Why Greenland is important to the US and Russia

Though an autonomous territory of Denmark, its strategic location and natural resources have made it central to geopolitical manoeuvring. As Arctic ice melts, opening new shipping routes and resource opportunities, the island’s importance continues to grow in military, economic, and diplomatic spheres.

President Donald Trump told Congress that Greenland was destined to become a US territory and that his administration was working hard to "get it - one way or another".

The US has repeatedly tried to buy Greenland, including offers in 1867, 1946, and most recently in 2019 under the first Trump administration. Each proposal was rejected.

Military significance

Greenland’s location places it at the heart of US and Russian security concerns. If Russia were to launch missiles toward the US, the shortest route would be the North Pole and Greenland.

The US has maintained a foothold in Greenland since World War II, with the Pituffik Space Base (formerly Thule Air Base) serving as a key missile defence station. It plays a vital role in NATO’s defence strategy. Meanwhile, Russia has expanded its Arctic military presence, deploying nuclear-capable bombers and enhancing surveillance. The Kremlin sees the Arctic as essential for power projection and resource extraction.

Greenland also plays a crucial role in the GIUK Gap, the naval chokepoint between Greenland, Iceland, and the UK. This area is critical for monitoring Russian submarine activity, and so the US has placed radars in the waters of these countries. These waters are a gateway for Russian and Chinese vessels, which Washington aims to track.

Russia, recognising Greenland’s strategic location, has expanded its military presence in the Arctic, reopening Soviet-era bases, modernising airfields, and increasing submarine patrols. Russian forces regularly conduct military exercises in the region, emphasising their control over Arctic waters.

Economic and resource competition

Greenland holds vast untapped economic potential. Its resources are becoming increasingly accessible due to climate change, drawing attention from global powers. The island is rich in rare earth minerals, uranium and iron, which are essential for batteries, renewable energy, and military technology.

According to a 2023 survey, 25 of 34 critical raw materials were found in Greenland. Western nations seek to reduce their dependence on China, which dominates the REE supply chain.

In 2021, Greenland banned uranium mining, halting a Chinese-backed rare earth project. As of 2023, only two active mines exist, with others in development but facing high costs and environmental concerns.

A 2007 US Geological Survey report suggested that Greenland’s offshore areas might contain significant oil and gas reserves. However, Greenland halted new oil and gas exploration licenses in 2021 due to environmental and economic concerns. Greenland’s ice sheet holds 20% of the world’s freshwater, a potential future resource, while its fisheries sector remains the backbone of its economy. Climate change has shifted fish populations northward, increasing Greenland’s significance in global seafood markets.

The Northern Sea Route and Arctic trade rivalry

Russia's primary goal is to develop the Northern Sea Route through the Arctic, significantly reducing the shipping time for Chinese goods to reach Europe compared to the Suez Canal. Initially, Russia had planned to collaborate with Western countries for Arctic resource extraction, but following its 2022 invasion of Ukraine, European shipping companies severed ties with Russian operators, and Western energy firms abandoned their projects in the region.

The development of the Northern Sea Route will strengthen ties between Russia and China. Both nations have signed an agreement to design and build new ice-class container ships. Rather than just serving as a global shipping shortcut, the route will primarily be used for extracting and transporting energy and mineral resources.