Oslo to re-evaluate wealth fund's ties to Israeli defense firms

The Norwegian government on Tuesday announced it would reevaluate the country’s sovereign wealth fund’s ties to Israeli defense companies. Oslo reportedly wants to ensure that its vast $1.9 trillion fund is not investing in firms linked to the ongoing war in Gaza or to the “occupation” in Judea and Samaria, also known internationally as the West Bank.

Norway’s Prime Minister Jonas Gahr Støre expressed his concerns in an interview with the country’s public broadcaster NRK. 

“We need clarification on this matter because what I’m reading causes me discomfort,” Støre said. 

The statement from the Norwegian premier comes after the news outlet Aftenposten revealed that the country’s wealth fund had acquired stocks in the Israeli jet engine producer Beit Shemesh Engines during the period 2023 to 2024. Located close to Jerusalem, the company provides central components to the Israeli Air Force’s fighter jets and other IDF military units.

The Norwegian wealth fund’s stakes in the Beit Shemesh company reportedly increased from 1.3% to 2.09% and reached a total of $15.2 million in shares by the end of 2024. 

Norwegian Finance Minister Jens Stoltenberg says the country plans to evaluate all its holdings in Israeli stocks and ensure that they are consistent with the fund’s ethical council. 

By the end of 2024, the Norwegian wealth fund had invested $1.95 billion in 65 Israeli companies. 

In May, the Norwegian wealth fund announced it would divest from the Israeli company Paz Retail and Energy due to its operational gas stations in Jewish communities in Judea and Samaria. 

Norway’s Council on Ethics argued at the time that the fund does not want to be linked to “Israeli settlements,” which the Norwegian government opposes due to alleged violation of international law. 

“By operating infrastructure for the supply of fuel to the Israeli settlements on the West Bank, Paz is contributing to their perpetuation. The settlements have been established in violation of international law, and their perpetuation constitutes an ongoing violation thereof,” the council claimed without elaborating. 

Most of Israel’s leading companies are directly or indirectly affiliated with Jewish communities in Judea and Samaria, which have, in practice, become suburbs of Jerusalem and are adjacent to Israel’s central Tel Aviv region. It is therefore unclear how the Norwegian government intends to assess the Israeli companies.

International calls for boycotts and divestments against Israel have increased dramatically since the Hamas atrocities against Israeli civilians on Oct. 8, 2023. 

Despite its comparatively tiny investments in Israel, the Norwegian wealth fund reportedly considered divesting from Israeli companies already in 2022. 

Norway, an affluent Scandinavian country with strong social democrat traditions, has emerged as one of Israel’s harshest critics in Europe. 

In May, Norway joined Spain and Ireland in unilaterally recognizing a “Palestinian state” despite objections from Israel that such a diplomatic move constituted a major reward for Hamas’ Oct. 7 atrocities against Israeli civilians, including women, children and elderly Holocaust survivors. 

Ignoring Israel’s legitimate concerns, Norwegian Foreign Minister Espen Barth Eide stressed at the time that “for more than 30 years, Norway has been one of the strongest advocates for a Palestinian state. Today, when Norway officially recognizes Palestine as a state, it's a milestone in the relationship between Norway and Palestine,” Oslo’s top diplomat argued.