Canadian heavy oil prices are plunging this week following the upheaval in Venezuela over the weekend and the prospect of more Venezuelan oil imports to the United States.
A barrel of heavy oil from Western Canada is now selling at the widest discount compared to benchmark prices in North America since July 2024.
Western Canada Select (WCS) traded for $14.45 a barrel below the value of an oil blend known as West Texas Intermediate (WTI), the North American benchmark.
Heavy oil prices have faced much wider discounts over the last decade, but the widening gap this week comes as the U.S. intervenes in Venezuela, including taking control of tankers and a pledge by the Trump administration to ramp up oil production in the country in 18 months.
On Tuesday, President Donald Trump announced a deal in which Venezuela would provide up to 50 million barrels of oil to the U.S.
Venezuela and Canada mainly produce a similar blend of heavy oil.
The share of Canadian oil exports sent to refineries in the U.S. Gulf Coast is most vulnerable to replacement by Venezuelan oil, according to a recent analysis from the Servus Credit Union. This is about 10 per cent of Canada’s total oil exports, or about 350,000 barrels per day.
