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I'm not sure if people are suggesting that oil itself is a magical solution or if they're suggesting that having exclusive access to an extremely profitable resource (oil) enables a country with a tiny population to make socialism work.
I have a strange feeling that if oil became worthless Norway would quickly stop doing socialism well
Not sure I understand this obsession with Norway. Its neighbors are doing just as well, and are just as "socialist" by American standards. The only substantive difference is that they don't have sovereign wealth funds worth trillions. Because, all that oil money - Norway does not spend it. It keeps it for a rainy day. What makes Norway successful is not the oil money. The winning formula is human capital, not natural capital.
Denmark is as successful a country as Norway on pretty much any metric.