YS analysis: The consequences of the Iran war for Norwegian working life

On Saturday, February 26, the US and Israel launched an attack on Iran. The military operation, which was named “Epic Fury,” did not come as a complete surprise. Talks had been ongoing for months. Many hoped that a negotiated solution would come. Instead, the US and Israel launched a massive airstrike on Iran.

The war has now lasted almost two months and the consequences so far are clear: This is a catastrophic war, with only negative consequences for everyone, including us here in Norway.

President Donald Trump and his advisors had several goals for the war. So far, they have not achieved a single one of them.

The clerical regime in Iran has tightened its grip on the civilian population

The main goal of regime change in Iran seems further away than it has been in a long time.

There is little indication that the regime is collapsing, despite the fact that Iran's supreme leader, Ayatollah Ali Khamenei, was killed early in the war and that about 50 top leaders within the Iranian Revolutionary Guard, intelligence organizations and other high-ranking military commanders have also been killed.

Instead, Iran is now led by Ali Khamenei's son, Mojtaba Khamenei. He is considered a religious and political extremist. The war has likely tightened the grip of the cruel clerical regime on the population even more.

Iran's nuclear program has not been discontinued

The Americans' goal of destroying Iran's nuclear program also does not seem to have succeeded. It is true that Trump claims that Iran has agreed to end its nuclear program, but so far we only have his word for it. Experience shows that Trump is not a man to be trusted.

Iran still has uranium, installations for the production of nuclear weapons, and regime-loyal engineers and other professionals, which means that the country can probably continue its work on developing its nuclear industry, including nuclear weapons.

Neither Israel nor the United States have so far achieved any of their main objectives in the war.

The program has probably been set back a few years due to the bombing of various installations, such as the Fordow uranium enrichment facility, the Natanz nuclear power plant, and the Isfahan Nuclear Technology Center. All of these were bombed in 2025.

It is unclear whether the military attacks in 2026 have caused any further damage.

Iran's military strength is likely greater than thought

The goal of destroying Iran's conventional military forces, so that they no longer pose a risk to Israel and other countries in the region, has not been achieved either. On the contrary, the war so far has shown that Iran's forces are probably larger than initially thought.

At the same time, the war has exposed weaknesses in the Israeli missile shield. 25 Israelis have been killed and over 7,000 injured by Iranian missiles and drones.

Iran has not been in direct military conflict since the 90s and has since built up an enormous military force, not least missiles and their feared drones, which the Russians also use in Ukraine.

How much of the Iranian military remains intact is uncertain. Before Operation “Epic Fury,” analysts estimated that Iran had 3,000 ballistic missiles and tens of thousands of attack drones. They also concluded that Iran had a significant production capacity to increase its stockpiles.

In the first six weeks of the current conflict, Iran used at least 650 missiles to attack Israel and hundreds of other targets in the region. The United States has placed a strong emphasis on attacking missile production and storage facilities, but it is difficult to determine how many missiles and drones the Iranian military may still have.

There is little indication that neither Hamas nor Hezbollah has been defeated.

Another important goal for the United States, and especially Israel, was to stop Iran's support for militant groups such as Hamas in Gaza and Hezbollah in Lebanon.

Here the attacks on Iran have probably had some effect, in that the Iranian leadership has its hands full defending itself. This means they have fewer resources available for their proxy forces around the region. There is little indication that either Hamas or Hezbollah have been defeated, despite Israel also attacking Lebanon with full force.

Both individuals and businesses must prepare for high fuel prices for a long time to come.

The Israeli bombing of Lebanon has so far cost more than 2000 lives, while just over 7000 have been injured.

The conclusion is therefore that neither Israel nor the US have so far achieved any of their main objectives in the war. What they have achieved, however, is to create so much destruction and chaos that the consequences are felt in almost every country in the world, including here at home in Norway.

The war has dramatic consequences for everyone – including Norway.

The war has severely restricted shipping through the Strait of Hormuz, which at its narrowest measures just under 50 kilometers, transports a fifth of the world's oil and gas.

The debate about increased fuel prices is well known. Pump prices in Norway were approaching 30 kroner per liter, and just before Easter, the Storting majority forced the government to lower a number of fuel taxes. The gasoline tax was cut by 4,41 kroner and the diesel tax by 2,85 kroner per liter from April 1. At the same time, the CO₂ tax on mineral oil for fishing was set to zero. The tax cuts lead to a loss of tax revenue for the state of approximately 6,7 billion kroner.

This will probably only have a temporary effect. Both private individuals and businesses must prepare for high fuel prices for a long time to come.

