Greenland isn’t for sale, but it is increasingly valuable

US President Donald Trump’s interest in buying Greenland has highlighted the Arctic island’s growing strategic value as the polar ice melt opens up potentially major shipping routes. (AFP)
Updated 17 August 2019

Greenland isn’t for sale, but it is increasingly valuable

  • Oil, minerals and rare earth elements draw increasing commercial interest from superpowers

WASHINGTON: President Donald Trump’s reported wish to buy Greenland may have been rejected by Denmark, but it underscores the rising value of the massive, ice-covered island due to global warming and to China’s drive for an Arctic presence.

The accelerating polar ice melt has left sparsely populated Greenland, a self-governing part of Denmark, astride what are potentially major shipping routes and in the crosshairs of intensifying competition between superpowers.

It also has oil, minerals and valuable rare earth elements that China, the US and other major tech economies covet.

A Chinese government-backed group’s offer last year to build three new international airports on Greenland sparked alarms in Copenhagen and Washington.

The Chinese plan was finally dropped in exchange for Danish funding and a pledge of support from the Pentagon.

Trump’s idea to buy Greenland, reported by the Wall Street Journal on Friday, “is not a serious proposal,” said Heather Conley, a specialist at the Center for Strategic and International Studies in Washington. But “the administration has awoken to the Arctic as a geostrategic issue,” she said.

FASTFACT

In January 2018, Beijing unveiled its ‘Polar Silk Road’ strategy to extend its economic footprint through the Arctic.

Greenland has been essential to US defense since World War II when it was a base for monitoring Nazi ships and submarines passing through the “Arctic Avenue,” the sea gateway to the north Atlantic.

Conley said that after the Cold War ebbed in the 1990s, Washington stopped thinking about the Arctic.

Yet as the polar ice sheet began to shrink, the Russians became more active and China has moved to establish itself in the region.

US Secretary of State Mike Pompeo underscored the revived US interest in a speech in Finland in May when he slammed China and Russia for “aggressive behavior” in the Arctic.

“The region has become an arena of global power and competition” owing to vast reserves of oil, gas, minerals and fish stocks, he warned.

“Just because the Arctic is a place of wilderness does not mean it should become a place of lawlessness,” he said.

But Washington has not taken many concrete actions, Conley said. Pompeo only offered that the State Department would position a diplomat in Greenland’s capital Nuuk for six months of the year.

“The rhetoric and the reaction — there is a very big gap,” she said.

With no geographical claim to the region, but whose massive commercial shipping industry would benefit from new polar routes as the ice melts, China is the newcomer whose presence could shift the balance.

It began sending scientific missions in 2004. In the past several years, a Chinese company has gained mining rights for rare earths, partnering with an Australian company in the Kvanefjeld project.

In January 2018, Beijing unveiled its “Polar Silk Road” strategy to extend its economic footprint through the Arctic.

To gain favor in Nuuk, the Chinese have wined and dined government officials, said Coffey.

“China’s role in the Arctic has been more about expanding its economic influence, soft power,” said Coffey. “Ice melting is part of the interest, it is opening up new economic opportunities, but it’s also opening up challenges. The US is aware of that.” 

In a sign of Washington’s rekindled interest, US President Donald Trump will go to Denmark in September, and Vice President Mike Pence will visit Iceland.


Oil prices surge after attacks hit Saudi output

Updated 16 September 2019

Oil prices surge after attacks hit Saudi output

  • The Houthi attacks hit two Aramco sites and effectively shut down six percent of the global oil supply
  • President Donald Trump said Sunday the US was ‘locked and loaded’ to respond to the attacks

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi militia in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
“Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world’s biggest producer.
Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.
“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking ... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.