Talk of drilling for oil northeast of Iceland has resurfaced, as politicians, experts, and investors clash over the future of the so-called Dreki Area. Some argue it could bring vast economic benefits, while others insist it contradicts Iceland’s environmental commitments and energy transition goals. RÚV reports that the matter was even discussed in Parliament last week.
The Dreki Area lies in the Arctic Ocean along the Jan Mayen Ridge, straddling the maritime boundary of Iceland and Norway. Unlike most of Iceland’s young oceanic crust, this region includes continental crust — the kind of geology that increases the likelihood of oil deposits. Studies around the year 2000 suggested there might be potential, though no commercial discovery has ever been made.
Licenses for exploration were issued in 2013 to Chinese, Norwegian, and Icelandic companies. By 2018, both foreign partners had withdrawn, citing poor prospects, and Iceland’s National Energy Authority later revoked the remaining license.
Economist and investor Heiðar Guðjónsson has argued that oil production in the Dreki Area could yield “tens of thousands of billions of ISK” for Iceland — enough, he has suggested, to abolish taxes entirely. Others, including municipal leaders in East Iceland, believe further exploration could benefit the entire country.
In the northeast, broader development ideas are also on the table. Plans for a potential transshipment port in Melrakkaslétta, combined with speculation about oil in the Dreki Area, could carry significant economic implications for Norðurþing and surrounding communities.
Still, Environment and Energy Minister Jóhann Páll Jóhannsson has cautioned against inflated expectations. “I will not take part in creating exaggerated hopes of billions in oil profits,” he said in Parliament, emphasizing that the government’s priority remains on renewable energy and the green transition.
Photo by RD
