Norway Main Beneficiary of Ukraine War

When Russian President Vladimir Putin gave the order to invade Ukraine in February 2022, he surely did not expect that one of Russia’s neighbors would be the main beneficiary of his war. Yet as Russian hydrocarbon exports to Europe cratered in the wake of the invasion, Norway emerged as the continent’s largest supplier.

Owing to the steep increase in gas and oil prices that followed the outbreak of the war, Norway ultimately enjoyed a massive financial windfall. In 2022 and 2023, it reaped nearly US$111 billion in additional revenue from gas exports, according to recent estimates from the finance ministry.

A question arises, why Norway was allocated a little more than US$3.1 billion for support to Ukraine in its 2025 budget?

Combined with what it contributed in 2024, Norway’s support for Ukraine amounts to less than 5 percent of its two-year war windfall. For comparison, Germany, Europe’s largest single contributor, provided US$16.3 billion in military, financial, and humanitarian support for Ukraine from January 2022 until the end of October 2024, and the United States has contributed US$92 billion. But while Norway’s two-year windfall is larger than the US and German contributions combined, Norway’s support for Ukraine as a share of GDP, at 0.7 percent, ranks only ninth in Europe, far behind Denmark (2 percent) and Estonia (2.2 percent).

Not only does Norway have the capacity to be making far more of a difference to the outcome of the war and the subsequent civilian reconstruction; it has an obvious moral obligation to do so. Given that its excess revenues are a direct consequence of Russia’s war, surely a greater share of them should go to those fighting and dying on the front lines to keep their country free.

Instead, Norway’s government has effectively decided to be a war profiteer, clinging greedily to its lucky gains. To their credit, opposition parties have proposed higher levels of support for Ukraine, ultimately pushing up the sum that the government initially proposed. No party, however, has come anywhere close to suggesting a transfer of the total war windfall to Ukraine.

The Norwegian government’s position is puzzling, given that Norway shares a border with Russia and has long relied on its allies’ support for its defense. Its own national security would be jeopardized if Russia wins the war or is militarily emboldened by a peace agreement skewed in its favor.

Moreover, it is not as though Norway would be immiserated by transferring its war windfall to Ukraine. This windfall represents about 6 percent of its sovereign wealth fund, the world’s largest, with assets valued at US$1.7 trillion—or US$308,000 for every Norwegian.

True, Norway channels all government revenue from oil and gas production to its sovereign wealth fund, and no more than 3 percent of the value of the fund can be drawn down and transferred to the government budget each year. This rule helps limit the effects on inflation and the exchange rate, and ensures that the fund exists in perpetuity.

But as a macroeconomic and national savings instrument, the drawdown rule was not designed with wartime demands in mind. It therefore should not be seen as an obstacle for a larger transfer to Ukraine. Since such a transfer would not enter the Norwegian economy, it would have no domestic inflationary or other macroeconomic implications. (With the 2025 budget largely set, it would need to be an extrabudgetary measure justified by the wartime circumstances.)

This is not the first time that Norway’s hoarding of its war windfall has been an issue. But it is the first time that we have been given an official estimate of the windfall’s value.

The finance ministry has assigned a number to natural-gas export revenues in excess of what they would have been had gas prices remained around their five-year pre-invasion average. Although such counterfactuals will always be subject to uncertainty and debate, the official estimate is the closest we will get to a value for Norway’s war windfall.

In fact, the actual number is probably much higher, as the estimate does not include excess revenues resulting from higher oil prices following the invasion.

With Europeans wringing their hands about the implications of Donald Trump’s return to power, Norway’s government and parliament should transfer the windfall to Ukraine in the form of military and financial support. Norway has a powerful national-security interest in doing the right thing.

 

Ukraine tried to kill Putin with night-time drone attack on Kremlin, accuses Russia

Russia accused Ukraine on Wednesday of attacking the Kremlin with drones overnight in an attempt to kill President Vladimir Putin - the most serious allegation that Moscow has levelled at Kyiv in more than 14 months of war, reports Reuters.

President Volodymyr Zelenskiy promptly denied any Ukrainian involvement, telling a press conference in Helsinki: "We don't attack Putin, or Moscow, we fight on our territory."

A senior Ukrainian presidential official said the incident instead suggested Moscow was preparing a major terrorist provocation.

US Secretary of State Antony Blinken said Washington had not been able to validate the reported attack, and that Russian assertions should be taken with a very large shaker of salt.

Russia reserved the right to retaliate, Putin's office said, and Russian hardliners demanded swift retribution against Zelenskiy himself.

