Panic broke immediately in trading floors in Asia, where it was the middle of the afternoon, and in Europe, where the trading day was just starting. After 2 minutes, oil prices reached 85$/bl ; after 7 minutes, the symbolic level of $100 was breached, but that was not enough to calm down anything. After 15 minutes, the prices has reached 145$/bl and showed no sign of slowing down in their vertigious increase, as traders frantically tried to grab whatever cargoes were available on the market. Frantic phone calls to oil companies on the ground and to Norwegian authories yielded little. Oil companies confirmed having received the instructions, and were already urgrently assessing the technical constrants of shutting down production on their platforms.

After 45 minutes, with most of the world still unaware of the sudden crisis, oil prices had reached 232$/bl and started gyrating wildly in the $200-$250 range. Behind the scenes diplomatic activity was building up, and pressure on the Norwegian authorities became rapidly intense, but the only reaction from all Norwegain ministries or Statoil, the national oil company was "We confirm the decision to suspend exports but we have no information beyond the communiqué that has been published." The first official reaction came from Brussels, with a short communiqué from the European Commission urging the Norwegians to reverse their decisions and to explain the rationale behind such a disruptive announcement which put Norway in direct breach of trade agreements and association agreements with the EU. The communiqué also urged Europeans not to panic, by reminding that Europe had 90-days' worth of strategic reserves and that consultations on whether it was necessary to tap into these reserves were already under way. It stated that in any case oil supplies in Europe would be maintained and expected a quick resolution of this crisis.

That swift reaction, and the explicit reference to the strategic reserves calmed down the markets, which nudged down prices to $160. Similar comments and reactions started pouring from European capitals, all strongly urging Norway to reverse its incomprehensible decision. Nevertheless, all European stock markets opened sharply down, with losses between 5 and 10% and wild price movements. The shares in oil companies were especially volatile, as operators tried to assess the losses from lower production in Norway versus the potential income gains on overall production thanks to higher prices. Oil stockes generally bucked the trend of the market and were higher.

 But the announcement by Total, at around 10:30 am, that a Norwegian Navy ship was cruising nearby the Ecofisk platform, one of the biggest in the Norwegian offshore sector, and had been in touch with their platform operators to confirm the instructions of the morning, sent the markets into a new frenzy. Prices reached $440 per barrel and remained above $400.

More reactions came in. OPEC indicated its surprise and confirmed that it would increase production as much as capacity allowed to compensate for the future missing Norwegian production. Saudi Arabia announced that it would put on the market immediately an extra 1.5mb/d of spare capacity. However, these declarations did little to reduce prices as the Saudi crude was known to be of an inadequate quality for the European refineries suddenly deprived of Norwegian crude.

As the deadline for the 1pm anouncement approached, markets held their breath and trading slowed down, with prices remaining around 400$ per barrel. Teams within oil companies, traders and banks tried to assess the impact on the global oil supply of the brutal disappearance of close to 3mb/d (just above 3% of world production) and tried to guess how long the situation would last. Norwegian authorities, despite massive pressure from other governments and hounding by everybody from the press, oil companies and onlookers, stuck to their two line statement.

The 1pm announcement, read by a government spokesman and shown on every television channel  on the planet, struck like a bomb.

"World oil production has been stagnating in the past year, even as global demand has kept on increasing briskly,despite sharply rising prices. It is the official consideration of the Norwegian government that, for all practical purposes, peak oil has occurred, and we all have to adjust to a new world of scarce and expensive oil. In this context, the government of Norway considers that it is its duty to preserve for future generations the limited reserves of this most valuable resource that have been endowed to the country, and it has thus decided to totally suspend all exports. It was decided to make this announcement without warning to avoid market manipulation and limit speculation. The authorities of Norway will liaise with all operators to ensure a timely and safe climbdown from current production levels to those required by the internal needs of Norway, taking into consideration existing production plans. It is the opinion of the government that expected higher prices for oil in the future will be adequate compensation to all operators for lower production levels. Navy ships have been dispatched in the offshore areas to enforce, if necessary, the suspension of exports, but we trust that all will behave responsibly. There will be no further communications today".

The effect was immediate. Prices started climbing again, as panic set in and buyers tried to get access to oil at any price while sellers disappered. Prices jumped in discrete increments. 460$, 534$, 647$, 752$. Brutal gyrations happened.

