Financial Times: Time for Europe to ask Norway to cut gas prices

The Financial Times said Norway’s role has clearly highlighted the energy crisis by making up for the shortfall in Russian gas supplies, but the paper said it was time to demand more.

The newspaper states that “in the midst of the gas crisis, Norway’s star has risen … It has taken the lead and has done its best to keep the lights on all over Europe as it has increased its production to offset potential supplies from Russia.”

“But since Russia publicly began cutting exports in June, the price of gas has more than doubled. It clouded a lot. Even the factories were silent. to do more, that would probably be a beating. “One day this will be fantastic, but Norway must agree to lower the selling prices of its gas.”

“Before protests erupt from Oslo and before market economists complain, it must be said that this is not an official proposal, but rather opinions whispered privately by senior oil and gas executives from outside of Norway, and since this is They should get to know her.”

As the Financial Times explains about the crisis, they say that Europe, whether it likes it or not, is in fact embroiled in an economic war because of the Russian invasion of Ukraine.

He continued: “The biggest obstacle that can stop European support for Kyiv… is turning the energy crisis into an economic crisis and diverting the attention of Western voters to domestic affairs. Not only are gas prices already high, but they have quickly become an economic weapon.”

And he adds: “Norway makes a lot of money selling gas at a price equivalent to $400 per barrel of oil, this figure is so huge that it is incomprehensible, but no matter how high the profit, it does not count.” Norway’s interest is to look at its neighbors, who are falling one by one into the morass of deep economic recession, or to see how Russia’s courage has increased to the point that it is moving closer to the borders of the European Union.

And he continues: “Difficult figures leave a mark on the soul, so we will put some of them. The largest share of Norwegian gas goes via pipeline to Europe, and this is about a quarter of the supply of the European continent. While the share of the UK in this gas alone is 40 percent of Norwegian gas.”

And he adds: “In May, the Norwegian government expected that its oil and gas revenues for this year would reach 100 billion euros, and we are talking about a country with a population of no more than 5.4 people, which means that per capita is around €18,000, more than the UK government’s total government spending per capita in 2020/21.

“Since then, gas prices have doubled, and today it is trading at 10 times the average price over the past decade. It is clear that Norway has a large financial space. By comparison, oil and gas revenues last year were less than 30 billion euros. year,” she says.

If Oslo agrees to cap prices at the equivalent of $150-$200 a barrel, that would in turn top the average Norway reached in the first half of this year, when government-backed energy giant Equinor was able to record record profits. It is true that this price level is still painful, but European economies have to endure it.”

Economist Aslak Berg believes that “any price reduction would be difficult to accept Oslo politically, but the shift is nonetheless interested in contributing to the stability of the European economy and support for Ukraine. The expert considered that “an option that could make sense for both sides is a commitment “with long-term contracts at prices well below the current price, but well above the historical average.”

“It is not easy to find a magic solution, on the other hand, it is important that prices in the European gas market remain high in order to attract the necessary LNG shipments before it goes to Asia. stability under the influence of market factors,” she says.

The newspaper says: “Norway, in turn, is vulnerable to fluctuations in the global economy caused by volatile energy prices. This risk exists more than some might think. Norway’s $1.2 trillion Sovereign Wealth Fund lost 14.4 percent in the first half of this year. per year, which is 174 billion dollars. dollars, which is more than the government can get from record oil and gas prices.”

Norway also acknowledges that there is a threat to long-term gas demand due to the crisis. Therefore, it is ready to build the energy economy of the future based on renewable energy sources (offshore wind and hydrogen), as well as in close cooperation with its neighbors. High-level executives in Norway have been open about their fears of being seen as “Norway First,” according to the Financial Times.

“It is very important for Europe not to fall into the trap of appropriating its national resources and turning its back on its neighbors, because that would be in Putin’s interests. No one should suggest considering Norway as a beneficiary of the crisis and forgetting its contribution. Energy security of Europe. But it’s worth it at least. Discuss what can be done to lower prices.

“Maximum use of space and ensuring maximum flow is welcome. Doing so at a price that helps alleviate the suffering of the European economy may also be in Norway’s interest.

Source: RT

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