Norway’s sovereign wealth fund, known globally as the Oil Fund and officially as Norges Bank Investment Management (NBIM), has taken a dramatic step in response to the ongoing war in Gaza. On August 11, 2025, NBIM announced the sale of all its shares in 11 selected Israeli companies, a move that has sent ripples through international financial and diplomatic circles. The decision, as reported by The Associated Press and other major outlets, was prompted by what the fund described as the "serious humanitarian crisis" unfolding in Gaza.
The Oil Fund, which channels the country’s oil and gas revenues into global investments, is the world’s largest sovereign wealth fund, with assets totaling a staggering $1.9 trillion (some reports round this up to $2 trillion for simplicity). As of June 30, 2025, the fund held stakes in 61 Israeli companies, according to an official statement from NBIM. The recent divestment represents a targeted but significant reduction in its Israeli portfolio.
The announcement was made public on a Monday, just days after Norway’s Finance Minister Jens Stoltenberg confirmed that the fund would be adjusting its approach to Israeli investments. The move follows months of mounting domestic pressure and international scrutiny, as public outcry in Norway intensified over the fund’s exposure to companies linked directly or indirectly to the war in Gaza. According to NBIM, "These measures were taken in response to extraordinary circumstances. The situation in Gaza is a serious humanitarian crisis."
Nicolai Tangen, CEO of Norges Bank Investment Management, further elaborated, saying, "We are invested in companies that operate in a country at war, and conditions in the West Bank and Gaza have recently worsened. In response, we will further strengthen our due diligence." Tangen emphasized that the restructuring "will simplify the management of our investments in this market" and reduce the number of companies monitored by the fund’s ethics council.
While the fund did not disclose the names of the 11 companies involved in the divestment, speculation has swirled around whether the sale included a significant stake in Teva Pharmaceuticals, a major Israeli pharmaceutical company previously headed by Danish CEO Kåre Schultz. However, as of the time of the announcement, it remained uncertain if Teva was among the divested holdings, as reported by Norwegian media outlets.
Beyond simply selling shares, NBIM is also terminating all contracts with external managers operating in Israel. The fund will now bring all Israeli investments under direct management, a shift that reflects both the heightened scrutiny and the desire for tighter ethical oversight. This move follows a broader trend of the fund intensifying its scrutiny of Israeli holdings since the previous fall, resulting in the sale of shares in several companies even before the recent announcement.
According to The Associated Press, the fund’s management began reviewing its Israeli investments more rigorously in response to revelations that it had invested in Bet Shemesh Engines Ltd., an Israeli jet engine company that provides maintenance services to Israel’s armed forces, including its fighter jets. This revelation stoked further debate within Norway’s parliament and among the general public regarding the ethical implications of such investments amid an escalating conflict.
The Norwegian sovereign wealth fund is guided by a strict set of ethical principles established by the Norwegian parliament. Over the years, this framework has led to the blacklisting of 11 companies for their involvement in activities deemed to support Israel’s occupation, including, most recently, the Israeli petrol station chain Paz and the telecommunications company Bezeq. The fund’s ethics council is tasked with monitoring and assessing companies for compliance with these principles, which focus on issues such as human rights, environmental protection, and involvement in armed conflict.
Despite calls from some Norwegian parliamentarians for a complete divestment from all companies operating in what is referred to as the "occupied Palestinian territories," the legislature voted in June 2025 against such a sweeping measure. Instead, the fund has opted for a more targeted approach, focusing on companies that fall outside the Norwegian Finance Ministry’s equity benchmark index or those directly implicated in controversial activities.
Norway’s actions come at a time when the country is also taking a more active diplomatic stance on the Israeli-Palestinian conflict. In May 2025, Norway, together with Ireland and Spain, announced their intention to recognize the State of Palestine. This followed a joint statement by Ireland, Spain, Slovenia, and Malta, declaring their commitment to work toward the recognition of a Palestinian state, arguing that a two-state solution is essential for lasting peace in the region.
The divestment and restructuring of Israeli investments by Norway’s sovereign wealth fund have not occurred in a vacuum. The decision reflects a complex interplay of ethical considerations, domestic political pressure, and the realities of investing in a region beset by conflict. It also highlights the growing role that sovereign wealth funds and institutional investors play in shaping international norms through the exercise of financial leverage.
For many Norwegians, the fund’s divestment is a matter of national conscience. The suffering in Gaza has resonated deeply with the Norwegian public, leading to widespread calls for the country’s investments to align more closely with its stated values and international commitments. As one observer put it, "The Oil Fund is not just an economic tool; it’s a reflection of Norway’s moral compass on the world stage."
Still, the move has sparked debate within Norway and beyond. Some critics argue that divestment could reduce Norway’s ability to influence companies and promote change from within. Others worry about the potential financial impact of narrowing the fund’s investment universe. Proponents, however, counter that ethical investing is not only a moral imperative but also a way to safeguard the fund’s long-term reputation and resilience.
Internationally, Norway’s decision is likely to be closely watched by other sovereign wealth funds and institutional investors, many of whom are grappling with similar questions in the face of ongoing conflicts and humanitarian crises. Whether this marks the beginning of a broader shift in global investment practices remains to be seen, but for now, Norway’s Oil Fund has drawn a clear line, signaling that ethics and finance can, and sometimes must, go hand in hand.
With the humanitarian crisis in Gaza showing no signs of abating and debates over ethical investment intensifying, Norway’s move stands as a powerful example of how financial clout can be wielded in pursuit of broader social and political goals.