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With the Norwegian camp getting back into production, the forecast drop in about half of the nation’s daily energy production can be averted.
The Norwegian government through Marte Mjøs Persen, the Minister of Labor and Social Inclusion has intervened in the newly hatched industrial strike action between the trade union Norwegian Organization of Managers and Executives (Lederne) and Norwegian Oil and Gas in connection to this year’s wage settlement.
The strike action commenced on Monday, and the parties involved expressed their interest in escalating the operational shutdown for extra days on the 6th and 9th of July respectively. Amidst a highly polarized energy supply crisis rocking the European Union following the strain in production after Russia invaded Ukraine, the strike by the energy workers in Norway will only exacerbate the entire situation.
“The parties have been unable to reach a solution. I have therefore proposed compulsory wage arbitration. The announced escalation has critical implications in the current situation, both in relation to the energy crisis and the geopolitical situation we’re facing with the war in Europe,” the Minister said in a statement.
Per the statement from the ministry, both parties have agreed to the compulsory wage arbitration and there is an expected push to return to work by all workers who had previously left their posts.
Considering what was at stake, Minister Marte had to step in in a bid not to strain the energy reliance of the entire European Union on Norway.
“The Ministry of Foreign Affairs emphasises that Russia’s offensive war against Ukraine has had a major impact on security of supply in many European countries. There is an immediate risk of additional energy shortages in Europe. A reduction in Norwegian gas deliveries will worsen the energy crisis, in addition to the inherent political, financial, and societal consequences. Norway must do everything in its power to bolster European energy security and European solidarity against Russian aggression,” Marte added.
Norwegian Truce Forces Gas Prices to Fall
The temporary truce that was brokered by the Norwegian Labor Minister has stirred a very massive influence on the current price of gas and oil products within the EU in general.
At the moment, European gas prices are considerably trading below their 4-month high recorded a few days ago. The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas, is currently trading 2.5% lower at 161 euros ($164.6) per megawatt-hour per a CNBC report.
The growing complications in the energy supply to the EU are about to get complicated with Gazprom, the Russian government-backed energy giant on track to close the Nord Stream 1 pipeline for maintenance next week. The Gazprom-owned pipeline is the largest importer of natural gas to the EU, and such a pause could have a devastating effect on the energy supply within the bloc.
However, with the Norwegian camp getting back into production, the forecast drop in about half of the nation’s daily energy production can be averted.