In bulk power systems, detecting the sources of low-frequency oscillations is a challenging problem. Among the techniques available, the dissipating energy flow (DEF) method has emerged as a promising tool with notable success with real-world oscillation cases. While the mathematical justifications for the method’s characterization of a device as an oscillation source (or sink) is well-studied for synchronous generators and standalone inverters, no insights have been developed for power-electronics-interfaced dc transmission systems. To fill this gap, this paper presents a theoretical analysis of the DEF in a voltage source converter-based high voltage direct current (VSC-HVdc) system. Passivity-based analysis is performed to explain why a VSC-HVdc system, operating at unity power factor, with the commonly used control strategy involving constant real power control, dc-link voltage control, and ac voltage – reactive power droop control or constant reactive power control is a source of oscillation energy. Supporting case studies are performed on the IEEE 4-machine and 16-machine test systems.