Executive Summary

Iceland, the only Arctic State that lies entirely within the Arctic, plays a key role in the shifting landscape of the region, which is rapidly becoming an area of increasing competition and strategic importance. As such, Reykjavik’s actions in 2026 will strongly influence the shaping of developments across the Arctic arena. 

In that regard, we assess that Iceland is highly likely to continue centering its increasing defence posture on enhancing military collaboration and deepening security cooperation with European allies in 2026. Furthermore, Iceland is likely to continue along an established path of expanding its allied-enabled ISR interoperability to strengthen domain awareness across the Greenland-Iceland-United Kingdom (GIUK) gap. Environmental protection will likely be a priority in Iceland’s Arctic policy this year amid the accelerating climate change that Iceland witnesses firsthand.