EU Bans Russian Gas, Norwegian Production Falls -12.5%: Economic Shockwave Imminent

Both factoids remove between 11-16% of the EU-UK's gas supply virtually overnight in 2026, indicating a severe economic downturn

Everybody knows that Norway is a quite big producer of hydrocarbon energy, with a very large amount of their customers being, well, next door in Europe (emphases here and in the following mine:

Norway is a small player in the global crude market with production covering about 2 per cent of the global demand. Norwegian production of natural gas covers approximately 3 per cent of global demand, however, as an exporter Norway is a significant player. Norway is the fourth largest exporter of natural gas in the world, behind USA, Russia and Qatar. In 2024, Norway exported a gas volume equivalent to more than 30 per cent of the total gas consumption in the EU and the United Kingdom. Nearly all oil and gas produced on the Norwegian shelf is exported. Combined, oil and gas exceeds half of the total value of Norwegian exports of goods. This makes oil and gas the most important export commodities in the Norwegian economy.

In short: don’t think of Norway as a small nation in Northern Europe; think of it in terms of the emirates and other small oil states in the Persian Gulf.

The above quote is from the interesting website Norsk Petroleum:

Norwegian Hydrocarbon Production Has Peaked

Oh, look, there are production numbers, too, albeit for 2024. Care to guess what they look like in 2025?

Well, according to the very same website, here’s what they say (source):

In 2025, Norway produced 238 million standard cubic metres of oil equivalents (Sm³ o.e.) of marketable petroleum. By way of comparison, total production in 2025 was about ten per cent lower than in the record year 2004.

Here’s how they gaslight you (pun intended): they conflate all hydrocarbon energy produced into one big happy category—and as long as you don’t look into the details, you’re none the wiser. So, here goes (clickable source link):

The composition of the 2004 production maximum (‘peak oil’) was very different from the 2024 or 2025 production in terms of what was produced (and at what price these hydrocarbons were produced).

That above website is great—mainly because that graph is interactive (i.e., it shows you production numbers if you move your cursor there), plus there’s downloadable data from which we learn the following:

Norwegian oil production peaked in 2001 at 181.18 standard cubic metres of oil equivalents (Sm³ o.e.); by 2004, it had declined to 165.48 Sm³ o.e., a decline by about 9%.

As to natural gas, Norway never really produced much, relatively speaking, before the mid-1990s, and this is where, I’d argue, the real story is: gas production was well in the range from ±25 to ± 28 Sm³ o.e. between 1984 and 1995; it ramped up thereafter, doubling from 1995 (27.81 Sm³ o.e.) to 2001 (54 Sm³ o.e.) and doubling once again from 2001 to 2014 (108.3 Sm³ o.e.). Gas production has been hovering on a kind of bumpy plateau since then and stood between 112.32 Sm³ o.e. (2020) and 126.32 Sm³ o.e. (2024).

In 2025, gas production declined by about 12.5% (relative to 2024) to 110.39 Sm³ o.e.

EU Gas Futures vs. -12-13% Supply

And here’s why this is relevant, especially for the EUroklatura’s future:

These are 2024 data (2025 data will be published in late March 2026, supposedly, but who knows what the situation will look like two months hence); and here’s why this matters:

In 2024, Norway supplied about 30% of the combined EU-UK natural gas supply, with Russian pipeline gas adding another 7% of said supply.

On 26 Jan. 2026, the EUroklatura, in its infinite wisdom, the EU Council ‘gives final greenlight to a stepwise ban’ on Russian hydrocarbon imports’.

Here’s how Reuters tells the story:

The ban was designed to be approved by a reinforced majority of countries, allowing it to overcome opposition from Hungary and Slovakia, who remain heavily reliant on Russian energy imports and want to maintain close ties with Moscow.

Under the agreement, the EU will halt Russian liquefied natural gas imports by end-2026 and pipeline gas by September 30, 2027.

The law allows that deadline to shift to November 1, 2027, at the latest, if a country is struggling to fill its storage caverns with non-Russian gas ahead of winter.

Russia supplied more than 40% of the EU’s gas before 2022. That share dropped to around 13% in 2025, according to the latest available EU data.

But some EU countries continue to pay Moscow for oil, pipeline gas and liquefied natural gas, contradicting their efforts to support Ukraine and restrict funding to Russia’s wartime economy.

If the numbers in the Reuters piece are correct—and they may well be—things look even worse relative to the Norwegian data shared above:

• That -12.5% of Norwegian natural gas production in 2025 removes about 3.5-4% of the EU-UK (pronounced ‘Yoo-yuk’) supply from Norway; if we use the Norwegian data and subtract the 7% natural gas supply from Russia, some 11-12% of supply is gone in 2026.

• If the 2025 numbers for Russian gas supply peddled by Reuters are correct (which they may very well be), the EU-UK’s gas supply is reduced by 16-17% this year.

Provided these numbers are somewhat in the ballpark of being accurate, there’s no way in hell a -12 to -16% supply reduction isn’t going to result in a) massive price spikes virtually overnight (as futures traders will price this in) and b) a (most likely deflationary) depression in economic terms.

In other words: good luck, Brussels (and Frankfurt, the seat of the ECB), to try to fix this mess.

Bottom Lines

At the very least, we’re looking at a severe economic shock whose effects will ripple throughout the EU-UK economy in 2026.

Most gov’ts are deeply unpopular already, and public sentiment isn’t too kind to politicos™, experts™, and journos™ pretending that everything is due to evil Russia! Russia! Russia!, to say nothing about the EU’s leadership caste.

Will we see the storming of the Tuileries or Winter Palace—I mean the EU Commission’s HQ in Brussels—by angry mobs of enraged citizens?

I dunno, but I’m certain that 2026 is, in the Chinese proverbial way, going to be a very, very interesting year, least of all for the EUroklatura.

May the rot in hell.

Ceterum censeo Confoederationem Europaeam delenda est.