Global | Strategic competition in the Arctic intensifying

The US is likely to try to secure its commercial and military interests in the Arctic in 2025 through assertive diplomacy and economic coercion

• The Trump administration has signaled its intention to take control of Greenland, proposing a peaceful acquisition while keeping military options on the table
• Trump’s expansionist policies are likely to further strain transatlantic relations and encourage assertive Russian actions elsewhere in the Far North

Geostrategic competition in the Arctic is heating up. This is driven by rivalries between the US, Russia and China over critical resources, military positioning and shipping routes. The US government has adopted an assertive stance towards Greenland since Donald Trump returned to the White House in January. His stated goal of taking control of the island, along with talks to strengthen economic ties with Moscow in the region, signals that the Arctic will be a key strategic priority for Trump’s second term.

President Putin is seemingly hindering Trump’s efforts to reach a swift peace agreement in Ukraine. So it is far from certain whether the US and Russia will reach an agreement to cooperate in the Arctic. Regardless, the US push for Greenland is likely to shift the balance of power in the Arctic over the coming years. A US-Russia pact that ensures Washington’s dominance there would potentially embolden Moscow to enforce territorial claims like those over Norway’s Svalbard archipelago. It would also obstruct China’s ambitions to secure access to Arctic resources.

Greenland vital for US defence and security

Trump has revived the idea of purchasing Greenland, a proposal he initially raised during his first term. But his recent rhetoric and actions have become more confrontational. On 29 March, he suggested that acquisition could occur ‘without military force’ but left the option open, stating, ‘I don’t take anything off the table’. This followed a controversial, uninvited visit by US Vice President JD Vance to the Pituffik Space Base in northwestern Greenland in late March.

The US has long viewed Greenland as vital to its national security. This is driven by four main factors:

• Military balancing. Greenland’s location between Russia and North America is critical for US defence. The Pituffik Space Base is crucial for missile warning and space surveillance. The island straddles the Greenland-Iceland-United Kingdom (GIUK) gap, a key maritime chokepoint for monitoring adversary naval movements.
• Resource dominance. The island is rich in critical minerals, including 39 of the 50 materials vital to US national security, according to a Washington-based think tank. It also has substantial untapped oil and gas reserves. The US Geological Survey estimates that there are over 17.5 billion undiscovered barrels of oil and 148 trillion cubic feet of natural gas off Greenland’s coast.
• Countering Russia. Maintaining a US military foothold in Greenland helps prevent Russia from expanding its influence in the Arctic. Moscow controls about half of the region’s coastline and views it as essential to its economic and national security. According to the 2025 US Intelligence Community’s annual threat assessment, Russia aims to further develop its Arctic oil and gas reserves, while capitalising on maritime trade through the region.
• Containing China. China has similar aims, despite not controlling territory in the Arctic. Beijing is strengthening cooperation with Russia, seemingly in part to help grow its presence in the region and legitimise its influence there. According to the US intelligence community, China is producing icebreaker ships for Russia, which enable safe passage through Arctic waters.

Resource exploration in Greenland has been limited by harsh conditions and political concerns about environmental impacts. But melting ice and new shipping routes are making extraction more viable. On 21 March, the US National Snow and Ice Data Center reported that winter sea ice cover in the Arctic reached its lowest-ever annual peak this year. This opens maritime routes such as the Northern Sea Route (NSR), which shortens travel time between Shanghai and Rotterdam by two weeks.

These changes will very probably sustain Greenland’s geostrategic significance for the US. Washington is working to secure access to critical minerals it sees as vital for its defence industry and energy security, and reducing reliance on China in these areas is a key goal for the Trump administration. As conditions for exploration improve, Greenland’s geostrategic importance will very probably grow further.

Trump likely to pursue an assertive Greenland policy

Given these developments and interests, the US is likely to become more active in asserting its military and economic influence in Greenland in the coming months. While Trump has not ruled out military action, we assess it is highly unlikely. Greenland is part of the Kingdom of Denmark, a NATO territory. An invasion would severely damage ties with NATO allies – something Trump, despite his antipathy towards many European leaders, would probably avoid.

Instead, Trump is likely to try to expand the US military presence in Greenland and push for commercial deals. This would most likely include uncoordinated high-level diplomatic visits – similar to Vance’s visit in March – as well as publicly accusing Denmark of neglecting Greenland’s security, or military exercises on or near the island without coordination with allies.

