Norway Rakes in Record Oil and Gas Revenues Amid Ukraine Conflict

The exorbitant windfall revenues amid a surge in demand and sky-high energy prices have earned Norway bitter accusations of profiteering from its numerous customers, including Germany, Poland and the EU at large.

The Norwegian state coffers earned record oil and gas revenues last year after the hostilities in Ukraine and ensuing sanctions sent energy prices soaring, Statistics Norway (SSB) reported.

Altogether, Norway earned NOK 1.5 trillion ($140 billion) in revenues from oil and gas, by far the highest ever recorded, according to statistics, and nearly three times the NOK 498 billion ($48 billion) earned in 2021, the number-cruncher said.

Norway, one of the world's leaders in the export of energy resources, assumed the role of the EU's top supplier following the bloc's massive sanctions campaign against Russia over its special op in Ukraine. In 2022, Brussels decided to stop imports from Russia and the Nordic country ramped up own production.

Oslo's additional income was boosted by a record surge in European gas prices over the summer, which have since subsided.

Increased export revenues from energy amid a surge in demand and sky-high prices resulted in a massive trade balance surplus of roughly $162 million in 2022, a level never observed in Norway before. The current account surplus almost tripled compared to 2021.

The unheralded revenues have earned Norway accusations of mercantilism from its numerous customers, including Germany, Poland and the EU at large, all of which have been buckling under the dual burden of exorbitant energy prices and runaway inflation. Oslo has firmly rejected the label of a "war profiteer" and claims to be merely fulfilling its market obligations. Inside Norway, calls have been made for Oslo to "give away" the billions of dollars made in profits from the conflict. So far, Norway has pledged NOK 75 billion (over $7 billion) in civil and military aid to Ukraine over the next five years in a bid to boost its image among its less-fortunate European peers.

Earlier in February, US journalist Seymour Hersh suggested that the Nord Stream pipelines were blown up in a joint sabotage mission performed by Washington and Oslo, with the Pentagon and Norwegian authorities denying any involvement. No matter who's to blame for the pipeline's destruction, countries relying heavily on Russian supplies, such as Germany, emerged as clear losers, whereas exporters such as Norway ended up in the black.

The Norwegian state earns revenues from the country's oil and gas reserves through taxes imposed on oil companies, its direct holdings in oil and gas fields and infrastructure, as well as dividends paid by the energy giant Equinor (formerly known as Statoil), in which it holds a 67 percent stake.

North Sea oil and gas were discovered in the 1960s and have since become pillars of the Norwegian economy. However, with North Sea oil production having reached its peaked, disagreements over the exploration in the Arctic's sensitive environment have emerged, backed by international concerns over the use of fossil fuels and their effect on the climate change. This casts a shadow of doubt over the future of Norway's oil and gas sphere, as its own energy giant Equinor has launched a raft of sustainable projects tapping into alternative energy sources such as wind power and drawing accusations of "greenwashing."