https://newleftreview.org/sidecar/posts/oil-futures?pc=1718
Lukas Slothuus
27 November 2025 Politics

At the beginning of the year, Norway looked set to elect the most right-wing government in its history. The right-populist Progress Party was surging in the polls while the centre-left government was in disarray, with the Centre Party withdrawing from the Labour-led coalition after a row over further integration into European energy markets. Yet in the parliamentary elections of 8 September, the incumbent Labour Party staged a recovery – clinging onto power with a slightly increased vote share of 28 per cent. Jonas Gahr Støre now leads a second government, this time principally supported by the Red Party, Socialist Left and Greens, which won a combined 16 per cent, rather than its erstwhile coalition partner, which collapsed to 6 per cent. On the right, power shifted to the more radical Progress Party, led by Sylvi Listhaug, nearly doubled its share to 24 per cent, overtaking Erna Solberg’s Conservatives, which dropped to 15 per cent. According to its own post-election evaluation, the Conservatives – who ruled from 2013 to 2021 – were punished in part for not having a sufficiently distinct platform to the Progress Party, with whom they faced the widely unpopular prospect of governing in coalition.

Both Labour and Conservatives ran on the same set of issues: welfare, the cost of living, national security. In the televised debates, the urban-rural divide was high on the agenda – a perennial subject in a country with the lowest population density in mainland Europe. The Conservatives campaigned for increased privatisation of healthcare to cut waiting lists, and tax cuts, even for the rich; Labour’s headline pledges were a hospital waiting list cap, cutting the cost of nursery fees and a fixed-price electricity scheme. On national security, meanwhile, the parties were united in preaching loyalty to NATO, full-throated support for Ukraine and a large-scale increase in military spending. Indeed, Labour – whose finance minister is former NATO chief Jens Stoltenberg – has made NATO membership a red line for any coalition with the left parties, and Støre’s government last year pledged to double the defence budget, touting the proposal as a ‘historic boost’.

Militarism was the ‘cause above all causes’ in the election according to Aftenposten, Norway’s paper of record. Bordering Russia in the Arctic, the spectre of the Cold War looms large in a country that once refused permanent foreign bases or the stationing of nuclear weapons on its soil to avoid antagonising the USSR. Tensions with Russia rose after a significant increase in American troops from 2018 and bomber planes were stationed in 2021. Norway is now set to be a maritime stronghold for NATO in the strategically vital gap between Greenland, Iceland and the UK, as well as the broader North, Norwegian and Barents Sea area.

Unsurprisingly, the Progress Party joined calls for an expanded military. The party achieved its best ever results, successfully attracting voters dissatisfied with the establishment parties and disaffected younger votes, particularly men. It has taken over a decade for the Progress Party to fully recover from the 2011 Utøya terrorist attack, in which Anders Breivik, a former member, killed 77 members of Labour’s youth wing AUF. Its impact has begun to fade from Norwegian politics, though the memory resurfaced weeks before the election when a far-right supporter murdered Ethiopian-Norwegian nurse Tamima Nibras Juhar. Though the Progress Party is vociferously anti-migration, the issue was less prominent in their campaign than in previous elections. As public opinion warms toward immigrants, the Progress Party has pivoted to a more anti-statist position – low tax, low public spending, low government interference. This includes abolishing the country’s wealth tax. Norway is one of only three European countries to levy a net wealth tax at 1 per cent on everything above £130,000. A significant proportion of citizens want to reduce or abolish it, in part thanks to extensive media campaigns.

The wealth tax was mainly the subject of the right, though the left defended it and advocated for its expansion to address inequality. The top 2,500 households now own as much wealth as the bottom 1.5 million, even as a few billionaires have fled to foreign tax havens. On election day, surveys identified inequality as by some distance the most important domestic issue. In the final count, within the left, voters shifted slightly from the Socialist Left to the more radical Red Party and to the Green Party. The Red Party, founded in 2007, has an uncompromising class-based platform and stands alone in its criticism of NATO membership. It gained 0.6 per cent, up to 4.6 per cent, while the more pragmatic Socialist Left – which in the past has voted to raise the retirement age and reduce corporation tax – dropped 2 per cent. The Greens, another relatively new party, achieved a record result of 5 per cent, positioning them for the first time as informally part of the governing bloc. Having never previously aligned themselves with either the left or right bloc, the Greens successfully pivoted to the left in this election, making headway on the issues of oil and Palestine.

