One man’s loss may be another’s unfortunate gain, and the Ukraine conflict is proving a boon to some energy-producing nations as oil prices soar.
The war has given an unexpected boost to Norway’s oil revenues and now the country, concerned it will be seen as a war profiteer, is mulling what to do with its sudden windfall.
Fueled by the sanctions imposed on Russia after its invasion of Ukraine, the surge in oil and natural gas prices could see Norway racking up almost $170 billion in extra oil and gas revenue this year, according to Nordea bank.
Western Europe’s biggest oil and gas exporter and one of the richest countries in the world, Norway could pocket nearly $5,680 more than expected every second of the day without lifting a finger.
But the boon is giving it a guilty conscience.
“There are times when it’s not fun to make money, and this is one of them, given the situation,” said Petroleum and Energy Minister Terje Aasland in an interview with television channel TV2.
Most of Norway’s oil revenue ends up in the state’s coffers, through taxes, dividends and direct holdings in oil and gas fields, which it then places in its sovereign wealth fund, already the world’s biggest.
The fund has suffered from the global stock market falls in recent weeks but is still worth around $227,000 for each of Norway’s 5.4 million inhabitants.
“Norway cannot escape the unpleasant fact: This is a form of war profit,” the daily Dagbladet wrote in an editorial.
“While Ukraine is being destroyed, and most other countries are mainly feeling the negative effects of the war, such as higher energy prices, higher food prices and general inflation, we are making a gain,” it said.
“This must be reflected in the way we think about the use of money,” it added.
Multiuse Marshall Plan?
Many want to see a redistribution of all or part of the war gains.
Norway’s Green Party has called for the billions of additional petrodollars to be placed in a solidarity fund to be used as a sort of Marshall Plan for various needs.
It could be used to finance both humanitarian aid and the reconstruction of Ukraine, help Europe reduce its dependence on Russian gas and help the poorest countries counter soaring costs for energy and food, the party suggested.
“The extra oil revenue from the war should go to Ukraine, not us,” it said.
The center-left government has so far pledged up to $227 million in humanitarian aid to Ukraine.
Prime Minister Jonas Gahr Store has insisted that Norway can help most by supplying as much gas as possible to Europe to help reduce its dependency on Russia.
Norway covers between 20% and 25% of the European Union’s and Britain’s needs via a vast network of gas pipelines, compared with between 45% and 50% for Russia.
European Climate Pact ambassador Paal Frisvold meanwhile suggested that Norway should forgo the profits and cap the price of gas sold to European countries, which are just emerging from the pandemic, some with heavy debts.
“Our profits are the invoices of others,” he told AFP.
“The most important thing is to show solidarity, to display leadership at a historic moment. My kids are going to ask me, ‘Dad, what did Norway do during the Ukraine war?’ I don’t want to tell them that we made a killing,” he said.
Norway’s government, which is currently drawing up its spring budget, said there was currently no plan for such a cap.