Norway's Budget Talks Collapse as Green Party Withdraws Over Oil Policy Disagreements

Budget Negotiations Reach Impasse

Negotiations over the Norwegian Labour government's proposed 2026 state budget have collapsed, following the withdrawal of the Green Party (MDG) and a 'pause' in talks by the Socialist Left Party (SV). The breakdown occurred over the weekend of November 28-29, 2025, after two weeks of discussions involving the Labour Party (Ap), Center Party (Sp), SV, MDG, and the Reds (Rødt). The primary point of contention centered on Norway's future oil policy and climate commitments.

The Labour government, led by Prime Minister Jonas Gahr Støre, now faces the challenge of securing parliamentary support for its budget without the backing of these key left-leaning parties. The budget was originally slated to be finalized by Sunday, November 30th, with a parliamentary vote expected by Friday, December 5th.

Deep Divisions on Oil and Climate Policy

The core of the disagreement lies in the differing approaches to Norway's substantial oil and gas industry. The Green Party and the Socialist Left have advocated for more aggressive climate action, including a phased reduction in petroleum activities. Their demands included:

• Halting exploration for new sources of oil and gas
• Developing a concrete plan for phasing out Norwegian oil and gas operations
• Increasing fees for carbon emissions
• Introducing a new fee on oil and gas production to finance climate measures in developing countries

In contrast, the Labour Party and the Center Party have been reluctant to commit to such changes. The Center Party, described as 'even more pro-oil than Labour,' reportedly succeeded in removing a proposal to increase petrol and diesel taxes from the budget. This stance frustrated the Greens, who felt Labour showed 'no movement, only ultimatums.'

Statements from Withdrawing Parties

Ingrid Liland, the Greens' chief negotiator, expressed her party's frustration, stating, 'We have stretched ourselves far and been willing to go along with several issues that are difficult for us, but we don't see the same goodwill from Labour. We don't see any movement, only ultimatums.' The Greens' leader, Arild Hermstad, further emphasized their position, remarking, 'Not enough is being done for the climate, there are too many camels to swallow here,' and adding, 'We couldn't approve and vote for a budget that weakens climate policy in Norway.'

The Socialist Left Party also voiced similar concerns. Espen Løkeland-Stai, SV's communications chief, noted, 'We don't see any real willingness to come closer on issues that are important to us, and would make sure that this is a budget for welfare, the environment and solidarity.' SV indicated they would resume negotiations 'when the Labour Party shows adequate willingness to meet us halfway.' SV leader Kirsti Bergstø later commented, 'If Ap has the will to compromise, we can achieve a budget for welfare, the environment and more solidarity with Palestine.'

Implications for the Labour Government

The breakdown leaves the minority Labour government in a precarious position, as it now lacks a majority to pass its 2026 budget. Election researcher Johannes Bergh warned that Norway could face a 'government crisis' if an agreement is not reached. Prime Minister Støre, however, has expressed hope that the Greens can still be brought back to the negotiating table.

The proposed budget for 2026 includes measures such as cheaper childcare costs and adjustments to tax rates. The government also plans to increase spending from its Government Pension Fund Global for 2025, with the structural non-oil fiscal deficit projected to rise. The CEO of Norway's state oil company, Equinor, Anders Opedal, expressed concern over oil policy being a central point of budget negotiations, suggesting such discussions should occur within the Parliament's usual procedures.