European Natural Gas Prices once Rose by 10% due to Strike Plan of Workers in Norway's Oil and Gas Industry

SHANGHAI, Jul 5 (SMM) - On Monday (July 4), local time, the prices of natural gas in Europe rose by more than 10% to the highest level in the past four months, because the strike plan of workers in Norway, a big oil and gas country, further tightened the supply.

The outbreak of the Russia-Ukraine conflict has further pushed up global energy prices. As natural gas and oil prices continue to be high, workers are demanding higher wages to cope with soaring inflation.

The local trade union in Norway said that the strike will be firstly held in the Gudrun, Oseberg South and Oseberg East offshore platforms of Equinor on Tuesday at midnight local time, followed by a strike in the other three oil and gas fields of Heidrun, Aasta Hansteen and Kristin on Wednesday midnight.

On Monday, the Lederne trade union in Norway announced that if the ongoing wage dispute is not resolved, the strike will be further escalated from July 9, local time, on Sleipner, Gullfaks A and Gullfaks C platforms.

The Norwegian Oil and Gas Association predicts that by Wednesday, the strike will reduce the country's natural gas production capacity by 292,000 barrels of oil equivalent per day, accounting for about 13% of Norway's total production capacity.

According to relevant calculations, if the strike escalates further at the weekend, Norway will lose nearly a quarter of its natural gas production capacity and about 15% of its oil production capacity. The Norwegian government said that it is paying close attention to this conflict and will stop the strike under special circumstances.

The strike in Norway's oil and gas industry has further worsened the natural gas supply in Europe. Russia claimed last month that it cut the supply of natural gas transported by the Nord Stream 1 pipeline by 60% due to equipment maintenance problems.

In addition, Freeport, one of the largest liquefied natural gas (LNG) terminals in the US, had an explosion last month, which is expected to be shut down for as long as three months. Freeport is an important LNG terminal for the US to supply natural gas to Europe.

The Norwegian Ministry of Petroleum and Energy said on Monday that it will revise the production licenses of several gas fields, including Troll, Gina Krog, Duva, Oseberg, Asgard and Mikkel, which will enable Norway's natural gas output to be kept at full speed next year, so that it can be exported to other European countries to replace Russian natural gas.

According to analysts at Energi Danmark, the market is extremely worried about the supply of natural gas, which makes the risk premiums continue to increase. If the supply remains low, the tension will further escalate.