Trump's Venezuela Oil Deal Sparks Tensions with Canada Over Energy Dominance

US President Donald Trump has reignited tensions in the trade war between Washington and Ottawa by sharing a report on his social media platform stating that a massive oil deal with Venezuela puts Canada 'on alert'. The agreement grants the US majority control over more than 65 billion barrels of proven Venezuelan oil reserves, making it one of the largest oil deals in history.

The project aims to develop Venezuelan oil fields with American and private sector participation, increasing production after years of decline. Trump claims that increased access to Venezuelan oil will enhance US energy security, reduce fuel prices, and provide quantities for the Strategic Petroleum Reserve.

Canada's reliance on exporting crude oil to the US market makes this deal significant. In 2025, Canada provided around 63.4% of all US crude oil imports, with most directed towards the Gulf Coast refineries that process heavy Canadian crude.

A large part of Venezuelan oil is heavy crude, which could compete with Canadian exports and reduce US dependence on them in the long term. However, experts warn that restoring Venezuela's oil industry to high production levels will take years due to the need for significant investments and rehabilitation.