What do you know about Norway's economy.. The richest oil country in Europe?

SadaNews - Oil has become the main driver of Norway's economy since the discovery of massive offshore reserves in the late 1960s, and the Norwegian economy has long been linked to the energy sector.

The uniqueness of the Norwegian experience lies in its ability to manage its natural resources efficiently, blending sustainable production with long-term financial planning, allowing it to establish the largest sovereign wealth fund in the world and ensuring widespread economic stability.

Oil in Norway

Norway is the largest producer of oil and gas in Europe, with total production exceeding 4 million barrels of oil equivalent per day. The confirmed oil reserves in Norway are estimated at about 7 billion barrels, according to the U.S. Energy Information Administration and Reuters.

Norway's oil production in December 2024 was approximately 1.78 million barrels per day, and it produced 217,000 barrels of natural gas liquids daily during the same period, according to a report from the Norwegian Petroleum Directorate.

The country continues to explore and develop new oil and gas fields, including in the Barents Sea in the Arctic.

The majority of the country's oil is extracted by Equinor, a state-owned Norwegian energy company with a 67% ownership stake, which also operates in about 30 countries worldwide.

Equinor produces 70% of the oil and natural gas in Norway.

Its operations in Norway accounted for 67% of its total global operations in 2021.

The company globally produces around 2 million barrels of oil daily, most of which comes from Norway, according to 2024 data from the U.S. Energy Information Administration.

Natural Gas in Norway

As natural gas production in Norway has grown, the amount of natural gas liquids produced has significantly increased, peaking at 351,000 barrels per day in 2017.

In 2023, natural gas liquids production reached 204,000 barrels per day, with the two largest fields being Troll (23,000 barrels per day) and Asgard (21,000 barrels per day).

"Kårstø" is the largest natural gas liquids processing center in Europe, from where dry gas is primarily transported via pipelines to the rest of Europe, according to the U.S. Energy Information Administration.

Propane, butane, and natural gasoline are exported from Kårstø to Europe and the world, while ethane is shipped to petrochemical users in the North Sea basin. The propane storage caverns in Kårstø, with a total capacity of over 1.6 million barrels, are the largest in Europe.

Norwegian Sovereign Wealth Fund

The country has benefited from decades of high energy prices, enabling it to build the largest sovereign wealth fund in the world.

The value of the Norwegian sovereign wealth fund has risen to a record level of 20 trillion Norwegian kroner ($1.8 trillion).

The fund's value is equivalent to about $321,000 for each of the country's 5.6 million residents.

The fund's value has doubled in just 5 years, driven by the influx of oil and gas revenues, alongside the strong performance of global financial markets, according to Reuters.

The fund was established in 1996 to serve as "national savings for rainy days," and its assets have grown to approximately four times Norway's annual GDP, far exceeding original expectations.

In comparison, the fund's value is similar to the GDP of a country, such as Australia, whose population is five times larger than Norway's.

The fund's investments are managed by Norges Bank Investment Management, which allocates approximately 70% in global equities, 25% in bonds, and the remainder in real estate and renewable energy, while committing to track major global market indices.

GDP and Per Capita Income

NORWAY's GDP reached $483.7 billion in 2024, and is expected to rise to $504.3 billion in 2025, with a growth rate of 2.1%, according to International Monetary Fund data.

Per capita GDP stood at $86,600 last year according to IMF data.

Unlike many wealthy countries, Norway's per capita GDP figures reflect a real economic reality.

The country is among those with the lowest levels of income inequality globally.

Unemployment and Inflation

Norway records one of the lowest unemployment rates in Europe, standing at 4% in 2024, reflecting the robustness of the labor market and the efficiency of the adopted economic policies.

Despite inflationary pressures in many countries, Norway has maintained a relatively low inflation rate of 3.1% in 2024 (2.2% in December of the same year), which is among the lowest in continental Europe.

Although this rate exceeds the government's target of 2%, it remains within manageable limits, according to IMF data, which enhances investor confidence and the stability of the economic environment in the country.

Key Sectors

The export volume of goods and services reached 2.47 trillion Norwegian kroner ($243 billion) in 2024, an increase of 1% compared to the previous year driven by a 9% rise in service exports, according to data from Statistics Norway (SSB). The value of goods exports alone amounted to $168.3 billion.

Oil and gas exports 2024: reached 1.17 trillion Norwegian kroner ($109.4 billion) in 2024, one of the highest in Norway's history.

Exports of goods and services excluding oil and gas: 1.3 trillion kroner (about $121 billion).

Seafood industry 2024: The seafood industry in Norway experienced a record year with exports valued at 175.4 billion Norwegian kroner (about $16 billion).

Imports and Trade Surplus

Data from Statistics Norway indicated that total Norwegian imports for 2024 reached approximately 1.75 trillion Norwegian kroner (about $172 billion).

Imports were diversified across several vital sectors:

Electrical machines and equipment (such as computers, communication devices, and motors) topped the list.

Followed by vehicles, especially electric cars that have gained significant popularity as part of the transition to sustainable transportation.

Imports included chemical products, particularly pharmaceuticals and industrial materials.

Food and beverages.

Metals and steel.

Clothing and textiles.

On the trade balance front, Norway recorded a trade surplus of 722 billion kroner ($69.4 billion) during 2024, reflecting the strength of its exports, particularly in the oil and gas sectors.

In conclusion, the Norwegian economy is a unique model that combines efficient exploitation of natural resources and sound financial management bolstered by oil and gas revenues, enabling the country to build the largest sovereign wealth fund in the world.

This policy has reflected on the standard of living of the citizens, as the Norwegian citizen enjoys high levels of welfare, with low unemployment and income inequality, making Norway one of the most stable and prosperous countries in the world.

Source: Al Jazeera