Norway set to tap its oil wealth to finance war aid for Ukraine

Norway plans to use its USD 1.3trn sovereign wealth fund to pay for a planned long-term aid program to Ukraine, Prime Minister Jonas Gahr Støre said.
Norway's Prime minister Jonas Gahr Støre. | Photo: Ints Kalnins/Reuters/Ritzau Scanpix
Norway's Prime minister Jonas Gahr Støre. | Photo: Ints Kalnins/Reuters/Ritzau Scanpix
By Ott Ummelas / Bloomberg

After reaping the benefits from a surge in oil and gas revenues following Russia’s war, the Nordic nation will finance a package of military and civilian assistance to Ukraine as it’s fighting the invasion. The plan, which entails “temporarily” increasing reliance on its rainy-day fund, is set to be outlined by the minority government next week, the prime minister said in a speech to lawmakers in Oslo on Thursday. 

“We believe that this is justifiable in a heightened security policy situation,” Gahr Støre said. “It is in our national interest that Ukraine does not lose this war, and we are in a situation where we have room for action due to extraordinary income from the petroleum sector.”

The Labor-led government has sought to trim spending of the oil fund to avoid fueling price growth which remains near a three-decade high, and has raised taxes on the wealthy while also introducing new resource taxes on its fish-farming industry. The use of fossil-fuel wealth on the aid package will not stoke the Norwegian economy nor feed higher inflation in the country, according to the prime minister.

European officials have urged Norway to share its windfall export gains from higher fossil fuel prices.

The premier’s comments suggest the plan will not involve procurement from Norway’s defense companies that include Kongsberg Gruppen ASA and Nammo AS. The country, which also shares a border with Russia, last year provided military and civil aid totaling more than NOK 10bn (USD 1bn) to Ukraine.


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