Norway: Oil and gas workers strike amid energy shortage

Norwegian offshore oil and gas workers went on strike Tuesday. The stoppage could reduce the country’s gas output by almost a quarter and intensify supply chain shortages due to Russian gas boycotts by EU nations. 

“The strike has begun,” Audun Ingvartsen, the leader of the Lederne trade union told Reuters. 

Members of Lederne are demanding wage raises commiserate with rising inflation. The work stoppage is already having resounding effects on the Norway’s oil output.

Equinor, Norway’s largest gas producer and the second largest in Europe, initiated a safe shutdown of three oil fields due to the strike, the operator confirmed on Tuesday. Another 117 employees are schedule to go on strike in three other oil fields on Wednesday if labor negations are not reached.

“They need to see what will happen if they don’t talk to us,” said Ingvartsen.

What consequences might the strike have? 

The Norwegian Oil and Gas Association said that an extension of the strike from Saturday could affect almost 60% of gas exports.

From Wednesday, the strike would result in a loss of oil production of 130,000 barrels per day and a loss of gas exports of 292,000 barrels of oil equivalent a day, the organization said.

However, Equinor said that “consequences of this escalation are not yet clear.” 

The Norwegian Labor Ministry said that it is following the dispute closely. The country’s government can step in and stop strikes in extraordinary circumstances.

Union leader Ingvartsen said that he hopes talks will resume soon adding that the escalation was not designed to pressure the government to intervene and impose a settlement.

A reduction in oil and gas flows from Norway could intensify the global gas shortage.

How important is oil and gas from Norway?

Norwegian oil and gas supplies have become more crucial than ever amid Russia’s ongoing war in Ukraine. 

The EU obtained as much as 40% of its gas from Russia prior to the war. Global boycotts by EU nations of gas supplies from Moscow have led to gaps in the global gas market. 

Russia also reduced gas deliveries via Nord Stream 1 to around 60% in recent weeks, citing a technical problem as the source of the reduction. 

Fears of increasing supply shortages drove gas prices in Europe to a four-month high on Tuesday.

This price increase could have a resounding effect on inflation as well as the value of the euro which sank to a two-decade low versus the dollar following a surge in natural gas prices. 

asw/rt (dpa, Reuters)

Article source: https://www.dw.com/en/norway-oil-and-gas-workers-strike-amid-energy-shortage/a-62366705?maca=en-rss-en-all-1573-rdf