Key Takeaways
Norway has a strong oil and gas industry that provides over half of the country’s exports and funds the world’s largest sovereign wealth fund.
It also produces nearly 90% of its electricity from hydropower and exports a large share of it to its neighbors.
Norway is not in the EU but cooperates with it, but will not abide by an EU policy banning drilling in the Barents Sea.
Norway believes its Arctic areas require development to meet its goal of holding oil and gas production steady until at least 2035.
The head of the International Energy Agency, who is not known for supporting oil and gas development, believes Arctic oil and gas development is important for European energy security.
Norway is also asking its Supreme Court to overturn environmental verdicts by lower courts against its oil fields—a case which will be decided later this year.
Norway has told Europe it will no longer be its “green battery,” as Europe’s increasingly intermittent grid demands power from Norway to cover lulls in production and is driving electricity price swings for Norwegians.
Norway continues to develop its oil and gas resources in the Barents Sea despite an EU policy against drilling in the Arctic on environmental grounds. Norway is not a member of the European Union. Norwegian Energy Minister Terje Aasland believes continued activity in the Barents Sea serves both Norwegian and European interests and that it is the country’s sovereign right to develop Barents Sea resources, even if the EU continues to support a moratorium on Arctic hydrocarbon supplies. Critics of hydrocarbon development argue that new Arctic projects would take many years to come online and do little to address Europe’s near-term energy challenges. Norway has argued that its parts of the Barents Sea opened to oil and gas activity are ice-free, and therefore less prone to oil spills and other environmental impacts.
The EU’s moratorium on Arctic drilling was enacted in 2021 due to the bloc’s climate commitments and stated environmental concerns. The ban does not allow drilling in Norway’s northern Barents Sea, which is estimated to contain most of the remaining Norwegian oil and gas resources. Fatih Birol, the executive director of the International Energy Agency (IEA), who is not known for supporting oil and gas development, said the European Union should reverse the current moratorium on drilling in the Arctic, as it is extremely important for European energy security. Reuters reports that the EU is considering revising its policy in response to concerns about energy security.
Following Russia’s 2022 invasion of Ukraine, Norway, not an EU member but a close ally, has become Europe’s largest supplier of natural gas, meeting around 30% of the European Union and Britain’s gas demand. Norway also produces around 2% of global oil and provides significant hydropower exports to neighboring countries. In 2025, the country’s gas production was near record levels, and oil production attained its highest level since 2009. But production is expected to fall sharply after 2030 unless new resources are discovered and developed, which is why the Barents Sea resources are needed. Norway also aims to maintain oil and gas exports at current levels until at least 2035.
Critics also view developing these resources as creating stranded assets if the EU does not want them once they are developed. But according to Equinor, Norway’s largest oil firm, oil and liquefied natural gas (LNG) from the Barents Sea can be shipped anywhere in the world if prohibited for use by the EU. Energy Minister Aasland has been outspoken in his defense of Norway’s energy resources, which has helped drive its significant oil and gas production in 2025.
Norway Goes to the Supreme Court to Overturn a Ruling
In 2023, two lower courts ruled in favor of Greenpeace and Young Friends of the Earth against the Norwegian government, finding that Norway failed to properly assess the environmental impact from Equinor’s Breidablikk and Aker BP’s Tyrving and Yggdrasil oilfield developments. Two fields – Breidablikk and Tyrving – are already producing, while Yggdrasil, Norway’s largest offshore oil project since 2019, is scheduled to begin production in 2027. The oil industry in Norway provides half the country’s export revenue and has given the nation the world’s largest sovereign wealth fund.
Norway’s government has now asked the country’s Supreme Court to overturn that lower-court ruling, which invalidated the permits for the three oilfields. The lower courts have declined to order a halt to production while the legal process is ongoing and have also suggested that the government could seek to remedy regulatory shortcomings. If Greenpeace Norway wins this round, it believes Norwegian politicians would have to assess environmental damage from Norwegian Oil Production, e.g., how many lives will be lost, how many forest fires will be created, and how much ice will melt. The Supreme Court hearing is set to run for four days, and a verdict is expected later this year.
Norway Is No Longer Europe’s “Green Battery”
According to Energy Minister Terje Aasland, Norway no longer sees itself as Europe’s “green battery.” In addition to oil and gas, Norway produces hydroelectric power from an extensive network of reservoirs and waterways feeding hydroelectric plants, which produce nearly 90% of the country’s electricity. It exports excess hydropower to Europe via cross-border power cables when available. New power interconnectors, including links to Britain and Germany, were built to enable the connection, but they drew opposition in Norway because its electricity prices have been affected by European electricity prices, which have risen due to European climate policies. In other words, integration with Europe’s power system made Norway’s power system vulnerable to electricity price swings.
Norway has urged European countries to strengthen their stable power supply, weakened by coal and nuclear plant closures and a lack of investment in new gas-fired generation. Europe has instead focused more on intermittent renewables such as wind and solar, which do not provide stable power supplies. The country, however, remains committed to strong power sector cooperation with Europe.
Conclusion
Norway will continue to produce oil in the Arctic despite the EU moratorium on Arctic hydrocarbon supplies, as production in the Barents Sea is needed to meet its goal of maintaining oil and gas exports at current levels until at least 2035. Norway sees oil and gas production as necessary for Europe’s national security. Norway is asking the Supreme Court to overturn environmental verdicts by lower courts against its oil fields—a case which will be decided later this year. Norway has also decided it is no longer Europe’s “green battery,” as its interconnection with Europe has caused price swings driven by rising electricity prices from Europe’s net-zero policies, the retirement of stable generation sources, and heavy reliance on intermittent renewables.
