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Norway’s sovereign wealth fund has recorded a substantial rise in the financial value of its Israeli corporate holdings during the first half of 2026. The increase in returns has provoked sharp criticism and renewed ethical concerns from humanitarian organizations, legal experts, and advocacy groups as the devastating conflict in the Gaza Strip persists.
The fund, recognized as the largest sovereign wealth vehicle in the world, held investments in Israeli firms that reached a total valuation of $2.4 billion in the first six months of 2026. This performance represents an increase of 15.7 percent compared to the fund’s valuation at the close of 2025, achieved entirely through market gains without deploying any new capital into the Israeli market over that period.
The recent growth follows a notable portfolio reduction in 2025, during which the fund scaled down its exposure by cutting its Israeli corporate investments from 61 companies to 29. At the time of that divestment, managers cited the severe humanitarian crisis unfolding in Gaza as the primary rationale for paring back the portfolio.
Commonly referred to as the "oil fund," the institution was originally established during the 1990s to manage and invest the surplus state revenues generated from Norway's domestic oil and gas sector. The massive pool of capital is formally overseen and managed by Norges Bank under strategic guidelines established by the Norwegian government.
A significant portion of the recent valuation gains stems from specific technology and industrial holdings linked to the Israeli defense sector. For instance, the sovereign wealth fund’s holding in NextVision Stabilized Systems, a manufacturer of stabilized drone-camera technologies, increased in value from $21 million at the end of 2025 to $25.9 million in 2026. NextVision supplies its specialized imaging equipment to the state-owned Israel Aerospace Industries, the country's primary defense and aerospace contractor supplying the military.
Mads Harlem, an international legal expert with Save the Children Norway, argued that the fund must divest from NextVision. Harlem stated that such a divestment should remain in effect as long as the company fails to establish and execute adequate measures to prevent its products from facilitating violations of international humanitarian law.
The sovereign fund maintains stakes in several other contentious enterprises identified by monitoring organizations. According to research conducted by the organization Who Profits, the fund holds shares in One Software Technologies, a firm that provides ongoing maintenance support for biometric identification infrastructure operated by the Israeli Civil Administration at security checkpoints across the occupied West Bank. Additionally, the fund holds an interest in Formula Systems, which supplies software services to the Israeli armed forces through its subsidiary TSG.
Another notable corporate asset in the fund's portfolio is a 1.65 percent shareholder stake in ICL Group. According to findings from the research organization Historians for Palestine, ICL Group contributes to the displacement of Palestinian Bedouin communities in the Naqab Desert through its active mining operations, while also supplying agricultural fertilizers to illegal settlement developments in the occupied territories.
Pal Nygaard, a professor at BI Norwegian Business School and a participant in Historians for Palestine, expressed deep frustration over the oil fund’s ongoing financial involvement with companies like NextVision. Nygaard argued that despite documented evidence connecting certain corporate activities to war crimes, the fund has retained these shares, adding that the state should view the situation as severe enough to justify a comprehensive exclusion of all Israeli corporate entities.
The moral and legal implications of the portfolio have drawn sharp condemnation from solidarity groups within Norway. Rami Samandar, the leader of the Palestine Committee in Norway, emphasized that the sovereign fund commands extraordinary economic and political leverage on the global stage, making its investment choices particularly consequential.
Samandar argued that deploying Norwegian public capital into companies that support Israeli military operations, the occupation, and the associated infrastructure constitutes a failure by Norway to meet its statutory duties under international law. He maintained that using state wealth in this manner aids in sustaining the broader oppression of the Palestinian population and urged an immediate cessation of these investments.
Drawing a direct historical comparison, Samandar pointed out that the Norwegian authorities acted swiftly to freeze all sovereign wealth fund assets tied to Russian corporations following the full-scale invasion of Ukraine in 2022. He argued that identical ethical principles and enforcement standards should be applied toward Israel in light of the severe allegations of war crimes.
In response to the mounting public scrutiny, a representative for Norges Bank Investment Management explained that the fund’s overarching ethical guidelines are currently undergoing a formal review. The Norwegian Ministry of Finance has introduced interim ethical rules and adjustments to the investment mandate while a modernized regulatory framework is being developed.
Under these transitional arrangements, Norges Bank is currently barred from making independent decisions to place companies under formal observation or to enact new divestment exclusions. The spokesperson clarified that the sovereign wealth fund remains broadly invested in strict adherence to the mandate authorized by the finance ministry, which relies on a standard benchmark index that includes the Israeli corporate market.
The government's internal review of the ethical framework is scheduled to conclude by October 15. However, Harlem warned that this interim suspension of exclusions leaves Norway in a compromised position, rendering the state temporarily incapable of fulfilling its international obligations to prevent severe violations of international law.
Furthermore, Harlem cautioned that allowing these investments to persist without intervention risks sending a damaging signal to international financial markets. He warned that global investors might interpret Norway's stance as an indication that standard human rights due diligence and conflict-related oversight regarding potential war crimes are not mandatory requirements when managing capital.
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