The election saw a wider, successful politicisation by the left of oil – long a taboo subject in Norwegian politics. The centrality of the country’s oil industry can hardly be overstated. When Norway, the UK and Denmark discovered oil and gas in the North Sea in the 1960s and 70s, they opted for markedly different developmental paths. Denmark handed over ownership to a single private company, A.P. Møller-Mærsk. A largely agricultural country with little capital-intensive or high-risk industry, the absence of state-owned enterprises in other sectors of the economy meant there was no precedent or popular pressure for public ownership. Fearing an oil-powered socialist Britain, the Conservatives likewise rapidly allowed private enterprise to snap up the industry, with British Petroleum soon running the show.

Norway chose a different path. State control of oil and gas fit into a political economy spearheaded by a strong industrial sector – mining, metals, fertiliser, timber – with significant state involvement and powerful trade unions. Much of the revenue from some of the world’s largest per capita oil and gas reserves has been captured by the state, deposited in the Oil Fund, the world’s largest sovereign wealth fund. The Fund was established in 1990 not only to socialise the profits from the petroleum sector but to stave off the feared so-called Dutch disease, whereby demand for booming Dutch gas increased demand for the Dutch guilder, which became damagingly strong. By investing oil revenues in the stock market, Norway avoided appreciating the Norwegian krone with its attendant problems for both export-oriented industries and domestic consumption. Successfully navigating the resource curse, Norway’s petro-empire firmly established itself as the sine qua non of the country’s economy, accounting for almost a quarter of GDP and over half of total exports.

Oil is key not only to funding Norway’s welfare state but to sustaining the social compact between state, capital and labour. It employs, directly or indirectly, around 210,000 workers in a country of just 5.6 million people. The interest of the fossil fuel unions in securing decent working conditions in a planet-wrecking industry with massive state and private profits has often been in tension with the urban environmentalist movement, which demands rapid action on climate change but tends to deprioritise redistributive issues. Trade union leader Frode Alfheim, for example, declared in 2023 that ‘Norway has to be the last country in the world to wind down petroleum production’. Oil also plays an outsize role in the national culture. The behemoth majority state-owned petroleum company Equinor is a major sponsor of sports, culture, education and research. Norwegian graduates rank it as their preferred employer. Climate campaigner Erland Eggen has criticised what he calls ‘Equinorsk’: the deeply-rooted idea that Norwegian oil is clean, democratic and necessary.

Recent years have, however, seen sustained activism and political pressure on various fronts. Take the issue of divestment. Left parties, trade unions and social movements have been pressuring Labour to divest Oil Fund assets complicit in the Israeli occupation. This has yielded a series of successes: the Fund has re-evaluated its investments in the Israeli jet engine company, Bet Shemesh; sold its 24 bn NOK (1.8 bn GBP) stake in Caterpillar, which is complicit in house demolitions in Palestine (Trump responded with threats of tariffs and sanctions); as well as stakes in five Israeli banks that finance settlement construction in the West Bank. Earlier this summer, the fund cut ties with external Israeli fund managers and divested from 11 Israeli companies. Following the election, however, Labour has backtracked on its commitment to Oil Fund divestment from Israel. Fearing that big tech companies with business in Israel could be the next targets, Labour has sidelined the left by securing a parliamentary majority with the right to reduce the power of the Council of Ethics.

In the run-up to the election, the left parties took bold positions on the future of the industry. The Greens propose to phase out oil and gas production by 2040 and transition to becoming a green technology powerhouse. The Socialist Left have called for a ban on new oil and gas exploration, following their successful demand in 2022 to cancel the 26th licensing round. The cancellation led to open conflict between the trade unions and the left-of-centre parties. Labour subsequently agreed to reopen the 26th licensing round; the party advocates expanding oil exploration and extraction. Yet strategic litigation by climate campaigners recently ruled three oil fields to be shut down unless the state can swiftly provide improved environmental impact assessments. With the new government dependent on left votes in parliament, there is opportunity to continue to prise open the debate on the future of oil. This will not be easy. But for the left to be making political headway on the issue in a landscape rigged so profoundly against climate action and bankrolled by oil and gas revenues is a significant achievement.

Recent polling shows that Norwegians rank the climate as the most important global issue. Yet when asked what the country should prioritise, the numbers shift dramatically from climate to security and defence. In other words, Norwegians know that something should be done, but they don’t want to be the ones to do it. Indeed, at COP30, Norway supported global fossil fuel phaseouts. Yet domestically it sings from a different hymn sheet. Collective denial about Norway’s outsized contribution to the climate crisis will be hard to shift. The priorities of the establishment, and the dominant parties cut against this, choosing militarism over welfare and fossil fuels over climate action. The major issue facing Norway however is not Russia, but the future after oil. Whoever controls the Oil Fund will have a central role in shaping this. Will the future be the Progress Party’s climate obstructing laissez-fairism, an eco-socialist post-oil green state, or business as usual under Labour? Much is at stake, and not just for the people of Norway.