The Effect of a Fall in Oil Prices on the Turnover of Norwegian Enterprises

Abstract

Norwegian enterprises have increased their sales to the oil and gas industry markedly in recent years. In this article, we take a closer look at the petroleum-related turnover of Norwegian enterprises and the effect of a fall in oil prices on turnover. The analysis is based on a survey of enterprises in Norges Bank’s regional network. The responses indicate that a share of sales will be affected if oil prices fall below USD 90 and that a drop to USD 70 or lower will have a severe adverse impact on petroleumrelated sales in the Norwegian economy. Overall, the enterprises estimate that they can only compensate for lost petroleum-related sales to a limited extent by increasing sales in other markets in the first one to two years after a fall in oil prices.