Norway’s Sovereign Wealth Fund Pinched by Cheap Oil

Bloomberg, Brendan Greeley – 11/08/2015

Due to falling oil prices the Norwegian government has been “dipping” into their Sovereign Wealth fund. Norway’s Sovereign Wealth fund is one of the largest in the world at $875bn owning 1.3% of the world’s equities. The recent announcement from Norway’s prime minister that she was prepared to let that fund get a little smaller according to Bloomberg Single Best Chart has come as a surprise. Norway treats oil revenue separate in its budget according to data collected from the Norge bank and Norwegian Government. Interestingly, non-oil revenue is much higher than oil revenue. The Norwegian Government sets oil revenue aside for two purposes. 1. It is paid into the annual budget. 2. It is paid into the Sovereign Wealth Fund. Some years it doesn’t need to be paid into the annual budget at all! As oil prices fall the sovereign wealth fund is decreasing in value and the annual budget is increasing in value.

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