Norway's government intervened to end a 16-day oil strike just minutes ahead of a threatened lockout on Tuesday that would have halted production by western Europe's largest crude exporter.

"The strike is over," labor ministry spokesman Jan Richard Kjelstrup told AFP after the last-ditch deal, which sent North Sea crude prices plunging below the key $100 threshold in Asian trading.

The dispute over pensions between unions and employers - in what is the world's eighth biggest oil exporter - will now go to binding arbitration.

The lockout would have prevented more than 6,500 people from going to work on the Norwegian continental shelf and cut off production of about two million barrels of oil equivalent a day.

Jan Hodneland, a negotiator for the Norwegian Oil Industry Association (OLF) employers' group, said the government had made a "responsible choice."

AFP