Norway strike could cut oil and gas output by quarter

An escalating strike by oil workers in Norway could potentially cut output from western Europe’s biggest oil and gas producer by almost a quarter, operators said on Thursday. However, the union added that a resolution was possible.

The dispute, which began on September 30 halted any prospects of price rises on the international oil market, with benchmark Brent Crude traded up 1.5% on Thursday.

News about the strike has also helped to keep Brent above $42 per barrel in recent days.

Norway’s government, which can intervene if a strike is considered a national emergency, said it was up to the two sides to resolve their differences. The parties involved have exchanged proposals on Wednesday and will discuss them on Thursday, the striking union said.

Six offshore oil and gas fields shut down on October 5 as Lederne ramped up the strike, cutting output capacity by 8%, or around 330,000 barrels of oil equivalent per day (boepd), the Norwegian Oil and Gas Association (NOG) said.

The strike could also affect fourth-quarter earnings of oil companies worldwide, with Equinor, Aker BP and Lundin Energy likely to see reduced income per share of 4-6% in the case of a 10-day strike, brokerage Sparebank 1 Markets said.