The Norwegian government on Wednesday proposed to raise the spending from the country’s oil fund, the world’s largest sovereign wealth fund, in next year’s budget, according to the draft budget of the Labor party, which won a second term in office at the general elections last month.
The Labor government of Jonas Gahr Støre will need support from its junior partners in the coalition to pass the bill in Parliament.
The 2026 budget proposes to use $57.4 billion (579 billion Norwegian crowns) from the Government Pension Fund Global (GPFG), which is commonly referred to as ‘Norway’s oil fund’ because it was created with oil and gas revenues.
That would be higher than last year’s fund spending of $54.6 billion (550.6 billion crowns), and would represent 2.8% the value of the fund.
Norway’s withdrawals from the fund are government by the so-called fiscal rule, which stipulates that on average over the cycle spending must be limited to the expected real return on the fund – currently estimated at 3%.
Norway’s fund has $2 trillion worth of assets and holds on average 1.5% of all listed companies in the world. With the fund, created in the 1990s, Norway ensures its generous welfare policies and moves away from direct dependence on oil and gas revenues. State income from the massive petroleum industry in Norway goes to the fund, but it is invested in equity, property, and fixed-income markets globally.
Also in Norway’s 2026 budget draft, the government estimates that the state’s net cash flow from petroleum activities would be $65.8 billion (664 billion crowns) this year. The estimate for 2026 is about $51.6 billion (521 billion crowns) in net cash flow from petroleum activities for Norway.
“The revenues from the petroleum industry are very large and important for financing our welfare state,” Energy Minister Terje Aasland said on Wednesday, commenting on the 2026 budget bill.
“The world and Europe will have a need for oil and gas for decades to come, and it is therefore crucial that Norway continue to develop the Norwegian continental shelf to persist as a stable and long-term supplier of energy,” Aasland added.
“Therefore, the government wants to ensure stable and predictable regulatory framework, and a high level of exploration activity.”
By Tsvetana Paraskova for Oilprice.com
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