Published by Global Banking and Finance Review
Posted on May 11, 2025
By Gwladys Fouche
OSLO (Reuters) -Norway's sovereign wealth fund, the world's largest, said it had sold all of its shares in Israel's Paz Retail and Energy because the company owns and operates infrastructure supplying fuel to Israeli settlements in the occupied West Bank.
The divestment, announced on Sunday, was the second of its kind by the fund after its ethics watchdog in August adopted a tougher interpretation of standards for businesses that aid Israel's operations in the occupied Palestinian territories.
Paz, which says on its website it has also sold and marketed fuel to the Palestinian Authority, declined to comment.
It was the latest decision by a European financial entity to cut back links to Israeli companies or those with ties to the country since the outbreak of the war in Gaza in October 2023.
The move comes amid an intensifying campaign in the Nordic country for the fund to divest entirely from Israeli companies.
The fund's first such divestment was from Israeli telecoms firm Bezeq in December.
The fund, which owns 1.5% of listed shares across 9,000 companies globally, operates under guidelines set by Norway's parliament.
It held stocks worth 22 billion crowns ($2.10 billion) across 65 companies listed on the Tel Aviv stock exchange at the end of 2024, according to its own data. They represented 0.1% of the fund's overall investments.
Paz is Israel's largest operator of petrol stations and has nine stations in the occupied West Bank.
"By operating infrastructure for the supply of fuel to the Israeli settlements on the West Bank, Paz is contributing to their perpetuation," the fund's Council on Ethics watchdog said in its recommendation to divest.
"The settlements have been established in violation of international law, and their perpetuation constitutes an ongoing violation thereof," it added.
The Israeli embassy in Oslo did not immediately reply to a request for comment.
BOYCOTT PRESSURE
The U.N.'s highest court last year said Israel's occupation of Palestinian territories and settlements there were illegal and should be withdrawn as soon as possible, in a ruling that Israel rejected as "fundamentally wrong" and one-sided.
On Friday, Norway's powerful LO trade union voted in favour of a full economic boycott of Israel.
Campaigners say the government should instruct the fund to divest from Israeli companies in the same way it instructed the divestment from Russian companies three days after Russia launched its full-scale invasion of Ukraine in February 2022.
The Labour-led government, which has close ties with LO, is so far resisting the pressure.
"We don't plan to change our strategy," Prime Minister Jonas Gahr Stoere told Reuters on Friday after the LO vote, saying engagement, rather than boycott, was the way to influence behaviour.
"But I hope Israel is reading that this (the boycott) is an expression of a significant part of public opinion," he said.
Norway helped initiate a hearing at the International Court of Justice, held earlier in May, to push Israel on its obligations to facilitate aid deliveries to Gaza.
The government says it is best to let the fund's ethics watchdog conduct its work as per ethical guidelines agreed in parliament. Campaigners say the watchdog works too slowly.
($1 = 10.4531 Norwegian crowns)
(Reporting by Gwladys Fouche in Oslo; Additional reporting by Steven Scheer in Jerusalem; Editing by Leslie Adler, Andrea Ricci and Andrew Heavens)
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