Oslo
Pedestrians walk along Karl Johans Gate, the main shopping street in Oslo, Norway, on Wednesday, Feb. 6, 2019. Credit – Odin Jaeger/Bloomberg—Getty Images
Norwegians are accustomed to seeing their country as one of the good guys. As the world’s ninth-largest international development donor and home of the Nobel Peace Prize, it has built a reputation for humanitarianism that is integral to its national identity. But it is also one of the world’s main exporters of gas and oil, and as sanctions on Russia have reduced supply and driven prices up, it stands to make a sizeable profit on energy this year. As a result, Norwegians suddenly find themselves grappling with the disconcerting implications of a windfall that could well have them profiting handsomely from the war in Ukraine.
“There are times when it’s not fun to make money,” said Petroleum and Energy Minister Terje Aasland in an interview with television channel TV2 earlier in March. “And given the situation, this is one of them.”
Norway produces about 2% of the global market’s crude oil, and, as the supplier of 20% to 25% of Europe’s natural gas, it is the second largest exporter to the region after Russia. Since 1996, the country has invested the revenues from the petroleum industry into its Government Pension Fund, a sovereign wealth fund designed, “to shield the Norwegian economy from ups and downs in the oil revenues,” Finance Minister Trygve Slagsvold Vedum said in an interview with TIME over email. “It serves as a financial tool and a long-term saving plan for current and future generations.” Although its value recently decreased because of market volatility brought on by the crisis, it is still worth about $1.3 trillion—or $227,000 per citizen.
Read more: Ukrainians Don’t Blame Just Putin For the War. They Blame Russians.
Even before the war started, Norway earned a record 825 billion kroner in 2021 from petroleum sales, triple the amount of the year before. But since Russia invaded Ukraine a month ago, prompting a wave of sanctions and sending gas and oil prices skyrocketing, even that impressive rise has been dwarfed.
“The government assumed [revenues of] 277 billion kroner,” says Dane Cekov, an analyst at Nordea Bank, of the expected earnings for 2022. “But that calculation was made in August, and oil and especially gas prices started to move from September and October. And then, once this atrocious war started, it had an even higher impact on oil and gas prices.”
That’s putting it mildly. In early March, Nordea Bank predicted revenues of 1.75 trillion Norwegian kroner, and although that number has …….
Source: https://news.yahoo.com/war-ukraine-stands-norway-lot-195140928.html
