Norway government budget in peril over oil, wealth fund’s Israel investments

Norway’s minority Labor government failed to win backing for its 2026 draft budget by an end-November deadline, but talks will resume in parliament to find a compromise over oil drilling and the wealth fund’s Israeli investments, a negotiator says.

The Norwegian parliament is due to vote on the budget on Friday, and Prime Minister Jonas Gahr Stoere could be forced to call a vote of confidence if no agreement is reached by then, putting his cabinet on the line.

The Labor Party government narrowly won a second term in a September election, but the result left it reliant on four small left-wing parties to pass the budget, with only two of those, the agrarian Center Party and the far-left Red Party, agreeing so far.

The climate-focused Green Party, which wants a gradual phaseout of the oil industry by 2040, walked out, as did the Socialist Left over its objections to investments by Norway’s sovereign wealth fund in Israel.

Stoere has said that Norway, Europe’s biggest supplier of gas and a major oil producer, should continue to explore for hydrocarbons to sustain the country’s biggest industry. The government also objects to demands that Norway’s $2 trillion sovereign wealth fund should divest from all Israeli firms, arguing that only companies involved in the “occupation of Palestinian territories” should be excluded.