Particularly considering Russian sanctions and the effect of tariffs, Norway is a crucial supplier of oil in Western Europe. It enjoyed a comfortable trade surplus of $48.4 billion in 2023 in oil, and its oil fund is the wealthiest sovereign wealth fund in the world. Replacing Gazprom after Russia’s invasion of Ukraine in 2022, Norway is Europe’s top gas supplier.

The industry is so dominant, one Norwegian chief executive summarised that the country relies on oil money to escape financial difficulty – an attitude which “breeds complacency and makes us all lazier”. What do we know about this apparent lifeline?

A brief timeline

The 1959 Groningen discovery of oil and gas deposits in the Netherlands resulted in geological research being amped up in Norway. By 1962, exploration in the Norwegian Continental Shelf (NCS) and the North Sea was underway, and with optimism as to what could be found, the country’s government, the Storting, claimed sovereignty over the NCS (the North Sea had to be shared with British and Danish occupants).

The ‘10 oil commandments’ proposed by the Storting in 1972 have informed the trajectory of Norwegian oil today. These commitments include:

• #4: “The development of an oil industry must take necessary account of […] the protection of nature and the environment,” a point which is still largely in focus today.
• #5: “Flaring of exploitable gas on the NCS must not be accepted except during brief periods of testing” remains a differentiator for Norway.” This year, the World Bank found that flaring, the process of burning off natural gas during oil extraction, grew 3 billion cubic metres globally. Flaring intensity in Norway is 18 times lower than in the US and 226 times lower than in Venezuela, making it one of the world’s cleanest oil producers.
• #10: “Large Norwegian petroleum discoveries could present new tasks for Norway’s foreign policy.” Certainly, during this election buildup, Norwegian politicians are positioning themselves and the country as the cleanest and most democratic oil supplier to choose, especially as Russian supply is off the table.

By the 1970s, foreign companies dominated exploration off Norway. Statoil (now Equinor) was created in 1972, and with it, the principle of ‘50 percent state participation in each production license’ – meaning, when the government awarded a license to explore for and produce oil or gas on the Norwegian Continental Shelf (NCS), the state automatically took a 50% ownership stake in the license.

In 1985, this model shifted to a State’s Direct Financial Interest (SDFI) system: instead of Statoil holding all the state’s equity, the government itself took ownership stakes in fields. In 1990, Norway’s oil fund – formally the Government Pension Fund Global (GPFG) – was established as a sovereign wealth fund to invest surplus revenues abroad, protecting the mainland economy from overheating and ensuring benefits for future generations.

When Statoil was partially privatised and listed in 2001, responsibility for managing the SDFI was handed to Petoro, a wholly state-owned company.

By the end of 202, the SDFI comprised interests in 183 production licences, 44 producing fields, and 16 joint ventures covering pipelines and onshore plants. Net cash flow from the system in 2025 is forecast at about Norwegian Krone (NOK) 254.2 billion. The Norwegian government holds a 67% stake in Equinor (1.7 million shares).

Oil, politicised

Oil is not the primary topic on the Norwegian electorate’s mind: that place is held by inequality, pocketbook issues, and cost of living. But the issue spills into election discourse over the environment and Israel.

Norway’s biggest parties – the Labour Party (Arbeiderpartiet), the Conservative Party (Høyre) and the Progress Party (Fremskrittspartiet) – frame oil and gas as central to economic security. In terms of issuing new licensing, Paris-agreed commitments, and approving new developments, these parties are misaligned with the promises required for a just transition.

Additionally, in response to ethical assessment and popular discontent, on 25 August, Norway’s $2 trillion oil fund – the world’s largest sovereign wealth fund – sold out of Caterpillar, the manufacturer of construction equipment, over allegations of Caterpillar’s involvement in Israeli violations of international humanitarian law on Palestinian property. The oil fund also sold out of five Israeli banks involved in West Bank settlements.

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Prime Minister Jonas Gahr Støre’s Labour Party, which returned to power in 2021, seeks to continue its tenure. After eight years under Conservative-led governments, Labour now heads a minority administration backed by the Socialist Left and the rural-focused Centre Party.

Oil doesn’t have a direct and tangible impact on everyday life. But Norway’s trade in and production of this crucial commodity will be invariably shaped by the party which takes power, defining exactly the future of oil trade on the continent.