How does Norway use petroleum revenue to reduce the effects of changing oil prices?

To mitigate the economic impact of fluctuating oil prices, the Norwegian government established the Government Petroleum Fund in 1990, which was renamed the Government Pension Fund Global in 2006.1

The fund serves as a mechanism to stabilize the economy by depositing budget surpluses into the fund for investment overseas. This strategy helps insulate the domestic economy from the volatility of the petroleum industry, which remains a significant component of Norway's national revenue. By decoupling these excess revenues from the immediate domestic budget, Norway has been able to maintain economic robustness and avoid the severe downturns often associated with drops in global oil prices.12