"Two uncrewed aerial vehicles were aimed at the Kremlin. As a result of timely actions taken by the military and special services with the use of radar warfare systems, the devices were put out of action," the presidency said in a statement.

"We regard these actions as a planned terrorist act and an attempt on the president's life, carried out on the eve of Victory Day, the May 9 Parade, at which the presence of foreign guests is also planned ...

"The Russian side reserves the right to take retaliatory measures where and when it sees fit."

Baza, a Telegram channel with links to Russia's law enforcement agencies, posted a video showing a flying object approaching the dome of the Kremlin Senate building overlooking Red Square - site of next Tuesday's Victory Day parade - and exploding in an intense burst of light just before reaching it.

Two similar videos posted on social media showed two objects flying on the same trajectory towards the dome, with the clock on the Kremlin's Spassky Tower reading 2:27 and 2:43. The first seemed to be destroyed with little more than a puff of smoke, the second appeared to leave blazing wreckage on the dome.

Reuters checks on the time and location indicated that the videos could be authentic, although it was not clear how Ukraine, if it were involved, could seriously have expected to kill Putin with a drone strike on the Kremlin - a huge, historic walled citadel in the heart of Moscow.

Ukrainian presidential adviser Mykhailo Podolyak said in comments sent to Reuters, "In my opinion, it is absolutely obvious that both 'reports about an attack on the Kremlin' and simultaneously the supposed detention of Ukrainian saboteurs in Crimea ... clearly indicate the preparation of a large-scale terrorist provocation by Russia in the coming days."

The powerful speaker of the lower house of Russia's parliament, Vyacheslav Volodin, demanded the use of weapons capable of stopping and destroying the Kyiv terrorist regime.

Former president Dmitry Medvedev, now deputy head of Russia's Security Council, said the incident leaves us no option but to physically eliminate Zelenskiy and his clique.

A British expert on Russia, Mark Galeotti, said it was unlikely that the alleged attack had targeted Putin, who notoriously rarely goes to the Kremlin, let alone stays there overnight.

"If we presume it was a Ukrainian attack," Galeotti tweeted, "Consider it a performative strike, a demonstration of capability and a declaration of intent, 'don't think Moscow is safe.'"

The presidential administration said fragments of the drones had been scattered on the territory of the Kremlin complex but there were no casualties or material damage.

The RIA news agency said Putin had not been in the Kremlin at the time, and was working on Wednesday at his Novo Ogaryovo residence outside Moscow.

Victory Day is a major public holiday commemorating the defeat of Nazi Germany in World War Two, and a chance for Putin to rally Russians behind what he calls his special military operation in Ukraine.

Russia marks the occasion with a huge military parade on Red Square, for which seating has already been erected.

The state news agency TASS said the parade - for which the Kremlin last week announced tighter security - would still go ahead.

Before the drone attack was announced, some 10 hours after the event, Moscow Mayor Sergei Sobyanin said the city had introduced an immediate ban on unauthorized drone flights.

Russia has accused Ukraine of numerous cross-border attacks since the start of the war, including strikes in December on an air base deep inside Russian territory that houses strategic bomber planes equipped to carry nuclear weapons. In February, a drone crashed in Kolomna, about 110 km (70 miles) from the centre of Moscow.

Ukraine typically declines to claim responsibility for attacks on Russia or Russian-annexed Crimea, though Kyiv officials have frequently celebrated such attacks with cryptic or mocking remarks.

 

Russia publishes an official list of states unfriendly to it

A list of foreign states that Russia considers as having committed unfriendly actions against Russia, Russian companies and citizens was published on the Russian government's website on Monday. 

The countries, international organizations and territories considered unfriendly include Australia, Albania, Andorra, United Kingdom, including Jersey, Anguilla, British Virgin Islands, Gibraltar, the member states of the European Union, Iceland, Canada, Liechtenstein, Micronesia, Monaco, New Zealand, Norway, Republic of Korea, San Marino, North Macedonia, Singapore, USA, Taiwan, Ukraine, Montenegro, Switzerland, Japan." Russia lists Taiwan as being part of China.

A complimentary item of legislation from Sunday states that Russian citizens and companies must apply for a special permit to deal with unfriendly foreign entities. 

The list was created as part of a series of laws to follow a Saturday decree by Russian President Vladamir Putin for temporary economic measures to ensure the financial stability of the Russian Federation.

Part of the measures the list was to enforce was the law that allows Russian citizens, companies and state bodies to pay back foreign creditors in rubles. 

While Israel has condemned Russia for its invasion of Ukraine, it was not included on the list. Israel has taken on a mediation role during the conflict, seeing Prime Minister Naftali Bennett flying to Moscow on Saturday to speak with Putin.