The oil industry’s threat to lock out all offshore staff from their workplaces from midnight (2200 GMT) on Monday was averted when a last-minute settlement was ordered by Norway’s government between striking oil workers and employers. The move will also alleviate market fears over a full closure of its oil industry and a steep cut in Europe’s supplies.

Crude prices were on the boil following the strike over pensions and the oil markets took a breather on news of the intervention and crude prices eased in earlier Asian trade. Norway’s economy depends to a large extent on the oil industry and the government has taken stiff action, which is permitted under Norwegian law, on previous occasions also to protect the industry.

However, the government was slow to intervene in the latest dispute which had entered its third week, as it only intervened minutes before the start of the lockout. A full stoppage of oil production in Norway would have led to a shortfall of more than 2 million barrels of oil, natural gas liquids and condensate per day.

Norway’s Labor Minister said that taking the decision to protect the country’s vital interests was not an easy choice but it had to be done. She said that the main concern was the potential cut in gas supplies as the country is the second-biggest gas exporter by pipeline, with the majority of supplies going to Britain, the Netherlands, France and Germany.

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