US and Norway are profiting embarrassingly from war in Europe

US and Norway are profiting embarrassingly from war in Europe

Ukraine conflict is proving a boon to some energy producing nations as oil and Gas prices soar.

Norway expects around €94 billion in net income from its petroleum industry this year, that’s up from €29 billion a rise of €65 billion in profit from last year up 324 percent.

Norway’s sovereign wealth fund, which manages the country’s petroleum earnings, has a current value of around €1.2 trillion, or around €250,000 per citizen.

That flood of money is becoming both domestic and foreign political problems.

The Nordic state’s centre-left government — made up of the Social Democrats and Centre Party — says it has shown solidarity with a 1.4 billion cubic meter production hike at three key fields in March, which is sending more gas to the EU. It argues Norway shouldn’t be blamed for market forces beyond its control.

“Norway cannot escape the unpleasant fact: this is a form of war profit”, 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.”

However, Norwegian opposition MP Rasmus Hansson has a harsh message for his country’s government: The war in Ukraine isn’t a fair reason to demand higher gas prices.

Hansson, a former leader of the Norwegian Green Party, isn’t buying the government’s argument.

He called it “morally wrong” to profit from price rises driven primarily by war and argued that Norway also risks damaging relations with key European trading partners by forcing them to pay such high gas prices.

Too much money?

“We think Norway is being short-sighted and too selfish,” Hansson said in an interview in his office overlooking the parliament in the capital Oslo. “We are getting a windfall profit which is very big, but the question is does that money belong to us as long as the most obvious reason for that price increase and that extra income is the disaster that has befallen the Ukrainian people?”

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.

Hansson wants to see the extra money go into a solidarity fund that would be used to rebuild Ukraine after the war. He said experts should set what should be considered a “normal” gas price and everything above that should be seen as war profits and given away. 

Brussels has a similar idea. During an emergency summit of EU energy ministers last week, several countries called for setting a price cap on all gas coming into the EU; the European Commission wants such a measure directed only against Russia.

On Wednesday, Commission President Ursula Von der Leyen said she was discussing a “task force” with Norway to look at “how are we able to lower, in a reasonable manner, the price of gas.”

So far Norway isn’t biting. Norwegian Prime Minister Jonas Gahr Støre has repeatedly said he would not back a price cap on gas exports.

Hansson is also finding it difficult to get much traction for his idea in the Norwegian parliament, where his party, which only holds three of 169 seats, has met resistance from both the government and other opposition parties.

But in other corners of Europe, his argument is beginning to resonate.

Norway should share the “gigantic” profits it has made as a result of higher oil and gas prices, especially with Ukraine, Polish Prime Minister Mateusz Morawiecki said earlier this year.

Teresa Ribera, Spain’s minister for ecological transition, recently called the prices being paid to Norway for gas “disturbing.”

In written comments to POLITICO, Norwegian Foreign Minister Anniken Huitfeldt said Europe is facing a supply crisis, and Norway’s primary duty is to pump more gas.

“Norway has been asked by the EU and our European partners to step up its production to cover as much of the shortfall from Russia as we can and we have done our utmost to do so,” Huidfeldt said.

She said Russia has deliberately distorted gas prices by shutting off supplies to Europe and was seeking to harm European consumers as part of its war against Ukraine. Norway and its European customers have a shared interest in “normalizing the prices and ending the distortion of the energy market,” she said.

Huidfeldt said there were “many suggestions under discussion” but declined to say what those ideas were or which she favoured.

“I’m hesitant to go into specific proposals at this time,” Huidfeldt said. “One should carefully evaluate the implications of different measures so that the result is not a reduction of supply or less focus on energy savings.”

Merry Norwegians

So far neither the cash influx nor the increase in gas prices seems to be worrying many Norwegians.

The government will allocate about €1 billion for a scheme that pays 90 percent of household electricity bills when wholesale prices rise above prescribed levels.

Meanwhile, the wider economic outlook also appears comparatively benign, with unemployment around 3 percent and house prices still ticking up despite higher interest rates.

On the streets of Oslo, war and Europe’s energy crisis seem a long way away.


James Montgomery Flagg-Uncle Sam With Empty Treasury 1920.

You have to wonder why the EU is not asking the US to put their LNG excess profits into rebuilding Ukraine. The US are cashing in on high European fuel prices Belgium, for example, saw its U.S. imports of LNG swell by some 650% while Pakistan saw its U.S. imports decline by 72%, data showed.

Benchmark gas prices in Europe have averaged $34.06 per million British thermal units (mmBtu) so far in 2022 compared with $29.99 in Asia and $6.12 in the United States.

That compares with average 2021 prices of $16.04 in Europe, $18.00 in Asia and $3.73 in the United States, data showed.

“The cargoes are going to go where the market demands it will go,” said Ed Hirs, an energy economist at the University of Houston.


The February invasion by Europe’s top gas supplier has pushed already-high energy prices to records and prompted the EU to pledge to cut Russian gas use by two-thirds this year by hiking imports from other countries and boosting renewable energy.

Despite the unexpected increase from the United States, the EU still finds itself in a precarious position heading into the high-use winter season as Russia continues to threaten to withhold gas supplies. read more.

The EU urged member states to cut gas usage by 15% until March as an emergency step. read more

Biden and European Commission President Ursula von der Leyen also announced a plan to form a task force to cut Europe’s reliance on Russian fossil fuels, including gas.

The Commission is set to ensure that the EU is able to receive about 50 bcm of additional U.S. LNG until at least 2030, and the U.S. is on pace to exceed that number this year.

But, analysts say the shift of U.S. cargoes will not last, as Asian and South American prices rise to attract more cargoes and clients seek court action to demand deliveries on contracts.

“The really brutal and harsh reality is that Europe is pricing out large parts of the emerging markets. In the long term, this is not sustainable and it’s already causing energy shortages in south Asia,” Gloystein said.

“Something has to give,” he added.

Support Labour Heartlands

Help Us Sustain Ad-Free Journalism

Sorry, I Need To Put Out the Begging Bowl

Independent Journalism Needs You

Our unwavering dedication is to provide you with unbiased news, diverse perspectives, and insightful opinions. We're on a mission to ensure that those in positions of power are held accountable for their actions, but we can't do it alone. Labour Heartlands is primarily funded by me, Paul Knaggs, and by the generous contributions of readers like you. Your donations keep us going and help us uphold the principles of independent journalism. Join us in our quest for truth, transparency, and accountability – donate today and be a part of our mission!

Like everyone else, we're facing challenges, and we need your help to stay online and continue providing crucial journalism. Every contribution, no matter how small, goes a long way in helping us thrive. By becoming one of our donors, you become a vital part of our mission to uncover the truth and uphold the values of democracy.

While we maintain our independence from political affiliations, we stand united against corruption, injustice, and the erosion of free speech, truth, and democracy. We believe in the power of accurate information in a democracy, and we consider facts non-negotiable.

Your support, no matter the amount, can make a significant impact. Together, we can make a difference and continue our journey toward a more informed and just society.

Thank you for supporting Labour Heartlands

Just click the donate button below