Norwegian government intervenes to end oil and gas strike

The Norwegian government said, based on the announced strike figures, it was feared that more than half of the country’s daily gas exports would have been lost by the weekend.

Joe Klamar | Afp | Getty Images

European gas prices fell from their highest level in four months on Wednesday after the Norwegian government intervened to end an oil and gas strike that threatened to exacerbate the region’s escalating energy crisis.

The first month gas price on the Dutch TTF hub, a European benchmark for natural gas trading, was last traded 2.5% lower at 161 euros ($164.6) per megawatt hour. The contract briefly climbed above €178 per megawatt-hour amid mounting supply fears in the previous session, reaching its highest level since early March.

The Norwegian government late Tuesday proposed “mandatory wage arbitration” to effectively end union action by offshore workers.

“The announced escalation has crucial implications for the current situation, both with regard to the energy crisis and the geopolitical situation facing war in Europe,” Labor Minister Marte Mjos Persen said in a statement.

Under Norwegian law, the government can intervene under certain conditions to force parties in a labor dispute to a wages committee that decides on the matter.

“The parties are generally responsible for finding a solution in such cases. But when the conflict can have such far-reaching social consequences for all of Europe, I have no choice but to intervene in the conflict,” Persen said.

Offshore oil and gas workers quit their jobs on Tuesday, with the Lederne union citing frustration at the continued decline in purchasing power for its members.

The stoppage resulted in the closure of three fields and further strike actions were scheduled for both Wednesday and Saturday.

The Norwegian government said, based on the announced strike figures, it was feared that more than half of the country’s daily gas exports would have been lost by the weekend.

The proposed wages committee to resolve the dispute between Lederne’s union and the Norwegian Oil and Gas Association now means that both sides have agreed to end the strike.

It comes as European governments are scrambling to fill underground storage with natural gas deposits in an effort to provide households with enough fuel to keep the lights on and homes warm in winter.

Russian state-backed energy giant Gazprom is poised to temporarily shut down the Nord Stream 1 pipeline – the European Union’s largest piece of gas import infrastructure – next week for annual maintenance. The closure has fueled fears of further supply disruption.

The EU, which receives about 40% of its gas through Russian pipelines, is rapidly reducing its dependence on Russian hydrocarbons in response to President Vladimir Putin’s months-long attack in Ukraine.

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