The West’s anti-Russian sanctions have hit Norwegian industries hard, disrupting key economic ties. If Donald Trump were to rescind the sanctions, it would have a positive effect on the Norwegian economy, Norwegian industrialists found.
It’s not just Norway’s fisheries that have been left counting their losses after the sanctions war the West began to wage against Russia, the Norwegian employers’ trade union Federation of Norwegian Industries (Norsk Industri) found in its recent annual report based on feedback from member companies.
“Specific prohibitions related to oil fields north of the Arctic Circle had an adverse effect on the Norwegian energy suppliers,” the report stated, suggesting that a number of companies and communities were particularly affected by the sanctions.
Remarkably, the negative effect was not limited to profit losses. Accordingly, Norwegian companies were found to experience stronger competition from other actors due to a shift in the industry, which gave advantages to countries not affected by the sanctions war, such as China.
Furthermore, the closure of doorsNorwegian-Russian relations reportedly led to a dramatic weakening of Norwegian expertise and was found to have reduced Norway’s overall competence in long-term future projects.
Although Norsk Industri CEO Kunt E. Sunde admitted the detrimental effect of the sanctions in an interview with Norwegain newspaper Klassekampen, he nevertheless acknowledged that his federation did not intend to advise the Norwegian government on this matter to avoid meddling in foreign policy issues. At the same time, he acknowledged the fact that it would be largely beneficial for the Norwegian economy if US President Donald Trump were to lift the sanctions as intended.
“If he [Trump] eases the sanctions burden as promised, the EU will probably follow suit and then the natural consequence is that Norway will do likewise. For Norwegian industry, it would undoubtedly be positive,” Kunt E. Sunde told Klassekampen, citing a number of joint projects that were put on ice.
Solstad Offshore is one of the companies affected by the anti-Russian sanctions. Solstad Offshore CEO Lars Peder Solstad admitted that that the sanctions make a downright bad situation even worse.
“Nowadays, there is very low activity in the oil industry in general. And without access to the Russian market, the situation has been made even more difficult,” Lars Peder Solstad told Klassekampen, admitting that anything that gave his company more activity would be positive.
In 2016, Norway exported a 2.2 billion NOK ($270mln) worth of goods and services to Russia, as opposed to 8.6 billion (over $1bln) in 2013.
Following the introduction of sanctions in 2014, some 40,000 jobs have disappeared from Norway’s oil industry, leaving a devastating effect on western Norway. The Norwegian fishing industry was another big loser. In 2013 Norwegian fish exports to Russia totaled 6.5 billion NOK ($800mln). In 2016, not a single Norwegian salmon crossed the Russian border directly, the report stated.
However, it also transpired from the report that sanctions regulations were interpreted differently by different countries and that it was entirely possible to circumvent some of the prohibitions by establishing subsidiaries in other parts of the world, such as in Asia.