Venezuela's Oil Comeback Threatens Canada's Oilsands Dominance

The United States has made a significant oil deal with Venezuela, which is causing concerns for Alberta's oilsands industry.

Kendall Dilling, president of the Oil Sands Alliance, believes that this agreement could have serious ramifications for Canada. He noted that during the early 2000s to mid-teens, Canadian oilsands production increased as Venezuela's dropped off.

'Now, we're kind of the incumbent. It's ours to lose, but Venezuela very much has the resources and the market access, and especially with U.S. support now, if they start increasing production, it's a very significant competitive threat to us,' Dilling said.

Rising oil output in Venezuela and a loosening of U.S. sanctions have contributed to an increased price differential for Canadian heavy crude by about $4 a barrel. Rory Johnston, founder of the Commodity Context newsletter, believes that this deal may slightly increase investment in Venezuela but mostly has political implications.