The Oil Stocks China Doesn’t Want You to Buy

In old fables, the boy who cried wolf always got one last warning before the village stopped listening.

Nicolás Maduro is long past his.

For years he perfected a certain kind of geopolitical theater — the chest-puffed defiance, the televised accusations, and the ritual claims that Washington was scheming to seize Venezuela’s treasure trove of oil. 

Spoiler: We weren't. 

Every time tension starts building, Maduro huffs and puffs. Traders assume the risks are real, and markets flinch, because on paper, Venezuela’s oil reserves are too large to ignore. 

You see, Maduro understands this reaction. 

He depends on it.

Why? Well, quite frankly, it’s really the only card he has left to play. 

Except, something has changed over the past 11 years since he took office. He drove his country and economy into the ground and refuses to step aside. 

President Trump’s latest escalation — U.S. strikes on cartel boats drifting off Venezuela’s coastline, and the growing expectation of direct action against cartel networks inside Venezuelan territory — should have triggered the old panic. 

A decade ago it would have. Hell, even five years ago it would’ve caused an uproar in global oil markets. 

And yet, the world has barely blinked. 

Recently, Maduro tried to resurrect the old script, accusing Washington of coveting his vast reserves. But the performance sounded more stale and hollow to those of us used to this geopolitical bluster.  

We remember all too well how this game is played and the insanity of mending ties with Venezuela.

Perhaps the veteran members of our investment community remember how President Biden lifted sanctions on the simple condition of free and fair elections — and how Maduro openly mocked that requirement, held a corrupt vote, and paid no real price because Biden desperately needed stable oil flows after draining half of the Strategic Petroleum Reserve during the Russia–Ukraine price shock.

Back then, Maduro still wielded leverage. 

He knew it. Washington knew it… and the market definitely knew it.

However, that leverage is all but gone.

You see, supply fulcrum the headlines make it out to be. Yes, 303 billion barrels of proved reserves is a helluva lot of crude oil — it is! 

But it’s only a strong source of global supply if the country is able to extract those extra-heavy oil barrels. 

Even China is losing faith that it’ll ever see a significant return on its investment after pumping billions in loans to PDVSA years ago. Between the blatant corruption and technical ineptitude — not to mention the fact that PDVSA needs oil prices near $100 per barrel to extract them — far too much of those reserves are doomed to stay locked underground. 

And that’s where the real story begins.

Peaking Behind the Curtain of Venezuela’s Collapsing Petrostate

As I mentioned, on paper Venezuela sits atop the largest oil reserves in the world: 303 billion barrels is the kind of number that catches the mainstream media’s attention. 

Unfortunately, there’s more to that number than meets the eye.

Nearly all of Venezuela’s oil is extra-heavy crude from the Orinoco Belt. It doesn’t flow freely like the light, sweet crude pumping out of wells in the Permian Basin. Instead, it crawls like asphalt, which means it requires expensive upgrading before refiners can turn it into useful products like diesel. 

And make no mistake, finding buyers hasn’t been a problem in the past, since our refiners along the Gulf Coast are specifically geared to process that poorer quality heavy crude. 

But that's that's not the case anymore.

Today, we barely import Venezuelan crude — about 141,000 barrels per day in 2025, a whisper of the volumes that once funded Chávez’s revolution and Maduro’s survival.

And with tensions rising and President Trump all-but-guaranteed to aggressively strike drudge cartels on Venezuelan soil, it won’t be surprising to see imports fall back to zero — just as they did from mid-2019 through early 2023.

And that’s only the surface.

Behind the curtain sits PDVSA, a state oil company so consumed by corruption that investigators uncovered a missing $17 billion — enough to fund several years of production upgrades, or a modest national recovery, or simply an oil industry that functions. 

Instead, the money evaporated into the pockets of officials who treated the company like a personal ATM.

The technical decay is just as bad. The state-run company lacks the equipment, the expertise, and the financing to efficiently extract those ultra-heavy barrels. 

Looking at this situation from a geopolitical standpoint, the situation has deteriorated further. 

For more than a decade, Maduro could count on China for political cover. Now, I’m not as convinced that China would come to the defense of Venezuela on the world stage today. 

Why? Well, because Beijing has been quietly replacing Venezuelan imports with another, more reliable source of heavy oil. 

You see, China doesn’t need Maduro like it used to. More Canadian crude was exported to China in 2025 than ever before — and those exports will continue climbing for years to come, especially after Canada further increases pipeline capacity from Alberta to British Columbia. 

Yet all of this doesn’t take into account the fact that OPEC is also turning its back on Maduro. 

After the Saudis recently called bullshit on everything, OPEC’s newest policy shift will recalculate member production baselines using maximum sustained output. 

Given the poor state of its state-run oil company, do you really think that Venezuela can significantly boost production over a three-month window and sustain it for a year? The paper tigers within OPEC will collapse, and nobody should be optimistic over PDVSA’s future. 

Believe me, Maduro lost leverage long before the first missile struck a cartel boat.

It’s only a matter of time before the market catches on. 

Where the True Oil Power Lies

If Venezuela is losing relevance, someone else is gaining it.

That “someone” is Canada.

And while Maduro’s wells sputter, Canadian oil stocks are quietly becoming the lynchpin of the heavy-oil market.

Those pipeline expansions from Alberta to British Columbia will send more and more crude to Asia than ever before. China, once a lifeline for PDVSA, is now a top buyer of Canadian heavy crude — precisely because it’s reliable, politically stable, and produced with the technical consistency refiners require.

This isn’t a small shift for China. 

For the U.S., the situation is even clearer. Heavy crude is essential for producing products like diesel — fuel that is still vital to everything from trucking to military logistics. 

If Venezuela goes offline tomorrow, Canadian barrels will fill  the gap — and with none of the geopolitical baggage.

That’s why China is diversifying away from Maduro. 

Of course, it also puts Canadian oil stocks in a remarkable position…

Two superpowers want the same barrels — and one neighbor’s collapse is making those barrels even more valuable.

The more tensions escalate, the more heavy-oil flows will re-align, with a handful of Canadian oil players standing to benefit more than any others. 

You see, they’re the ones producing the very barrels China doesn’t want you to own; the quiet beneficiaries of Maduro’s decline and the rising demand from both Washington and Beijing.

Maybe it’s time that you check out the details behind this opportunity for yourself.