Canada has received another “wake-up call” on what can happen when geopolitics suddenly rattle global oil markets, punctuating the push for investing in new export infrastructure.

The capture and removal of Venezuelan president Nicolas Maduro by U.S. forces on Saturday — and U.S. President Donald Trump’s plan to have American companies rebuild the South American country’s oil sector — potentially alters the longer-term landscape for Canadian heavy oil producers.

Canada, which sends more than 90 per cent of its oil exports south, is the largest supplier of foreign crude to the United States. It has increased its market share to the world’s largest oil-consuming nation over the past decade, while Venezuela oil output has tumbled.

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A new report by Servus Credit Union concludes Venezuelan oil production will not suddenly displace Canadian crude at American refineries. But over the longer run, it could reduce demand and widen the discount on heavy oil, and potentially slow investment into growing this country’s industry.

“While Canada’s oil exports to the U.S. are not a risk in the short term, the current situation highlights how vital trade diversification is to Canada,” the report states.

“What’s happening right now in Venezuela is really a wake-up call for Canada,” said Charles St-Arnaud, chief economist with Servus Credit Union.

“If you manage to get more access........

© Calgary Herald