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Norway Isn’t Worried About An Oil Buying Cartel

Norway isn't worried about The EU's plan to join together to purchase natural gas from global markets, the country's oil and energy minister said on Friday.

The natural concern would be, of course, that a group of countries rallying together to collectively purchase natural gas would effectively act as an oil-buying cartel that could exert extended influence in the global markets.

Norway's oil and energy minister Terje Aasland told reporters on Friday that the arrangement could actually benefit Norway's energy companies through "negotiations on a commercial basis."

Twenty-two of the 27 EU member states have shown an interest in collaborating with other member states for gas demand.

Norway is now Europe's largest natural gas supplier after replacing much of the supplies that were previously coming from Russia.

The EU's buyers group is prepared to offer its first tender for gas supplies next month on the international market following months of discussions on how to secure gas supplies without unwittingly jacking up the price by competing with each other.

The EU and the four neighboring countries will need 24 billion cubic meters of natural gas over the next three years-a significant amount of gas to purchase on the spot market without causing a spike in prices.  

"I believe we're creating a new system that will increase competition and bring in new suppliers and push energy prices down. Since we started this exercise, there's enormous interest from international suppliers," European Commission Vice President Maros Sefcovic said earlier this month.

Norway was criticized last year for profiting from Europe's desperate need for gas as it tried to move away from Russian supplies, as Norway's income from natural gas was expected to balloon to $109 billion in 2022-an $82 billion increase from the year prior. Norway rejected the profiteering accusation, saying that its profits were merely a result of market scarcity.

By Julianne Geiger for Oilprice.com

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Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More