At 1:15 pm, the IEA, the USA and the European Commission send a joint communiqué announcing that 3mb/d of oil from the strategic reserves would be released immediately on the markets in order to stabilise prices in the short term by compensating for lost Norwegian supply. The market took a breather as prices tumbled back to $250 per barrel, and traders frantically tried to understand for how long the strategic reserve would be made available, and how long it would last at such rates of use.

At 2pm, again, in a joint declaration, the IEA, the USA and the EC confirmed that the strategic reserves would be tapped for as long as it took to convince the Norwegians to change their minds and reverse their decision, and indicated in the strongest terms that such disloyal behavior from a friendly country was incomprehensible and unacceptable and would trigger the most stringent review of bilateral relations. The USA indicated that an aircraft carrier currently running exercises near Iceland was being ordered toward the North Sea in order to be able to assess the situation.

The hint of a military intervention sent prices upwards again, toward $350. As the markets opened in the USA, and many operators there discovered the situation, the frenzy on all markets increased. The Dow Jones opened down 4%, and continued on a downwards slide.

Authorities everywhere alternated between calls to Norway to reconsider its decision, announcements of emergency meetings, and soothing declarations for the public that there were no shortages and that supplies would continue to be provided, including through the use of the strategic reserves. All TV channels had switched their normal programming to non stop coverage of the crisis, with breathless commentary on the potential impact on gas prices, ponderous discussions on the origin of supplies in each country, and coverage of market reactions. All channels scrambled to find experts able to explain in simple words what "peak oil" meant. Most websites specialising in discussion of peak oil had crashed early on, as millions of people were directed to them by Google searches.

In the absence of any hard information, with Oslo seemingly having closed down completely and hunkered down in the face of a massive onslaught of questions, requests for information and ominous declarations to rescind their order, markets slowed down. Prices nudged down slowly to $160 as operators began to believe that Norway would never stand by its decision. Sporadic news from oil producers in the country indicated that they were slowly reducing their production and cancelling cargoes confirmed that production was indeed starting to wind down in the country.

At 5pm, as European markets had closed down after a hectic day, with most stock markets down by 7 or 8%, and oil around 150$/bl, a new communiqué was unexpectedly distributed by the Norwegian authorities:

"Norway has decided to resume oil exports, effective immediately. We have noted with disquiet, but little surprise, the impact of our earlier announcement this morning suspending exports. Stock markets down 8% in one day, oil prices tripling, after having reached a peak at more than $750$/bl, unprecedented diplomatic pressure from our friends in Europe, America and around the world. We would like to point out that such havoc was created solely by the announcement of a 3% reduction in global supplies. This underlines the extraordinary tightness of the oil markets today, and their extreme vulnerability to any kind of supply shock. While our announcement this morning that we would suspend our oil exports was only a test, now ended, designed to make clear to everybody that our current oil consuming patterns are absolutely unsustainable, our declaration with respect to peak oil stands, and is fully confirmed by today's events. We believe that we have entered a time of unprecedented change, with oil no longer plentiful nor cheap. It is our foremost responsibility to plan for this absolutely predictable event and to concentrate the massive wealth of our economies towards developing, on a large scale, sustainable forms of transport, housing and industrial activity. We need to focus on lowering our energy consumption, and switching to renewable sources. The price of doing nothing, as shown today, is steep. We will announce in the coming days a national plan for Norway to reach 100% renewable energy use by 2025. While we apologise to our friends around the world for the unwarranted scare today, we hope that they will remember that next time, there will not be a friendly government to "switch the lights back on", and that they can expect similar oil price hikes to those seen today, with the corresponding economic disruption. We hope that this lesson will be pondered by all. Again, we will resume full exports as of tonight, but can only repeat the need to move away from oil - or to have to face similar crises in the very near future. Call this the Day of the Oslo Warning."

The announcement that the crisis was over sent the markets soaring in the USA, with the Dow instantly regaining the 9% it had lost so far in the day. Oil prices initially dropped back below $100, to $90. But as the "Oslo Warning" started to sink in, oil prices started moving up again, stabilising at around 150$, i.e. exactly the sme price as before the announcement. On the stock market, prices went down a little bit, but this average hid massive differences between stocks suddenly deemed to be able to profit from a new era of expensive energy and those that would be hurt. Car manufacturers suffered most, but again, with a clear selection between those seen as competitive in the production of energy efficient vehicles and others. Coal companies jumped, as did electrical equipement companies like GE or Siemens. Software companies and those providing internet services or infrastructure gained. In just a few hours, a massive reallocation of capital was suddenly under way.

The world would never be the same, and the Norwegians were the unexpected heroes of the day.