Norway oil industry expects to make record high investments in 2025
COPENHAGEN, May 27 (Reuters) - Norwegian oil and gas investments are expected to hit a new record this year, a statistics office survey of industry players showed on Tuesday.
The country's biggest business sector now expects to invest 269.1 billion Norwegian crowns ($26.62 billion) in 2025, up from a 253.8 billion crowns estimate in February and compared to 251.2 billion last year.
Preliminary estimates for oil and gas investments in 2026 stood at 206.6 billion crowns, compared to a previous estimate of 197.1 billion crowns in February.
Forecasts will normally rise as companies firm up spending plans in the months leading up to a new year.
($1 = 10.1049 Norwegian crowns)
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The Guardian
4 hours ago
- The Guardian
The strait of Hormuz: what is it, and why does it matter to global trade?
President Donald Trump's unprecedented decision to bomb three Iranian nuclear sites has deepened fears of a widening conflict in the Middle East. Joining Israel in the biggest western military action against the Islamic Republic since its 1979 revolution, the world is now bracing for Iran's response. One way Iran could retaliate, analysts say, is to close off the strait of Hormuz, a vital trade route, through which over a fifth of the world's oil supply, 20m barrels, and much of its liquified gas, passes each day. Iran has in the past threatened to close the strait, which would restrict trade and impact global oil prices, but has never followed through on the threat. Among the world's most important oil chokepoints, the strait of Hormuz is geo-strategically important to the United States and beyond, as the strength of the global economy is heavily dependent on the flow of oil. The strait lies between Oman and Iran and links the Gulf to the north with the Gulf of Oman to the south and the Arabian Sea beyond. It is 33km wide at its narrowest point, with the shipping lane just 3km wide. About one-fifth of the world's total oil consumption passes through the strait. Between the start of 2022 and last month, approximately 17.8 million to 20.8m barrels of crude, condensate, and fuels flowed through the strait daily, according to data from analytics firm Vortexa. Members of the Organization of the Petroleum Exporting Countries (OPEC) – Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq – export most of their crude via the strait, mainly to Asia. The US Fifth Fleet, based in Bahrain, is tasked with protecting commercial shipping in the area. Closing the strait has the advantage of being a means to impose a direct cost on Trump, as it would trigger an oil price spike with a near immediate inflationary effect in the US and across the globe. But it would also be an act of dramatic economic self-harm. Iranian oil uses the same gateway, and shutting Hormuz risks bringing Gulf Arab states, who have been highly critical of the Israeli attack, into the war to safeguard their own interests. In particular, closing the strait would significantly harm China. The world's second-largest economy buys almost 90% of Iran's oil exports, which are subject to international sanctions. US secretary of state Marco Rubio has called on China to help stop Iran from closing it, telling Fox news: 'I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the strait of Hormuz for their oil.' 'If they do that, it will be another terrible mistake,' he added, 'It's economic suicide for them if they do it.' There are already reports that some supertankers have U-turned in the strategic waterway following the US strikes. Iran's Press TV reported at the weekend that the Iranian parliament approved a measure to close the strait of Hormuz, but ultimately the decision will come down to Iran's top leaders. On Sunday Iran's foreign minister, Seyed Abbas Araghchi, hinted at what could be an open-ended retaliation when he said that Trump's decision to bomb Iran 'will have everlasting consequences'. In his first comments since the US joined Israel's war on his country, Iran's supreme leader Ayatollah Ali Khamenei said that Israel has made a 'grave mistake' and 'must be punished', but did not make any specific reference to the strait of Hormuz.
Reuters
19 hours ago
- Reuters
Oil to open higher as US strikes on Iran boost supply risk premium
LONDON, June 22 (Reuters) - Oil is likely to rise by $3-5 per barrel when trading resumes on Sunday evening after the U.S. attacked Iran at the weekend, market analysts said, with gains expected to accelerate only if Iran retaliates hard and causes a major oil supply disruption. U.S. President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes overnight, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself. Iran is OPEC's third-largest crude producer. Global oil benchmark Brent crude could gain $3 to $5 per barrel when markets open, SEB analyst Ole Hvalbye said in a note. Brent settled at $77.01 a barrel on Friday and U.S. West Texas Intermediate at $73.84. "An oil price jump is expected," said Jorge Leon, head of geopolitical analysis at Rystad and a former OPEC official. "Even in the absence of immediate retaliation, markets are likely to price in a higher geopolitical risk premium." Crude had settled down on Friday after the U.S. imposed fresh Iran-related sanctions, including on two entities based in Hong Kong, and counter-terrorism-related sanctions, according to a notice posted to the U.S. Treasury Department website. Brent has risen 11% while WTI has gained around 10% since the conflict began on June 13 with Israel targeting Iran's nuclear sites and Iranian missiles hitting buildings in Tel Aviv. Currently stable supply conditions and the availability of spare production capacity among other OPEC members have limited oil's gains. Risk premiums have typically faded when no supply disruptions occurred, said Giovanni Staunovo, analyst at UBS. "The direction of oil prices from here will depend on whether there are supply disruptions - which would likely result in higher prices - or if there is a de-escalation in the conflict, resulting in a fading risk premium," he said. A senior Iranian lawmaker on June 19 said that the country could shut the Strait of Hormuz as a way of hitting back against its enemies, though a second member of parliament said this would only happen if Tehran's vital interests were endangered. About a fifth of the world's total oil consumption passes through the strait. SEB said that any closure of the strait or spillover into other regional producers would "significantly lift" oil prices, but said they saw this scenario as a tail risk rather than a base case given China's reliance on Gulf crude. Ajay Parmar, oil and energy transition analytics director at consultancy ICIS, said it was unlikely Iran would be able to enforce a blockage of the strait for too long. "Most of Iran's oil exports to China pass through this strait and Trump is unlikely to tolerate the inevitable subsequent oil price spike for too long - the diplomatic pressure from the world's two largest economies would also be significant," he said.
