The frantic search of alternatives to Russian energy in Europe has significantly increased demand for Norway’s oil & gas.
Europe’s second largest natural gas supplier is facing accusations of profiting from the conflict in Ukraine as the money flows in.
Mateusz Morawiecki is the Polish Prime Minister and is looking to Norway to replace some of the gas Poland got from Russia. He said that Norway’s huge oil and gas profits were “indirectly preying upon the war.” He asked Norway to use this windfall to help the most affected countries, including Ukraine.
These comments touched a nerve last week, even though some Norwegians question whether they are doing enough to fight Russia’s war. They increased economic aid to Ukraine, and helped neighboring countries reduce their dependence on Russian energy.
To help Europeans cope with the rising energy costs, which are now worsened by war, taxes have been imposed on windfall profits from oil and gas companies. They were approved by Spain and Italy, while the United Kingdom plans to implement one. Morawiecki asks Norway to send oil and profits to other countries.
Norway, Europe’s richest country, has committed 1.09% to overseas development. This is one of the highest percentages in the world — more than $200 million for Ukraine. Some would prefer to see more money allocated to alleviate the effects of war, and not cut from funding agencies that support people in other countries.
Berit Lindeman (Policy Director of the Norwegian Helsinki Committee), stated that Norway has made drastic cuts to most U.N. institutions, support for human right projects and other U.N. institutions in order to pay the cost of hosting the Ukrainian refugees.
She was part of a protest organized Wednesday at Parliament in Oslo.
Lindeman stated that it looked really bad when incomes have risen this year.
Oil and gas prices had been rising amid an energy crisis, and they have risen since then. Natural gas prices are three to four times higher than they were last year. After the invasion, Brent crude oil, an international benchmark, exploded to $100 per barrel and has never been below that level since.
Equinor, the majority-owned Norwegian energy company, made four times as much in the first quarter of this year’s fiscal year than it did last.
This bounty prompted the government to revise their forecast of income from oil activities to 933 billion Norwegian Kroner ($97 billion) in this year. This is more than three times its 2021 earnings. To support the country when oil runs out, the vast majority will be channelled into Norway’s huge sovereign wealth fund. It is the largest in the world. It is not being diverted elsewhere by the government.
Norway has “contributed substantial assistance to Ukraine since the beginning of the war,” Eivind Vad Petersson, State Secretary, stated by email.
He stated that the country had sent financial support, weapons, and more than 2 billion kroner in humanitarian assistance “independently” of oil and gas prices.
European countries have, in turn, helped to increase the prices of Norwegian energy by trying to diversify away from Russia. They are accused of continuing to purchase Russian fossil fuels and helping finance the war.
This energy dependence “provides Russia a tool to intimidate us and to use against our, and that has clearly been demonstrated now,” NATO Secretary General Jens Stoltenberg, an ex-prime minister of Norway, said at the World Economic Forum in Davos, Switzerland.
Russia has stopped natural gas supplies to Finland, Poland, and Bulgaria because it refused to pay in rubles.
Through conservation, renewable development, and other sources, the 27-nation European Union aims to decrease dependence on Russian natural gas by at least two-thirds by year end.
Europe has pleaded with Norway and other countries such as Qatar and Algeria for assistance to cover the shortfall. Norway supplies 20% to 25% of Europe’s natural gas, as opposed to Russia’s 40% prior the war.
