Norwegian government calls off oil and gas strike

The Norwegian government intervened to end a strike from oil and gas workers who have threatened to cut production at a time when Europe is scrambling for supplies to offset Russian output cuts.

Norwegian Labor Minister Marte Møs Persen summoned oil companies and workers late on Tuesday and then announced that the strike action had ended.

The strike cut gas supplies to the UK and much of mainland Europe and sent gas prices soaring to their highest level in four months. The Norwegian government has the right to intervene in labor disputes under certain conditions. It was estimated that the strike would reduce gas production in Norway by almost 60 percent by the weekend.

“When a conflict can have such great social consequences for the whole of Europe, I have no choice but to intervene in the conflict,” Persen said in a statement.

“It is unjustified that gas production should stop to such an extent.

Ledern union leader Audun Ingwartsen told Reuters workers would “return to work as soon as possible”.

Workers threatened to escalate shutdowns at oil and gas fields during the week, with gas transmission system operator Gassco warning on Tuesday that Norwegian supplies to the UK could be completely cut off at the weekend.

While relatively low demand for gas in the summer months meant immediate shortages were unlikely as a result of the strike action, there were fears it would further hamper Europe’s efforts to fill gas storage ahead of what is expected to be a tough winter.

Russia, which before the invasion of Ukraine supplied about 40 percent of Europe’s gas, has cut supplies in recent weeks, cutting capacity on the key Nord Stream 1 gas pipeline to Germany by 60 percent.

Any loss of Norwegian supplies would hamper already challenging efforts to fill storage facilities, with Europe facing the prospect of gas and distribution shortages this winter.

Norwegian Ministry of Foreign Affairs it said in a statement after the strike ended, that the country “must do everything in its power to help maintain European energy security and European cohesion against Russia’s war”.

The UK is sending as much gas as possible via pipelines to Belgium and the Netherlands, including surplus supplies from Norway and supplies to the UK in the form of seaborne LNG shipments.

Norwegian oil and gas workers went on strike over concerns about below-inflation wage increases at a time when oil and gas companies are making record profits from soaring prices.

The dispute will now move to what the Norwegian government has called a “compulsory wage council”.

The UK government has said it is confident the country will have sufficient gas supplies, but has faced pressure from industry concerned about potential shortages this winter if Russia completely diverts flows to Europe.

The UK’s energy-intensive group of manufacturers such as steel and chemicals is due to meet Kwasi Kwarteng, the business secretary, on Wednesday and said it was seeking more clarity on whether the industry could face gas restrictions this winter .

The business department highlighted the UK’s “diverse” range of supply options, including imports from Norway and having the second largest LNG import capacity in Europe, as well as local production in the North Sea.

Norway became the UK’s biggest supplier last year, overtaking local production for the first time.

Countries in continental Europe have already urged households and industry to reduce their use in case Russia cuts off gas exports to the continent, but the UK government has so far played down concerns.

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