Venezuela Heavy Crude Crushes Canadian Price

Heavy crude markets have reacted sharply to regime change in Venezuela, with Canadian prices bearing the brunt of the initial move. In the days following President Maduro’s ouster, Western Canadian Select (WCS) especially at Cushing and on the Gulf Coast was hit hard as traders anticipated an eventual return of Venezuelan barrels to the U.S. Gulf Coast. Venezuela’s crude slate is overwhelmingly heavy sour, closely matching Canadian oil sands grades, and the prospect of additional supply into an already oversupplied heavy market quickly widened discounts. Since October 2025, the WCS discount for barrels traded at Cushing versus Domestic Sweet (WTI) blew out from about minus $4.15/bbl to roughly minus $9.33/bbl by January 7, reflecting expectations of increased competition for heavy barrels (blue line in graphs below). WCS on the Gulf Coast these days typically trades about $1/bbl higher than WCS at Cushing since it is located near so many refineries that can use it, but it also followed the heavy crude market lower due to the Venezuela effect (green line in graphs below).