Norway has been accused of taking advantage of Russian President Vladimir Putin’s war in Ukraine after the nation raked in billions as Russia sent global energy prices soaring. Gas costs have gone up seven-fold since this time last year, largely a result of Russia slashing the EU’s gas supplies amid Putin’s Ukraine invasion. While the UK gets most of its gas from Norway, the EU is far more dependent on Moscow’s supplies, which accounted for around 40 percent of the bloc’s needs last year.
But while Putin weaponises his gas supplies in what many claim is an act of revenge for harsh western sanctions, it is not only Russia that has benefited from the skyrocketing prices.
Norway too has raked in billions due to the integrated nature of the gas market, and as Britain relies heavily on this gas, this had had a huge impact on energy bills in Britain.
Norwegian opposition party lawmaker Rasmus Hansson, has lashed out at the ruling party in his country for profiting from this, calling it “morally wrong”.
It comes as the nation expects to rake in €94billion (£82billion) in net income from petroleum sales this year, but risks tarnishing relationships with trading partners like the UK by forcing them to pay staggering prices for supplies.
Mr Hansson told Politico: “We think Norway is being short-sighted and too selfish. We are getting a windfall profit which is very big, but the question is does that money belong to us as long as the most obvious reason for that price increase and that extra income is the disaster that has befallen the Ukrainian people?”
The Norweigan said he believes that instead of charging European allies astronomical prices, his country should instead have experts set what they believe to be a “normal” gas price, arguing that everything above that should be viewed as war profits and be redistributed.
Mr Hansson suggested that the extra money could be diverted to a solidarity fund that would help Ukraine to rebuild after Putin’s brutal war is over.
And while the state may be profiting, Morten Frisch, a Norwegian energy consultant based in the UK, has said that Putin’s war has caused prices in Norway to climb 10 to 20 times higher than they were before the Russian invasion of Ukraine.
But perhaps while profiting from the war, Norway is making an attempt to distance itself from the Kremlin after its major state-owned oil giant Equinor completely pulled out of all operations in Russia.
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Equinor CEO Anders Opedal said in a statement: “We are all deeply troubled by the invasion of Ukraine, which represents a terrible setback for the world.” It came after the energy giant withdrew from four joint venture projects with Russian energy firm Rosneft.
The Norweigan company also halted all new investments in Russia and slammed the breaks on all trading of oil and gas products from Russia just three days after Putin invaded Ukraine in mid-February.
However, this has not stopped Oslo from raking in huge sums of cash as the Russian dictator continues to unleash havoc on his neighbouring country while sparking chaos in Europe as energy costs spiral.
The UK’s striking reliance on Norway’s exports was also laid bare after Oslo threatened to stop sending energy to Britain via a 450-mile interconnector that joins Blyth, Northumberland from the Kvilldal power station through cables that run under the North Sea.
This is despite Norway typically being considered a “reliable partner” when it comes to trading energy with the Nordic nation. But last month, Norway’s gas export flows plummeted by 34 million cubic metres per day during a tough week in August.
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The UK usually gets 60 percent of its gas from Norway, with its reliance on the nation expected to increase in later years as the UK cuts back on oil and gas exploration in the North Sea. In fact, analysis from Offshore Energies UK has indicated that the UK may be 80 pecent reliant on other countries’ gas and 70 percent of other nations’ oil by 2030.
Norwegian gas nominations to Britain had also dropped by 15 million cubic metres (mcm) per day to 55 mcm that week in August. Christos Anagnostopoulos, Commodities Analyst at Aurora Energy Research, said: “Ongoing planned maintenance at the Kollsnes processing plant (in Norway) and Troll field until the end of August, and increased residential and power-sector demand in the UK and continental Europe have also contributed to higher prices.”
Meanwhile, the UK is still keeping faith in Norway to deliver its gas, clearly a more reliable alternative to Russian supplies despite the slight drop in August. It comes after Centrica struck a deal in June which secured enough additional gas from Norway to heat 1.5 million British households over winter.
The deal struck with Equinor may be able to “ease the pressure and provide some more certainty ahead of what may be a difficult winter”, Centrica’s CEO Chris O’Shea has claimed. Chancellor Kwasi Kwarteng, who was Businesses Secretary at the time, said the deal would “help underpin British energy security over the next few years, and also reinforce our partnership with Norway as a key international energy ally”.