Enbridge (ENB.TO)(ENB) chief executive officer Greg Ebel says Canadian crude will continue to see strong demand from U.S. Gulf Coast refineries, even if additional heavy oil imports from Venezuela reach American shores.
“The U.S. Gulf Coast is the world’s best refining market, and Canadian crude is a meat and potato part of the diet there,” he told stock market analysts on Friday. “The Venezuela piece is a supplement to Canadian [heavy grades of oil], not a replacement.”
The U.S. Treasury Department eased sanctions on Venezuela’s energy sector on Friday, issuing two general licenses that allow global energy companies to resume oil and gas operations. Venezuela’s massive oil industry has been in the hands of the U.S. government since the military captured president Nicolás Maduro last month.
Shares of Canada’s largest oil producers faced pressure in January, as investors weighed the prospect of America reducing its reliance on oil imports from Canada.
Calgary-based Enbridge is uniquely at the intersection of Canada’s oil industry, and imports of Venezuelan crude in the U.S. Gulf. The company’s Mainline network is Canada’s largest oil pipeline system, connecting Western Canada with the U.S. Midwest, Eastern Canada, and the U.S. Gulf Coast.
Enbridge is also the largest conduit for oil imports to the U.S. through its Gulf Coast terminals.
“On Venezuela, it’s early days, and certainly the longer-term outcome there is uncertain,” Ebel said. “We’ll see how quickly Venezuela grows its production. Then, we’ll also need to evaluate what portion of that increased supply growth comes to the west Gulf Coast.”
According to the U.S. Energy Information Agency, Canada exports 4.5 million barrels of oil per day to the U.S., representing about 90 per cent of Canada’s total oil exports. In 2024, the Canadian Energy Regulator says about 16 per cent of Canada’s total crude oil exports were destined for the U.S. Gulf Coast.
More to follow.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.