One of the better-known facts about Norway is that its sovereign wealth fund, fattened by decades of oil revenue, is the largest and wealthiest in the world. Valued at nearly $2 trillion, the fund is arguably the most powerful instrument that Norway has when it comes to influencing international trade policy.
In that sense, Norway’s election on Sept. 8 may turn out to be a watershed moment for the fund. And depending on what the incoming government does, it could well put the Scandinavian nation on a collision course with the United States as Oslo seeks to further sanction Israel—and those, including Americans, who trade with Israel—over what current Prime Minister Jonas Gahr Støre of the Labour Party has called its “barbaric” actions in Gaza.
While Labour commanded a comfortable lead in the opinion polls on the eve of the election, Støre will still have to form a coalition with smaller parties if he is to obtain the 85 parliamentary seats needed to govern. With the collapse this year of its coalition with the moderate Centre Party, the obvious candidates are situated to the left of Labour, including the Socialist Left Party (SV), the communist Red Party (R) and the Green Party (MDG). Knowing that it can extract a high price for joining a coalition government, the SV has asserted a non-negotiable demand for the sovereign wealth fund to divest its equity in a range of international companies—Israeli, of course, but also, according to the Norwegian news outlet Aftenposten, American, British, German and Taiwanese.
So far, eight U.S. companies have been selected for divestment that would amount to around $13 billion. Among those on the list is the construction equipment firm Caterpillar, long a bête noire of the pro-Hamas solidarity movement for its supply of bulldozers and similar vehicles to Israel, which the fund already divested from last week. It includes as well the Wisconsin-based defense manufacturer Oshkosh Corporation; aerospace and defense manufacturer RTX; travel and hospitality companies Airbnb, Booking Holdings, Expedia and TripAdvisor; and communications giant Motorola.
That list will doubtless be expanded as Norwegian politics become further immersed in the anti-Zionist ideology that has crystallized as the dominant form of antisemitism in this century. In some ways, Norway echoes similar trends observed elsewhere in Europe, where Israel’s war to defeat Hamas in Gaza has become a domestic issue with practical implications for electoral candidates who choose the “wrong” side. But in others, Norway is distinct.
“This is a story that started with the collapse of the Oslo process,” Prof. Torkel Brekke, a fellow at the Centre for Research on Extremism at the University of Oslo, told me. During the 1990s, Norwegian mediators played a central role in securing a peace agreement between Israel and the PLO that resulted in the creation of the Palestinian Authority, but which disintegrated when the late PLO leader Yasser Arafat launched the Second Palestinian Intifada in 2000. As the conflict has intensified over the last 25 years, Norway—perhaps wounded by the ignominious end of a peace agreement with which it was so closely identified—has placed exclusive blame on Israel for that outcome.
As Brekke explained, the left and its associated labor movement have been in the driving seat here. “It really comes from the Confederation of Labour Unions (LO),” he said. “The peculiar thing to know about Norway is that the LO to some extent controls the Labour Party. They have seats on its executive, and they coordinate daily on foreign policy.”
More than anything else, the LO wants to coordinate on targeting Israel. Brekke recounted that he had spoken with labor movement officials in neighboring Sweden and Denmark, who expressed concern with what one called the LO’s “obsession” with the issue. “It’s reached a point now where boycott and divestment are at the top of the LO’s agenda, and it is pushing that agenda into the Labour Party,” Brekke said. “Anti-Zionism is driving the boycott campaign.”
By targeting companies that employ thousands of American workers, Oslo has hit a raw nerve.
Since the Hamas pogrom in Israel on Oct. 7, 2023, Norway has divested from more than 20 Israeli companies and banks, including telecom group Bezeq, Bank Leumi and Bank Hapoalim. In tandem with these government-directed moves, antisemitism has surged in Norway. The country’s tiny Jewish community of 1,500 has endured threats and vandalism, with 69% of Norwegian Jews reporting incidents impacting them personally.
Norway’s interventions are also becoming more vindictive. To give the most recent example, Israel’s national soccer team is due to play Norway in a World Cup qualifier on Oct. 11; the Norwegian authorities have told the Israelis that they may arrive only one day before the match, while proceeds from ticket sales will go to Palestinian organizations. “It would be nice if some of the money went toward condemning the Oct. 7 massacre or toward the release of 50 hostages,” the Israel Football Association stated in response. “Please ensure the funds are not transferred to terrorist organizations or for illegitimate purposes.”
The question remains as to whether Norway—by casting its divestment net wider than just Israel—will have bitten off more than it can chew. The U.S. State Department has already expressed its disgust at the divestment from Caterpillar, while Sen. Lindsey Graham (R-S.C.) has warned that Washington may respond with tariffs and visa revocations.
With its vast wealth and miniscule population of under 6 million, Norway may feel that it has the right to morally police the world. But that hubris is no match for America’s clout. By targeting companies that employ thousands of American workers, Oslo has hit a raw nerve.
Should the Caterpillar decision be followed by a wider divestment campaign aimed at the hundreds of American companies that conduct daily business with Israel and even locate some of their infrastructure there, Norway can expect to be punished with heavy tariffs. Washington also can—and should—reverse the visa-free travel Norwegian citizens enjoy under the U.S. government’s 90-day stay visa waiver scheme. Additionally, America can sanction individual Norwegian politicians who push antisemitism and promote Hamas terrorism, as it has already done with Francesca Albanese, the U.N.’s special rapporteur for Palestinian rights.
Nearly 20 years ago, best-selling Norwegian children’s author Jostein Gaarder penned a viciously antisemitic article defaming Judaism as an inherently violent religion and denying the State of Israel’s right to exist. Those sentiments have now infected large swathes of the country’s governing class. The time for patient discussions is over. If Norway really wants to take on the United States as well as Israel, it might quickly rue the day it did so.
