Norway slow to cut its oil production

Norwegian officials including new Oil & Energy Minister Tina Bru were still “evaluating” on Tuesday whether they’ll cut the country’s offshore oil production, even after OPEC and several other oil-producing nations agreed to their own cuts over the weekend. Oil prices ended up falling again on Tuesday, as did the value of Norway’s currency, after widespread criticism that the cuts already agreed aren’t big enough.

Norway is not a member of OPEC and hasn’t voluntarily cut production for nearly 20 years. The double impact, however, of a dive in demand for oil because of the global Corona virus crisis and a recent price war between Saudi Arabia and Russia led to a collapse in oil prices that worries Norway as much as other oil nations. With too much oil on the market and very little demand, it would also be in Norway’s best economic interests if oil prices rose.

Instead they fell again on Tuesday, confirming analysts’ and economists’ criticism that the so-called OPEC+ cuts over the holiday weekend simply aren’t big enough. Even though the Oslo Stock Exchange started its trading week on an upswing for a change, with its main index up 1.62 percent by early afternoon, the price of a barrel of Norway’s North Sea crude opened down. By late Tuesday morning, it was trading at USD 31.42, just half the price it commanded before the Corona crisis brought most of the world to a standstill.

Bru issued a statement on Saturday after taking part Friday in an extraordinary meeting of energy ministers that was organized by the G20 countries. She noted how the G20 countries had agreed on the importance of ongoing access to reasonably priced energy, and claimed “the whole world” was “standing together” in efforts to “get the oil market in balance again.” Bru also noted how the recent steep fall in economic activity and oil consumption, as a result of Corona containment measures, “also hits activity on Norwegian oil fields and our advanced oil supply industry.”

“During the meeting I said that Norway will evaluate a unilateral Norwegian cut in oil production, on the assumption that an agreement between OPEC+ countries on production cuts is carried out,” Bru stated. She added that the G20 meeting provided “important context” but stopped short of revealing how any production cuts might be carried out in Norway, or how large they might be.

Bru told Norwegian Broadcasting Monday afternoon that the government was “a step closer” to a decision on production cuts” and that it “was good” the OPEC+ countries had reached an agreement.

Norway’s oil production in February, before the coronavirus crisis exploded in Europe and the US, amounted to around 1.75 million barrels a day. After adding in natural gas liquids and condensate, production is equivalent to around 2.1 million barrels a day. The US is now the world’s largest oil producer, followed by Saudi Arabia, Russia, Canada, China, Iraq, the United Arab Emirates, Brazil, Iran, Kuwait and Norway.

More on this subject: Coronavirus

Similar articles

  • UK, 6 EU countries stop fossil fuel exports funding

    UK, 6 EU countries stop fossil fuel exports funding

    UK and six EU countries vowed to stop providing guarantees, related to all projects linked to exports of fossil fuels, Reuters reported. The initiative includes Britain, Germany, France, The Netherlands, Denmark and Sweden. Official representatives of governments in London, Paris and Berlin are expected to seal formally the pact on Wednesday, French Finance Minister Bruno Le Maire said. The intended deal includes halt of all public export guarantees.

  • Siemens eyes a slice of massive US budget cake

    Siemens eyes a slice of massive US budget cake

    The German engineering conglomerate Siemens has expressed expectations to receive some of the funds, envisaged for economic revival by US President Joe Biden, Reuters reported. Biden had announced generous plans to address the economic slowdown, caused by the pandemic by targeting massive funds to infrastructure restoration and development. The infrastructure spending is seen reaching as high as $2.3 trillion.

  • Shell sees a fall in Q1 fuel sales

    Shell sees a fall in Q1 fuel sales

    Royal Dutch Shell announced it expected a significant drop in fuel sales in the first quarter of 2021, Reuters reported. The world’s biggest fuel retailer expects a very slow recovery of the markets undermined by Covid-19 lockdowns in major industrial countries. In a trading update, Shell said it saw refined oil product sales at 3.7-4.7 million barrels per day (bpd) for the first quarter of 2021, compared with just under 4.8 million bpd in the last quarter of 2020. It had previously forecast sales of 4-5 million bpd.