Morgan Stanley’s analysis indicates that U.S. military action in Venezuela and efforts to oust Maduro could be a negative factor for most oil producers, particularly those focused on Canada’s oil sands. The analysis notes that Venezuela primarily produces heavy, sulfur-rich crude oil, similar in quality to Canadian heavy crude (WCS). Although Washington’s hardline stance has limited short-term impact on supply, Morgan Stanley suggests that any future easing of sanctions on Venezuela could exacerbate the already severe oversupply in the oil market. This would lead to a further widening of the discount of WCS relative to U.S. West Texas Intermediate (WTI) crude. Morgan Stanley expects Imperial Oil and Cenogus Energy to be most affected by changes in the WCS-WTI spread, while Senco Energy and Natural Resources Canada are expected to be more resilient.