A detailed analysis: Behind the situation in Venezuela, who are the potential winners and losers in the global oil industry?

The arrest of Venezuelan President Nicols Maduro has reignited a long-standing issue in the oil market: what changes will occur in the global oil industry if Venezuela's oil industry begins a process of "normalization" under US influence? In his latest speech on Saturday, US President Trump stated that sanctions on Venezuelan oil will continue, but at the same time, the US plans to "deeply engage" in the Venezuelan oil sector, investing billions of dollars to restore severely damaged local infrastructure, especially oil infrastructure, and to begin generating income. The US government is positioning this as a "resource recovery plan," implying that companies will achieve "cost recovery" by directly obtaining crude oil. According to official data, Venezuela has the largest oil reserves in the world, but due to mismanagement, underinvestment, and sanctions, its oil production is currently only a small fraction of its previous capacity. According to the London-based energy research firm, Venezuela holds approximately 17% of global oil reserves - 303 billion barrels, exceeding the actual leader of OPEC, Saudi Arabia. However, Venezuela currently only accounts for 1% of global supply. According to the US Department of Energy, most of Venezuela's oil reserves are heavy oil located in the Orinoco River basin, making its oil production costs high but relatively simple from a technological standpoint. Estimates by Wood Mackenzie show that an investment of $15-20 billion would be required to achieve a daily production increase of 500,000 barrels, highlighting the high capital intensity of heavy oil. However, in the global energy landscape, this may still be a profitable deal - as a restoration of existing oil fields rather than new discoveries, the cost per barrel of production is about 25% lower than current deepwater projects in Guyana or Brazil. It can be expected that regardless of how the situation evolves, the entire process of restructuring the Venezuelan oil industry will be quite lengthy. In the short term, oil prices will continue to be mainly affected by OPEC+ policies, Russian exports, and global demand changes, rather than political changes in Venezuela. However, looking at the entire industry chain, the downstream sector - including oil refining companies and petrochemical plants - may be the first areas where the future impact is most evident. Potential winners: American coastal refineries? Many industry insiders believe that if future Venezuelan industry policies are influenced by the US, American refineries along the Gulf Coast will benefit the most directly - Venezuelan crude oil is heavy, high-sulfur, and perfectly suited to the processing capabilities of many refineries in that region. Previously, sanctions on Venezuela and Russia had forced American refineries to use more expensive or lower-quality alternatives to replace heavy crude, which sometimes led to shrinking profit margins for refineries. Even with moderate and reliable Venezuelan supply in the future, it will improve the flexibility and economic efficiency of those refineries that process heavy, sour crude oil because they can purchase this crude oil at a discount. According to the latest import data from the US Energy Information Administration, only a few US refineries received Venezuelan crude oil in October, with a total import volume of about 4.2 million barrels. Valero Refining Company topped the list with around 1.6 million barrels, followed by Phillips 66, which imported about 1 million barrels. In the overall picture, these imports from Venezuela are insignificant compared to the volume of heavy crude purchased from other suppliers by these refineries. In just one month in October last year, Valero imported nearly 5 million barrels of crude oil from Mexico and over 2 million barrels from Colombia, in addition to additional purchases of heavy crude oil from Brazil, Ecuador, and Argentina. Chevron, for example, relies heavily on heavy oil from various countries such as Guyana, Mexico, Saudi Arabia, Iraq, and Canada, with Guyana's crude oil imports far exceeding those of Venezuela. Chevron is currently the only major American oil company operating in Venezuelan fields, with the heavy crude oil it produces used by refineries along the Gulf Coast and other areas. Francisco Monaldi, director of the Latin America Energy Project at Rice University's Baker Institute, said that Chevron is already prepared to benefit the most once Venezuelan oil production opens up. However, he also pointed out that other American oil companies would closely monitor the political stability in Venezuela and the evolution of the operational environment and contractual framework. He said that the most likely company to return to the US market is ConocoPhillips because they are owed over $10 billion, and they are unlikely to retrieve that money without returning to the Venezuelan market. He added that ExxonMobil may also return to the country, but they are owed less money than ConocoPhillips. "ExxonMobil, ConocoPhillips, and Chevron will not worry about investing in heavy oil because there is a high demand for heavy oil in the US, and their focus on decarbonization is relatively low." At the same time, American refineries will not need Venezuela to regain its position as a major global supplier to achieve certain economic benefits - even if Venezuela can only provide a small amount of reliable incremental crude oil - with the necessary financing, insurance, and trading conditions, they can expand the range of heavy, sour crude oil they use and improve the cost efficiency of their raw materials. Saul Kavonic, Director of Energy Research at MST Financial, estimates that if the new Venezuelan government can lift sanctions and attract foreign investors back, Venezuelan oil exports could reach close to 3 million barrels in the medium term. Long-term losers: Canadian heavy oil producers The most meaningful competitive landscape will emerge in the more distant future - the exports of Canadian heavy oil producers will be impacted, aligning with Canada's efforts to reduce its reliance on the US. This may also be the key significance of the US trying to dominate Venezuelan crude oil exports. Venezuelan crude oil presents the most direct competition to Canadian oil sands crude oil in terms of quality, refinery compatibility, and end markets. Both are high-sulfur heavy crude oil, primarily purchased by US refineries with coking capabilities. Even with moderate and continuous Venezuelan exports, competition will be reintroduced into this niche market in which Canada previously enjoyed an exceptionally advantageous position. Venezuela's long absence from Western markets has solidified Canada's position as the dominant supplier to US refineries that process heavy, sour crude oil. Currently, Canada exports approximately 3.3 million barrels of crude oil to the US daily, accounting for about a quarter of the processing capacity of US refineries. Most of this is heavy oil sands crude oil, mainly flowing to the Midwest and Gulf Coast regions of the US - where local refineries were originally built to process heavy crude oil from Venezuela and Mexico. This reliance on the US has long been seen as a strategic vulnerability by Canada. Previous Canadian governments have sought to expand export channels and end markets. With the current Prime Minister Justin Trudeau's influence on Canadian economic policy, the government's policy focus has shifted from expanding production at all costs to improving market access, enhancing price resilience, and enhancing long-term competitiveness. However, this deeper level of export diversification still has a long way to go. Grand plans like building truly east-west pipelines to connect Alberta crude oil with the Atlantic coast are still facing challenges at the political and commercial levels, with little likelihood of being achieved by 2030. While rail exports can provide limited flexibility, they are more costly and less reliable. Currently, the US remains the overwhelmingly dominant export destination for Canadian oil sands products. The rapid changes in the Venezuelan situation may pose long-term narrative risks to Canadian producers listed in the US, such as Suncor Energy, Cenovus Energy, Canadian Natural Resources, and Imperial Oil. Venezuelan oil will not replace Canadian supply overnight, nor is it a profit issue for 2026. However, as time goes on, increased competition may limit the potential for heavy oil price differentials to rise, eroding the scarcity premium supporting oil sands profits - and by then, Canada may still not have completely escaped its excessive dependence on the US market. In contrast, US shale producers are unlikely to be affected - their production is primarily light crude, and they cannot replace Venezuelan heavy crude oil. Their economic viability depends on drilling efficiency, costs, and oil prices - not competition with heavy crude oil.