Canadian oil stocks have come under pressure as investors react to uncertainty around Venezuela, after the U.S. signalled plans to take control of the country’s oil industry and encourage American companies to revive production.
BNN Bloomberg spoke with Rebecca Teltscher, portfolio manager at Newhaven Asset Management, who said markets may be overemphasizing longer-term risks tied to Venezuelan supply while underestimating more immediate geopolitical and economic pressures.
Key Takeaways
- Any significant increase in Venezuelan oil production would likely take years and require substantial investment.
- Near-term displacement of Canadian oil is unlikely given infrastructure, political and capital constraints in Venezuela.
- Canadian producers have shown resilience despite weaker oil prices and slowing economic conditions.
- Much of the recent selling appears driven by short-term trading rather than fundamental deterioration.
- Elevated global geopolitical risks may pose a more immediate threat to energy markets than Venezuelan supply.
Read the full transcript below:
ANDREW: Markets are still trying to make sense of the situation in Venezuela. U.S. President Donald Trump has said the U.S. plans to take control of Venezuela’s oil industry and ask American companies to revitalize it. We saw some pressure on Canadian oil stocks yesterday amid speculation that more Venezuelan heavy oil could come onto the global market and compete with Canadian supply. Let’s get more from Rebecca Teltscher, portfolio manager at Newhaven Asset Management. Rebecca, always great to see you. Happy New Year — I hope I’m not too late.
REBECCA: Happy New Year.
ANDREW: Thanks. We’re also hearing that it would take years to meaningfully revive Venezuela’s oil production.
REBECCA: Yeah, it was interesting to see the market’s reaction yesterday to Canadian oil stocks. Am I concerned about Venezuelan oil production? Maybe in the medium to long term. In the short term, absolutely not. In the meantime, there are a lot more questions than answers as it relates to what’s going to happen with Venezuelan oil production. As you mentioned, it’s going to take years, and estimates range from tens of billions of dollars to hundreds of billions of dollars to bring Venezuelan production back up to about three million barrels a day.
There are a lot of uncertainties, and if there is going to be displacement, this is a medium- to long-term situation. What I find interesting is that while the market reacted very sharply to a potential medium- to long-term risk, it seemed to be ignoring some short-term risks that are right in front of us. Geopolitical concerns are higher than they’ve ever been, the economy is slowing, the housing market is slowing and the stock market is overvalued. Despite that, U.S. and Canadian stocks continue to make record highs, largely ignoring what I see as larger concerns than what’s happening in the oil market.
ANDREW: Sticking with the oil market, the stock market is doing just fine, but oil prices have been under pressure. It’s interesting — stocks setting record highs while oil moves lower.
REBECCA: Oil was already under pressure prior to the Venezuela announcement. There’s ongoing discussion around OPEC producing more, so there are supply concerns. We’ve also been saying for some time that the economy is slowing and that there’s a potential risk of recession, and during those periods demand for oil generally declines. That’s not surprising.
What we actually found commendable is how well Canadian oil producers have held up in a weakening environment. We’ve said for a long time that CNQ is our preferred oil producer because it’s a low-cost producer with premium assets. That allows it to perform relatively well in a lower oil price environment, especially compared with some U.S. light oil shale plays. If we see prolonged periods of sub-$50 oil, U.S. production could be affected, whereas I’m not concerned about Canadian oil production even if prices remain weaker for longer.
ANDREW: One stock you like is Enbridge. It saw some selling yesterday, but you see long-term value.
REBECCA: Yes. The two stocks that were down the most in our portfolio yesterday were CNQ and Enbridge, and the magnitude of those declines reinforced our view that this wasn’t fundamental selling. It was likely fast money — hedge funds, algorithms or quantitative strategies. Anyone looking at the fundamentals likely wouldn’t have sold.
Enbridge was down about three per cent yesterday. It still yields around six per cent, and its mainline is full. The only potential risk would be its planned mainline expansion, but that’s a roughly $1-billion project within a capital program of more than $20 billion. Most of Enbridge’s growth is actually in gas distribution, which is very utility-like. In the short to medium term, the mainline remains full, and we don’t see a near-term risk of Canadian oil displacement.
CNQ was similar. The stock opened down about eight per cent and closed down roughly six per cent. About 15 per cent of its oil production is conventional heavy oil that could compete with Venezuelan supply. Around 40 per cent of its production is natural gas, which is often underappreciated. Much of its oilsands production is upgraded into light synthetic crude that trades at a premium and doesn’t directly compete with Venezuelan oil.
These are two stocks we continue to own. We saw weakness yesterday and some continued weakness today, but we don’t see this as a long-term fundamental issue. We believe this reflects short-term trading, and it could present an opportunity over time. For now, we’re watching how it plays out, but it does appear Canadian oil has borne the brunt of the recent selling.
ANDREW: Rebecca, thank you very much.
REBECCA: Thank you.
ANDREW: Rebecca Teltscher, portfolio manager at Newhaven Asset Management.
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This BNN Bloomberg summary and transcript of the Jan. 6, 2026 interview with Rebecca Teltscher are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