It is not just oil and gas supplies that are affected. Almost half of the world's sulfur exports come from the Gulf region, as it is a by-product of oil and gas refining. Sulfur is used in everything from the production of fertilizers, chemicals, copper and computer chips. Helium is produced in Qatar and used for cooling in chip factories. There are even more examples of the wide-ranging impact of the war.

Several Norwegian businesses are now feeling the consequences of the war

Norwegian fertilizer manufacturer Yara warns of major challenges for the production of synthetic fertilizers, which are dependent on both sulfur and large amounts of energy. This is tough for Norwegian farmers, but could also lead to famines in other parts of the world.

Technology companies are another example. They are now pressured by both high energy prices, but also shortages of sulfuric acid and helium.

Norway earns more money with increased oil and gas prices

The "positive" thing is that we in Norway make more money from increased oil and gas prices.

Higher energy prices provide increased revenues for Norway as an exporter of oil and gas. Estimates from Nordea, among others, indicate that Norway could have additional revenues in the order of NOK 1–1,5 billion per day as a result of the price increase.

These estimates are based on both the oil and gas markets. Oil prices have increased from around 70 to close to 100 dollars per barrel at times, while European gas prices (TTF) have risen significantly measured in euros per MWh.

The Norwegian Confederation of Employers and Employers (NHO) claims that eight out of ten companies have been negatively affected by the war.

At the same time, the Norwegian economy is weakening in other areas. Norway is a small, open economy, with a high import share. Increased prices for energy, freight and input factors result in higher costs for both households and businesses. For industry, which already operates in a high-cost country, this could weaken competitiveness.

In addition, the war is creating enormous uncertainty in the markets. The Norwegian Confederation of Employers (NHO) claims that eight out of ten companies have been negatively affected by the war and that one in four is considering canceling investments due to the uncertainty that now characterizes the global economy.

The war has led to trans-Atlantic distrust and discord within NATO

Another consequence is that transatlantic distrust and discord within NATO have been intensified as a result of the war.

President Trump is very unhappy that many of the European NATO allies have been little supportive of the US war. Now that the war is going slowly, and the Americans are not achieving the results they want, Trump's anger towards Europe is intensifying. For us in Norway, this means that we must take greater responsibility for our own security. This means increased defense spending and less money for other purposes.

The security policy consequences of the war in Iran are also affecting the war in Ukraine. Talks about peace in Ukraine have stalled, while Russia is making good money from the increased oil and gas prices. Again, this means a lot to Norway, which spends enormous resources supporting the Ukrainian side and at the same time accepts many Ukrainian refugees.

We must not forget the increased terrorist threat. Iran has many extremist supporters – both individuals and organizations who, in their hatred of Israel and the United States, can strike against anything perceived as Western.

According to many intelligence experts, it is no longer a question of if, but when and where a major terrorist incident stemming from the Iran-Iran war will strike. In addition, Iran itself probably has the resources to hit Western countries with cyberattacks and other forms of sabotage.

Three important choices to mitigate the crisis

The Iran war is contributing to increased instability in a world that was already very turbulent. Even though there is no crisis in Norway yet, we should initiate more measures to counteract the negative consequences of the Iran war.

First, we must be prepared for increased price increases. Many of us can handle somewhat higher prices, but many of us will also struggle. If the forecasts of more interest rate hikes from Norges Bank come true, things will be even tougher. Therefore, the government and the Storting should be prepared to provide extraordinary support to those who need it most. Measures such as lowering fuel prices for everyone are not effective enough. Instead, we must find what gives those who need it most the most support.

Tripartite cooperation has carried Norway through crises in the past. Now it may become relevant again.

Secondly, the government should prepare focused crisis packages for the part of the business sector that is at risk. Most of the Norwegian business sector is doing very well and has managed well through the turbulent years we have behind us. But at the same time, some industries are struggling. Construction is one example. The high interest costs are also a major challenge for many municipalities, which are important employers. The authorities should continuously consider support packages for those parts of the business sector and municipalities that will struggle going forward, and in particular design packages that ensure continued high employment.

And finally, the entire Storting should show responsibility. Responsibility in both economic policy and security policy. This is not the time for experiments and unnecessary political twiddling.

In this context, tripartite cooperation should be an important role model. If we are to manage the crises that lie ahead, the actors in the Norwegian tripartite cooperation, authorities, employers and employees, should show responsibility and cooperate.

Tripartite cooperation has carried Norway through crises in the past. Now it may become relevant again.