Workers in Norway, the largest producer of natural-gas in the world, went on strike on Tuesday, the union leading the industrial action said.

The Lederne labor union is on strike and 15% of Norway's offshore oil and gas workers are members. According to Norway's statistics agency, May's inflation was the highest since 1988 and they are demanding wage increases.

The proposed wage agreement was defeated by Lederne union members. The oil and gas labor unions are not on strike.

Norway is the largest producer of oil and gas in the region. 20% to 25% of the EU's and UK's natural-gas demand is supplied by the country.

According to the Norwegian Oil and Gas Association, the strike will cut Norway's gas production by 13% and oil production by 130,000 barrels. A quarter of Norway's natural-gas output and 15% of its oil production could be cut if the union goes ahead with its plan on Saturday.

Natural-gas supplies for Europe are already tight

At a time of tight natural-gas supplies for Europe, the strike comes at a time when Russian state gas giant Gazprom has already cut gas flows to Germany via the keyNord Stream 1 line by 60% from last month. There are other countries in Europe that are supplied by the pipe.

Germany's economy minister said last week that natural-gas flows may not resume after the scheduled works.

ING's head of commodities strategy wrote on Tuesday that this is not great for the EU, given the region is already having to deal with reduced flows from Russia.

After Russia slowed supplies to the country, Germany moved into the second stage of its emergency gas plan. The country may start rationing natural gas in the last stage of the plan if the situation gets worse.

Industry would be the first to suffer supply cuts under the country's emergency plan. Business leaders and unions in Germany said that the move could cause job losses.

Natural gas futures in the Netherlands went up 10% on Monday due to the strike in Norway.