The $60 Illusion: Why Cheap Oil Won’t Last

When we first tried to kneecap Putin’s oil empire, we thought financial warfare would be enough. 

Back in 2014, after the invasion of Crimea, U.S. and European leaders banned drilling technology, froze bank accounts, and shut Russian companies out of credit markets. The move was hailed as a masterstroke — proof that modern sanctions could replace military force.

Unfortunately, oil has a way of slipping through cracks. 

Within months, Russian exports were rerouted through shell companies, “dark fleet” tankers with their transponders conveniently off, and middlemen happy to move crude at a discount. 

By 2022, when the second wave of sanctions followed Moscow’s full-scale invasion of Ukraine, those same tankers had grown into an invisible armada. Ship names changed, insurance documents were forged, and Russian crude simply vanished from one port and reappeared in another.

The sanctions worked — but only on paper. You see, Moscow STILL sold millions of barrels per day to India and China, cushioning its economy and funding the war. The West bluffed, and Putin called it.

Now it’s 2025, and history looks ready to repeat itself… or will it?

President Trump’s new sanctions are cut from a different cloth. They don’t just target Russian producers — they strike at the buyers. And that small distinction could have enormous consequences.

Trump Oil Sanctions Strike Back

Trump’s latest sanctions last week are cut from a different cloth. 

Why? Simple, it’s because they put Putin’s biggest oil customers — India and China — directly in the crosshairs. 

Any refinery, trading firm, or insurer continuing to deal with those companies risks being locked out of the U.S. financial system.

For the first time in a decade, these penalties have real bite.

• India’s refiners are already backing away. Reliance Industries and Indian Oil Corporation have reportedly begun winding down contracts with Rosneft to avoid running afoul of Washington.
  
  
• China’s state oil companies are pausing purchases. PetroChina and Sinopec are delaying or diverting shipments to test how aggressive U.S. enforcement will be.
  
  
• Russia’s “shadow fleet” is feeling the squeeze. Without buyers to receive those disguised cargoes, the incentive to play maritime hide-and-seek diminishes fast.

What makes this moment different is that Washington isn’t just trying to restrict exports — it’s cutting off demand. 

And for every buyer that steps aside, Russia must either sell at a deeper discount or leave those barrels stranded.

Although fallout could ripple quickly, President Trump’s other geopolitical chess moves could be the tipping point; his renewed aggression against Venezuela threatens to choke off a key source of the heavy oil used by Gulf Coast refineries.

We’ve moved long past the previous administration’s insanity of mending ties with Venezuela. 

The Heavy Oil Domino Effect

Look, my readers understand that the Canadian oil sands have long been the unsung hero of America’s refining complex. 

Their thick, carbon-rich crude mirrors the heavy grades once shipped from Venezuela. So if those Venezuelan exports dry up from any conflict with the U.S., you know as well as I do that it’s Canadian crude that’ll quietly fill the gap.

Now, as Washington turns up the heat on Caracas again, it’s THOSE elite Canadian producers that stand to benefit — but they’re not the only ones paying attention.

• China is now Canada’s biggest new customer. Beijing’s imports of Canadian heavy crude hit an all-time high this quarter, taking advantage of expanded pipeline capacity.
  
  
• New export routes are on the table. Ottawa and Alberta are exploring additional pipeline projects that would link the oil sands directly to Pacific shipping routes — and to Asian buyers.
  
  
• Competition for Canadian barrels is heating up. If Venezuela’s oil is off the market and Russian cargoes are tangled in sanctions, the scramble for heavy crude intensifies.

In other words, the same refineries that relied on Russian or Venezuelan feedstock may soon find themselves competing with China for Canadian supply. 

That’s not the picture of a “glutted” market — it’s one of quiet scarcity taking shape.

Why $60 Oil Is an Illusion

Right now, WTI prices reflect the same complacency that has haunted the oil market for a decade. Traders assume Russia will outsmart sanctions, that Venezuela’s state-run oil company, PDVSA, will be able to recover from the extreme corruption and maturing fields that plague the country’s oil production (spoiler: They won’t!), and that U.S. shale can step in to fill every gap (spoiler: It can’t!)

For the first time since 2014, the sanctions chessboard is different:

1. Buyers, not sellers, are on defense.
   
   
2. Heavy-crude logistics are tightening.
   
   
3. And political risk is no longer just an emerging-market problem — it’s baked into the barrels.

If Russian exports dip even modestly and Venezuelan exports falter, the “cheap oil” narrative would implode under its own weight. 

Your Investment Angle: Canada’s Quiet Advantage

For individual investors like us, the real play isn’t in guessing whether the sanctions hold or break — it’s in identifying who wins no matter what happens.

If Russia’s crude gets blocked and Venezuela stays sidelined, Canada becomes the indispensable source of heavy oil for both U.S. refiners and Asia. 

Here’s a breakdown of what that means:

• Canadian oil companies gain pricing power as their barrels grow scarcer.
  
  
• Pipeline operators linking Alberta to export routes see volumes rise.
  
  
• And long-ignored Canadian energy stocks suddenly become the cleanest way to own the one thing the world can’t fake: heavy crude.

While Wall Street obsesses over the next OPEC meeting or another IEA pipedream over a near-term supply glut, the smart money is watching this realignment unfold. 

Maybe this is the last time anyone calls oil cheap at all.

And you can bet we’re not the only ones finally catching on to these Canadian oil gems — go ahead and check this one out for yourself.