Norway’s oil fund has sold out of 32 Israeli companies over the second half of 2025, cutting its Israel exposure from 61 to 29 listed firms, according to holdings data and comments reported by Norwegian media. The Government Pension Fund Global (GPFG) — managed by Norges Bank Investment Management (NBIM) — still held more than NOK 21 billion (€1.84 billion) in Israeli equities at the end of 2025, the same reporting said.
How much Norway’s oil fund reduced its Israel exposure
The sell-down took place in the last six months of 2025, reducing the number of Israeli companies in the portfolio from 61 to 29. Despite the drop in the number of holdings, NBIM’s published holdings overview shows the fund still had more than NOK 21 billion (€1.84 billion) invested in Israeli listed companies at year-end.
In Norway, the fund’s Israel positions have drawn intensified scrutiny since mid-2025, when media reporting highlighted that GPFG was invested in firms linked to Israel’s defence sector. One of the companies cited in the debate, Bet Shemesh Engines — reported to provide maintenance for Israeli fighter aircraft — is among those the fund has since sold out of.
Why NBIM says it sold out of 32 Israeli holdings
NBIM has described the transactions as routine portfolio management rather than a political change of course.
Line Aaltvedt, NBIM’s head of communications, told Aftenposten that the sell-downs reflected risk-based reductions, changes in the benchmark index, and investment decisions. “This is something we do in all markets,” she said, according to the newspaper.
That framing is consistent with how GPFG is governed. The fund’s equity portfolio is managed against a benchmark index set by Norway’s Ministry of Finance (Finansdepartementet), with limited scope for large, country-specific deviations. In practice, that means NBIM can reduce exposure in individual names — and, to a degree, in smaller markets — but still aims to remain broadly aligned with the reference index.
The summer 2025 debate over defence-linked holdings
The most visible wave of criticism came in summer 2025, after reporting that GPFG held stakes in companies seen by critics as supporting Israel’s military operations in Gaza.
Civil society organisations argued that even minority shareholdings can provide indirect financial support, particularly when the fund is invested across supply chains for military technology, surveillance, and logistics. In a statement released on 29 January 2026, the Palestine Committee of Norway (Palestinakomiteen) said the divestments showed that public pressure can matter, but added that it was not sufficient as long as the fund still holds substantial positions in Israeli companies.
The controversy has unfolded alongside updated casualty reporting from the Gaza war. On 30 January 2026, Reuters reported that Israeli media, citing senior military officials, said Israel’s military had accepted an estimated Palestinian death toll of around 70,000 — a figure broadly in line with the Gaza health ministry’s reporting, while Israel has not published an official breakdown of civilians versus combatants.
Ethics-based exclusions are handled through a separate process
Norway’s oil fund has two distinct mechanisms that matter in practice: day-to-day investment decisions made by NBIM, and ethics-based exclusions decided by Norges Bank’s Executive Board after recommendations from the Council on Ethics (Etikkrådet).
In August 2025, Norges Bank announced exclusions of several companies — including Israeli banks and Caterpillar — citing an “unacceptable risk” of contributing to serious violations of individual rights in situations of war and conflict.
Separately, on 18 August 2025, Norges Bank said GPFG had launched a renewed review of its Israel portfolio and had reduced its investments since mid-2025. At the time, the fund reported NOK 19 billion (€1.66 billion) invested in 38 Israel-listed companies as of mid-August 2025, down from the end of the first half of the year.
These formal exclusions are relatively rare and typically take time, because they require documentation of risk under the fund’s ethical guidelines and, in some cases, a decision to sell before publishing the rationale.
What to watch next for Norway’s oil fund and Israel-linked holdings
Two dynamics will shape the next phase of the debate.
First, portfolio mechanics: NBIM may continue to reduce exposure through risk assessments and index-related shifts, but the overall country footprint will still be influenced by the benchmark and by the performance of large listed Israeli companies.
Second, the ethics track: additional exclusions remain possible if the Council on Ethics recommends action and Norges Bank’s Executive Board agrees that the risk threshold is met. For critics, the key question is whether exclusions will extend beyond individual companies to a broader approach to conflict-related supply chains.
For European audiences, the Norway case is also a proxy for a wider issue: how large public investors balance passive, index-driven strategies with the expectation that state-owned funds should avoid complicity risks in armed conflicts. Norway is not an EU member, but its approach is closely watched across Europe because GPFG is the world’s largest sovereign wealth fund — and because its ethical framework is often cited as a reference point in debates about responsible investment.
