why the gas price cap could cloud negotiations with Norway

Baptist Morin

What if the gas price cap voted by the European Union was detrimental to the latter? Europe’s leading gas supplier, Norway, does not welcome the arrival of a price limit. And if the latter have decided to make an effort in 2022 to help its neighbors, Oslo could well decide to backtrack in 2023.

The 27 Member States of the European Union agreed on Monday on a cap on the price of gas. The mechanism is complex and will only be applied in the event of a surge in the market price, but it could confuse us with Norway. However, this country has become our main supplier and now supplies more than a third of the gas in France and half of the gas in Germany.

To say that it is an indispensable partner is an understatement. Norway has already agreed to increase its gas exports to Europe by 8 to 10% in recent months, which has also led to a drop in its oil production. “It’s not sure that the Norwegians will continue to make efforts next year,” warns Thierry Bros, professor at Sciences Po, energy specialist. “At that time there will be less gas available to Europeans and therefore prices will soar again.”

A binding political agreement for Oslo

Discussions between Europe and Norway today focus on additional long-term deliveries at a negotiated price. The problem is that the Norwegian government decided not to award new gas exploitation licenses to obtain a political agreement with the socialist left.

Another problem is also that Oslo sets a condition that is incompatible with the Union’s environmental policy: that Europe recognize that gas is an energy of the future.