To a first order effect, stopping production would decrease supply, increasing price, and therefore decreasing demand and therefore overall oil usage, shifting some energy to alternative sources.

Of course second order effects might dwarf that, like the fact that increasing prices would incentivize oil extraction in currently unprofitable locations. That extraction may or may not be more carbon-intensive than Norway's (though probably more if it's currently unprofitable).

It sounds punchy to say "Norway should stop extracting oil" as much as it does to say "It doesn't matter whether they do or not since someone else will", but the reality is much more complex than either of those simplistic zeroth-order approximations.

Precisely. If oil prices get high enough, the Canadian oil sands will begin to be a profitable operation again, and will scale back up to take advantage. At this point, while we're still weaning off of oil - for probably the next 50 years - we need the lowest carbon, least cannibalistic sources of it possible.

Infrastructure takes time to build. A short term price hike in oil costs isn’t going to change how many cars Tesla can manufacture tomorrow. Near term you can build up infrastructure to extract more oil from the same well faster than you can build a new car factory.

The only real change from such a policy is how quickly wells will run dry, but I hope we can abandon oil long before running out is a serious concern.

That's not useless though. It would drive the price up making it easier to scale up on renewables.

Only if there was a large pact of countries doing so. But even that would be dubious, since OPEC and other groups would just increase production. Also there are many oil resources that can be tapped with a slight increase in the prices, so really Norway would just be handing production over to countries like Canada, where local governments would be only too eager to sell the more expensive product.

That is under the assumption oil revenues aren’t efficiently spent on speeding the green transition.

Gotta start somewhere. After all, Norway switching to all-electric cars also won't make a significant reduction in worldwide CO2.

Sure, other wells will produce more. But at a higher price. Higher prices encourage use of greener alternatives.

>After all, Norway switching to all-electric cars also won't make a significant reduction in worldwide CO2.

It bootstraps companies like Tesla, and VW's electric cars. That will lead to more CO2 reductions happening sooner.