OSLO – Norway’s government plans to increase its use of the country’s vast oil wealth next year, proposing higher spending from its $2 trillion sovereign fund as part of the 2026 national budget.
The proposal, unveiled on Wednesday, comes from Prime Minister Jonas Gahr Støre’s Labour Party, which secured a second term in last month’s general election. To pass the budget, the minority Labour government will still need backing from its coalition partners in Parliament.
Under the draft plan, Norway intends to draw 579 billion Norwegian crowns ($57.4 billion) from the Government Pension Fund Global (GPFG) – better known as the oil fund. That marks a rise from 550.6 billion crowns ($54.6 billion) this year and represents 2.8% of the fund’s total value.
Spending Rule and Fund Background
Withdrawals from the fund are guided by Norway’s strict fiscal rule, which limits average spending to the fund’s expected real return – currently set at 3%. This approach aims to balance present-day welfare spending with long-term financial stability.
Established in the 1990s, the GPFG is now the world’s largest sovereign wealth fund, managing roughly $2 trillion in assets. It holds stakes in about 1.5% of all listed companies globally, investing heavily in equities, real estate, and fixed-income markets. The fund allows Norway to sustain generous welfare programs while reducing direct dependence on oil and gas revenues.
Petroleum Revenues and Future Outlook
In the budget draft, the government forecasts that net cash flow from petroleum activities will total 664 billion crowns ($65.8 billion) this year, falling to 521 billion crowns ($51.6 billion) in 2026 as production gradually tapers off.
Energy Minister Terje Aasland highlighted the ongoing importance of the petroleum sector in financing Norway’s welfare state.
“The revenues from the petroleum industry are very large and important for financing our welfare state,” Aasland said.
“The world and Europe will need oil and gas for decades to come, and it is crucial that Norway continues developing the continental shelf as a stable, long-term energy supplier.”
He added that the government aims to maintain a “stable and predictable regulatory framework” and encourage a high level of exploration activity in Norwegian waters.
