Maduro on January 3 \u2014 with control over the country\u2019s oil sector a core objective of the military operation \u2014 constitutes a longer-term structural risk for oil prices in general, and Canada\u2019s heavy oil export markets in particular,\u201d RBC Capital Markets analyst Greg Pardy wrote in a note to clients on Sunday night.<\/p>\n

\u201cBut restoring the country\u2019s production back towards the three million [barrel per day] range would require years of annual investment of some $10 billion, anchored by a stable security environment \u2014 both of which are tall orders.\u201d<\/p>\n

Canada\u2019s main heavy oil benchmark, Western Canadian Select (WCS), is priced at a discount to America\u2019s light oil benchmark, known as West Texas Intermediate. The difference reflects Canada\u2019s heavier grade, as well as transportation costs, and other factors. The start of the Trans Mountain Pipeline Expansion Project last summer has shrunk this discount to its tightest range in over a decade.<\/p>\n

Pardy says full sanctions relief for Venezuela could unlock several hundred thousand barrels per day of output over the next year. However, on Sunday, he predicted the discount on Canadian oil will \u201cremain relatively narrow\u201d versus the American benchmark price (CL=F<\/a>).<\/p>\n

\u201cThe kneejerk equity market reaction to the Venezuelan developments may cause Canada\u2019s energy producers to come under pressure amid elevated concerns over the direction of WCS spreads and relative valuation levels,\u201d Pardy wrote.<\/p>\n

\u201cSufficient export pipeline capacity and market diversification should enable WCS geographical spreads to remain relatively narrow.\u201d<\/p>\n

On Sunday, oil market researcher Rory Johnston added context to the notion that revived exports of Venezuelan oil could challenge U.S. demand for Canadian crude. Firstly, he points to the inherent advantage of Canada\u2019s link to U.S. refineries in the Midwest via pipeline.<\/p>\n

\u201cThe vast majority of Canadian crude is consumed in the Midwest, not the U.S. Gulf Coast (where Venezuelan oil will compete if it’s allowed to flow again),\u201d Johnston, founder of the research firm Commodity Context, wrote in a LinkedIn post<\/a>. \u201cCanadian crude accounts for 100 per cent of imported crude in the Midwest\/Mountain regions because there are literally no other pipelines in.\u201d<\/p>\n

Johnston calls the idea of retooling U.S. refineries to handle new foreign grades of oil \u201csilly,\u201d due to the hundreds of billions of dollars that he estimates such a change would cost the industry.<\/p>\n

Then, there\u2019s the massive question of what comes next in Venezuela.<\/p>\n

\u201cNo one is rushing into Venezuela to roll the dice again on whoever replaces Maduro. The long-term resource is there\u2019s no debate, but it’s going to take time for trust to rebuild before people pour in the $50 to $100 billion required to turn the sector around,\u201d Johnston added.<\/p>\n

\u201cEven if this did happen, that’s a problem for all producers, OPEC most of all, and not a specific Canadian negotiations issue.\u201d<\/p>\n

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist<\/a>.<\/p>\n

Download the Yahoo Finance app, available for Apple<\/a> and Android<\/a>.<\/p>\n