Miscibility is not reached in carbon dioxide (CO2) flooding for recovery of heavy oils. Thus, an important advantage of no gas/oil surface tension is lost. Nevertheless, some CO2 continues to dissolve in oil and reduces the oil viscosity, which makes the displacement easier. This is an asset that remains. However, the viscosity of heavy crude is much higher than the viscosity of CO2, causing the displacement process to be unstable and leading to fingering or channeling. We have undertaken the linear-stability analysis of the displacement process, which is that of immiscible displacement but includes mass-transfer effects. All stabilizing/destabilizing mechanisms of both immiscible displacement and miscible displacement are included. A number of stabilizing mechanisms related to mass transfer have been identified. We are able to provide a numerical evaluation of the results that show the lowering of viscosity that is considered only in miscible displacement leads to a partial stabilizing effect that overcomes a large destabilizing effect of the adverse mobility ratio. There is a restricted form of instability that would only give rise to a mushy zone at the front. The two regions are separated at a wavenumber determined numerically as 0.531 cm-1. We are also able to show that in the limit that the solubility of CO2 in oil drops to zero, the above window of instability becomes infinite.