Telegraph
a day ago
- Telegraph
The Iranian threat to oil supplies is overblown
Oil and gas still matter. For all the talk of net zero and the growing share of renewables in electricity generation, hydrocarbons remain crucial to the global economy. Back in 2005, oil accounted for 37pc of the world's primary energy consumption, with gas generating 23pc. The same numbers are now 31pc and 24pc respectively – still hugely significant, with the world's reliance on natural gas as an energy source actually up over the last 20 years. Oil remains vital across numerous sectors, not least transportation – think trucks, aviation and shipping – and the manufacturing of industrial chemicals, plastics and asphalt among vital materials. Gas still generates around a quarter of the world's electricity and is used to make fertiliser – sorely needed to grow enough to feed a fast-expanding global population. We're often told – usually with an eye on geopolitical realities, because hydrocarbons are predominantly found in 'awkward countries' – that the world is less dependent on oil than at the time of, say, the 1973 oil price shock. Back then, the crude price spiked four-fold in under a year after the Arab world embargoed energy exports from the Gulf during the Israel-Egypt Yom Kippur war. The world used 55m barrels a day in the early 1970s but over 100m now, with demand set to rise significantly into the 2030s and beyond. Oil – and gas – remain absolute necessities to any form of modern life, across a fast-industrialising world. Yes, the UK used 2.2m barrels daily half a century ago, and that's fallen to 1.4m now – in part due to efficiencies and renewable energy, but mainly because our manufacturing sector has shrunk from over a fifth to less than a tenth of our economy. Moreover, North Sea operations are now much diminished, not least because of punitive taxation and endless net zero regulation – so Britain is a net oil and gas importer. With both these vital hydrocarbons trading on global markets, we're particularly vulnerable to price spikes, losing out twice – paying more for our supplies without gaining the profits and extra taxation reaped by energy exporters when prices are high. I mention all this, of course, because the escalation of military hostilities between Israel and Iran, while causing yet more death, displacement and destruction across the Middle East, poses economic dangers too. Amidst the terrible human fallout, a spiking oil price threatens to reverse a fragile global recovery. From mid-January to early May, Brent crude fell from $81 (£60) a barrel to $61 – a 25pc drop – as a sluggish global economic outlook slowed projected energy demand. That combined with concerns that Donald Trump's tariff onslaught from early April would further stymie global trade. Over recent weeks, though, as this Israeli-Iranian conflict has intensified, Brent crude has spiked back up to $75, largely due to fears of turmoil engulfing the Middle East Tehran, specifically, has threatened to close the Strait of Hormuz, at the mouth of the Persian Gulf, a critical route for 25pc of global oil and liquefied natural gas (LNG) flows daily. Were that to happen, oil would soar above $100 a barrel and way beyond – doing serious damage to oil importing nations, not least the UK. Even if that doesn't happen, the International Monetary Fund reckons a 10pc rise in oil prices raises inflation in advanced economies by about 0.4 percentage points – and we've seen a 20pc-plus rise over the last month. UK inflation, 3.4pc in May, could easily soar above 4pc and beyond – twice the Bank of England's target. Stand by for higher UK petrol and diesel prices, along with domestic gas price rises too, especially if the conflict disrupts LNG exports from Qatar and elsewhere in the Gulf. That will push up household and industrial bills, with knock-on effects on food prices too – with food price inflation already jumping from 3.4pc in April to 4.4pc in May. Such inflationary pressures would rule out any more cuts in the Bank of England's policy rates for the foreseeable future. Bond yields would also rise – not least on UK sovereign debt – compounding the difficulties of this big-spending Labour government to stabilise the public finances. Renewed cost of living crisis headlines would also increase risks of a damaging wage-price spiral, with the UK's public sector unions already squaring up for more conflict this autumn. And these trends would intensify, of course, if Hormuz closes – which Iran could do by using its submarine fleet to lay deep sea mines between its southern coast and Oman, a distance of 25 miles at the Strait's narrowest point. Other oil producers (not least US frackers) can offset the disruption of Iranian supplies – the country pumps 4pc of global production – but not supplies from the Gulf as a whole. The reality is, though, that Iran relies heavily on oil exports – and closing the Strait would starve an unpopular government of the revenues needed to keep a lid on domestic discontent. And with 85pc of the energy leaving Hormuz consumed on Asian markets, thwarting those flows would alienate neutral powers such as China and India. Iran would think hard before alienating these two in particular, which would rally international support against Tehran, strengthening regional rival Saudi Arabia. Attempting to close the Strait would also risk devastating military and potentially civilian losses for Iran, including its naval and coastal assets, if the US and powerful Gulf states engaged in sustained retaliation. But the main reason I don't think Iran will disrupt Hormuz is that Tehran gains more by threatening to close the Strait than by actually doing so. The mere threat of action can drive up oil prices, benefiting Iran's economy and strengthening Tehran's negotiating position, without risking the consequences of action.
