After months of intensifying pressure and signals of interest in regime change, the United States executed a bold military operation (codenamed Operation Absolute Resolve) in the early hours of January 3, 2026. The impact of this intervention will reverberate across the oil markets, global economy, and geopolitical landscape. However, these effects will differ in magnitude and timing.

• Only 10% of Canadian barrels are at risk of near-term displacement, specifically those going to the US Gulf Coast (PADD 3).
• We anticipate a gradual widening of the price spread between the US benchmark WTI (West Texas Intermediate) and the Canadian benchmark WCS (Western Canadien Select) from US$2 to US$8 per barrel, depending on supply and contractual constraints. The Alberta economy is likely to suffer as a result.
• Venezuela's oil industry has suffered for decades from underinvestment, mismanagement, and sanctions. Three to five years are likely needed for incremental production gains, and up to a decade for material capacity expansions.
• The US intervention is likely to prompt similar actions by Russia and China, which could increase market uncertainty.