To align Greenland’s policies with US interests, Washington is also likely to exploit the political gap between Denmark and Greenland. Denmark prefers to keep Greenland as an autonomous territory, while most political parties in Greenland are seeking greater self-determination. The US will probably seek to influence the Greenlandic population towards independence, leaving it more open to a free association deal like it has with some Pacific islands.

Given Trump’s track record, it seems probable that he will use economic coercion to pressure Denmark into making concessions on Greenland’s security or sovereignty. This is likely to include threatening to impose tariffs on Danish exports or leveraging trade relations. Such actions would clearly lead to diplomatic tensions with Denmark and other EU countries with major trade interests with it. But Trump’s recent actions suggest that this would not concern him.

Russia will probably be emboldened to assert influence

The US’s expansionist rhetoric on Greenland is likely to encourage other major powers to adopt a similar stance toward other Arctic territories. This includes emboldening Russia to expand its hybrid warfare tactics there, to test the resolve and resilience of NATO members and the command of their jurisdictions. There has been no conclusive evidence to explain the cause of damage to a fiber optic cable linking Svalbard and mainland Norway in January 2022. But an Oslo-based think tank and Norwegian media outlets have suggested that Russia was responsible; Russian trawlers were known to be sailing near the damaged cable at the time of the break.

Although improbable, the US’s confrontational stance towards Denmark would plausibly embolden Moscow into taking direct actions. One outlier scenario is Russia attempting to assert control over Arctic territories like Norway’s Svalbard archipelago. Moscow has already accused Norway of militarising Svalbard, which is prohibited under the Svalbard Treaty that establishes Norway’s sovereignty over the archipelago. It is plausible, albeit currently unlikely, that Putin would use this as a pretext to escalate Russia’s military presence in the region.

Svalbard presents a lower-risk, lower-cost target for Russia than the Baltic States. According to a leading expert on Arctic geopolitics we spoke with last week, its remoteness makes it less likely that NATO would invoke Article 5 to defend the territory. This is despite its strategic significance as a critical site for satellite data links. Trump’s apparent antipathy toward Europe suggests he would be unlikely to strongly oppose a Russian attempt to annex the territory, probably considering it a European security matter.

US-Russia Cooperation in the Arctic now appears less likely

A US-Russia economic cooperation deal in the Arctic now seems less likely than it did a few weeks ago. Media reports in late February suggested such a deal was under consideration during Russia-US talks in Saudi Arabia on ending the Russia-Ukraine war. But there are growing signs that rapprochement between the two sides has stalled, slowing efforts to reset relations and, consequently, cooperation in the Arctic.

Yet such cooperation is still plausible. The US still appears to want to improve its relations with Moscow to weaken the latter’s relations with China. Such cooperation would probably take the form of commercial deals related to resource extraction and the use of trade routes. The US may also seek access to Russian port infrastructure, such as Kaliningrad, based on its strategic location.

Deeper US-Russia cooperation in the Arctic would probably hinder China’s ambitions to exploit Arctic resources and shipping lanes, given its reliance on Russia for access. While it is unclear how China would adjust its Arctic policy, it is likely that Beijing would aim to maintain its influence. One potential strategy would be to grow its economic investments and partnerships with smaller Arctic nations, such as Iceland.

NATO’s Arctic coordination is likely to be limited

In response to this growing geostrategic competition, NATO and its Arctic member states are likely to take steps to enhance their presence in the region. This will probably involve more military exercises, increased surveillance and efforts to strengthen their infrastructure in the Arctic. However, these actions will also heighten the potential for miscalculations or accidental confrontations in the region.

A heightened NATO military presence in the Arctic would probably slow down the alliance’s ability to coordinate on other key global issues. This includes climate change, for which the Arctic is a key arena. Any push to increase its operational activity in the Far North is also likely to strain resources and create more divisions within the alliance over how to manage the region’s growing tensions.

Implications for businesses

Key issues to monitor over the next few months include potential US-Russia agreements on resource extraction, military provocations, and challenges to Arctic governance. Among the global knock-on implications for anyone considering geopolitical and security risks for their organisations are:

• Uncertainty around new trade routes, with the potential for disruptions in logistics and supply chains due to shifting geopolitical dynamics
• Government incentives to invest in the region, particularly in the extractives, energy, logistics and defence sectors
• Physical and cybersecurity risks as critical Arctic infrastructure potentially becomes more vulnerable to cyberattacks and acts of sabotage
• New geographies to monitor for signs of escalating US-Russia-China competition, including military posturing, resource extraction deals and shifts in governance