The Changing Geopolitics of the Arctic

Written by Alexander Tosato (MSc International and European Politics and Public Policy)

The Main Players

Over the last three decades, the Arctic Council has been the leading intergovernmental regional structure, bringing together representatives of the 8 Arctic countries (Russia, USA, Canada, Norway, Denmark, Finland, Sweden and Iceland) and indigenous peoples. Russia is arguably the most important and influential Arctic nation. Stretching over 53% of the Arctic Ocean coastline and home to nearly half of the Arctic population, it is by far the region’s biggest oil and gas producer and the largest military player in the region. Albeit the historical lack of a truly Arctic strategy, the USA owns the resource-rich and strategically located state of Alaska. Moreover, recent territorial claims over Canada and Greenland by President Trump highlight a renewed interest in the region. 

With almost 40% of its land in the Arctic, Canada is a major Arctic player. Not only is the Canadian Arctic Archipelago extremely resource-rich, but it also constitutes the majority of the North-West Passage, a key shipping route. The Scandinavian countries, namely Norway, Denmark, Sweden, Finland and Iceland control Arctic territories, which guarantee strategic industries, such as oil, gas, mining and fishing. Importantly, all Danish land in the Arctic lies in Greenland, which is an autonomously governed territory of the Danish Kingdom. Greenland’s strategic location and resources make Denmark a major Arctic player. Lastly, it is important to note the role of China. Self-defined as a near-Arctic country, China is increasingly involved in the Arctic, engaging in infrastructure projects, mining and attempting to develop the so-called Polar Silk Road.

Climate Change - New geography and opportunities

The current trend of rising global temperatures is leading to increasingly receding ice coverage in the Arctic. Despite its devastating impacts on Arctic wildlife (e.g. polar bears) and on regions as distant as Bangladesh, Indonesia and the Maldives, ice melting in the Arctic is creating new opportunities, which regional players are certainly looking to exploit.

Firstly, increasingly ice-free during the summer period, the Arctic provides sea lanes for cargo ships which can increase connectedness and reduce transport times and costs. The North-West Passage connecting the Pacific with the Atlantic through the Canadian Archipelago can, for instance, reduce transit time between China and Europe by at least 10 days (Marshall, 2019).

Similarly, the melting of Arctic ice is increasing transit through the Northern Sea Route in Russian “High North”, thus potentially providing Russia a solution to its historical quest for seawater access, as well as an alternative supply chain for world trade. Annual cargo traffic in the NRS has increased from 5 to 34 million metric tons over the last ten years, with Russian ambitious plans to reach 240 million metric tons by 2035 (Marshall, 2019; Humpert, 2023). Nonetheless, current economic sanctions and efforts by Europe to diversify its energy provision may hinder these plans.

The Arctic Resource Race

As estimated by the US Geological Survey, the Arctic contains around a quarter of the world’s remaining undiscovered oil and gas reserves. Natural gas and natural gas liquids are thought to represent around 78% of Arctic resources (Arctic Portal, 2024). Moreover, the Arctic hosts vast deposits of critical mineral resources, including rare earths.

The United Nations Conventions of the Laws of the Sea gives right to exploit Arctic resources to five nations within their own exclusive economic zones: Norway, Denmark, Russia, USA and Canada. Nonetheless, the ever-growing value of critical mineral resources and energy deposits has sparked a race amongst the regional powers, leading to territorial disputes. For instance, tensions between Norway and Russia over the Svalbard Archipelago have been increasing in recent times. In addition, the discovery of substantial mineral deposits in Greenland has sparked a global race over access to this resource, primarily involving China, Europe and the US.

Amongst the most active players in the region, Russia owns the world’s only nuclear-powered icebreaker fleet. Not only do icebreakers enable Russia to boost its shipping routes, but they are also mainly used to facilitate drilling activities in the Arctic. Thus, Russia’s icebreakers monopoly is a considerable advantage over regional competitors in resource development.

Russia’s development of the Arctic LNG 2 project, a major offshore gas initiative, has gained geopolitical importance, as a result of Chinese involvement, following US opposition to the project. Importantly, an agreement between Putin and Xi Jinping has led to the acquisition of 10% of the project’ stakes by PetroChina (Zhang, 2024).

Ever since the start of the war in Ukraine, Western sanctions are increasingly pushing Russia towards cooperating with China. The latter is happy to invest in Russian infrastructure and energy projects, as it seeks to increase its influence in the region, and it aims to boost its Polar Silk Road ambitions by using the “Russian” Northern Sea Route without Western interference. Ultimately, the solidifying of a Russia-China Arctic partnership seems beneficial to both nations (Kumar & Haldar, 2024).

Russia's Military Posture

The Arctic is perceived by Russian authorities as a non-exceptional military threat. Russia’s priorities in the region involve maximising its security and defence interests, by maintaining control of the Russian Arctic and ensuring access for the Northern Fleet in the NSR (Devyatkin, 2018).

Despite its substantive force and capabilities, Russia’s military build-up in the Arctic Zone of the Russian Federation (AZRF) is defensive in nature. As a status quo Arctic power, it is in Russia’s interests to follow the rules and cooperate with other regional actors (Bolègue, 2024).

However, Russia’s war in Ukraine has heightened tensions in the Arctic. Finland and Sweden’s entry in NATO have created fear of encirclement and vulnerability in the AZRF, as a result of a potential “NATO 7 vs Russia” approach. The evolution of Russia-NATO relations will importantly shape security strategies and developments in the Arctic.

US Focus on Greenland

President Trump has expressed sustained geopolitical focus on Greenland, on the basis of “international security”. This can be viewed as a balancing effort, in light of increased Chinese and Russian regional presence and influence. Nonetheless, Greenland’s value to the US encompasses a wider range of interests, including key mineral resources, the control of trans-arctic shipping routes and the vast presence of oil and gas.