Norway to review $2tn oil fund’s investments in Israeli companies

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Norway has ordered its giant $2tn sovereign wealth fund to review its investments in Israeli companies after persistent complaints that it has financed businesses aiding Israel’s offensive in Gaza.

Jens Stoltenberg, Norway’s finance minister, ordered the country’s central bank and the oil fund’s ethics council on Tuesday to look into their ownership of Israeli companies due to the “worsened situation” in Gaza and the occupied West Bank.

The world’s largest sovereign wealth fund has become a lightning rod for criticism, with multiple political parties, trade unions and activists accusing the oil fund of investing in companies that aid Israel’s occupation of Palestinian territories and the offensive in Gaza.

The latest outcry comes after Aftenposten, a Norwegian newspaper, this week said the fund had increased its investment in the past two years in Bet Shemesh Engines, which it claimed maintains planes Israel has used in its bombing of Gaza.

Jonas Gahr Støre, Norway’s prime minister, said on Tuesday that he was “very concerned” about the reports and had asked Stoltenberg to contact Norges Bank — the country’s central bank, which houses the oil fund — and get “good answers”.

Stoltenberg said: “The war in Gaza is contrary to international law and is causing terrible suffering, so it is understandable that questions are being raised about the fund’s investments in Bet Shemesh Engines.”

Norway’s centre-left government is coming under mounting pressure over the matter from the opposition just weeks ahead of parliamentary elections on September 8 that are seen as too close to call at present.

The fund had a $15mn stake in Bet Shemesh Engines at the end of 2024, according to data on its holding, giving it a 2.1 per cent stake. The value of its stake was more than four times higher than it was at the end of 2023, shortly after Hamas’s October 7 attack on Israel triggered the start of the war.

Norway’s oil fund had just 0.1 per cent of its $2tn of assets in Israel as of the end of 2024, and is invested in 65 Israeli companies for a total of NKr22bn ($2.1bn).

The independent ethics council — which provides recommendations on which companies should be banned from the oil fund’s portfolio — has since 2009 suggested excluding nine Israeli groups. Two of those came last year, when it investigated a total of 20 Israeli companies over “links to the Israeli occupation of the West Bank and the war in Gaza”.

Nicolai Tangen, the oil fund’s chief executive, told reporters on Tuesday that its investment in Bet Shemesh Engines was made through an external fund manager, and that the Israeli company was not on any exclusion list from the ethics council, the UN or others. He said the fund would now go through “the new information”.

Asked if he understood the strong reaction to the revelations, he replied: “Of course. I see the same pictures as you — it’s terrible to watch.”

Some officials at the oil fund have been frustrated by what they see as the slow pace of recommendations from the ethics council, especially as Norwegian protesters’ ire has been directed several times at Norges Bank at its central Oslo headquarters.

But they are also anxious about balancing public anger over Israel’s offensive in Gaza with avoiding being caught up in a political storm in Israel, and especially the US, if the fund divests from too many Israeli companies.

Bet Shemesh Engines did not immediately respond to a request for comment.