Greenland almost certainly has oil, but no one has successfully produced a single commercial barrel of it. The U.S. Geological Survey estimates roughly 31.4 billion barrels of oil equivalent in undiscovered conventional petroleum resources off Greenland’s east coast alone. That’s a significant figure on paper, comparable to the proven reserves of smaller OPEC nations. In practice, though, extracting it has proven so difficult and expensive that the Greenlandic government suspended all new oil exploration in 2021.
How Much Oil Is Believed to Be There
The USGS assessed Greenland’s East Greenland Rift Basins Province and estimated approximately 31,400 million barrels of oil equivalent in undiscovered oil, natural gas, and natural gas liquids. This is a geology-based estimate, meaning scientists looked at rock formations and compared them to similar basins elsewhere in the world where oil has been found. The key word is “undiscovered.” No one has confirmed these reserves with successful drilling. They remain a geological probability, not a proven asset.
Over roughly five decades of trying, exploration companies drilled 39 holes across 10 projects in Greenland’s waters. None resulted in a commercially viable discovery. That 50-year track record of dry or uneconomic wells is one of the main reasons optimism around Greenlandic oil has faded.
Why Extraction Is So Expensive
Even if a major discovery were confirmed tomorrow, getting oil out of Greenland’s waters would be extraordinarily costly. The challenges are not just difficult; they compound each other in ways that make Arctic extraction fundamentally different from drilling in the Gulf of Mexico or the North Sea.
Temperatures can drop to minus 40 degrees Fahrenheit, cold enough to thicken hydraulic fluid and cripple heavy equipment. In northern Greenland, the sun doesn’t rise for 100 days during polar winter, shrinking the operational window. High winds regularly ground helicopters, close airports, and knock out communications. Pack ice blocks shipping lanes, making it unreliable to move fuel, equipment, and personnel. Greenland has only 16 small ports, a tiny labor force, and limited, inconsistent electricity generation.
Experts estimate that resource extraction in Greenland costs five to ten times what it would in more temperate locations. That multiplier applies to everything: labor, logistics, construction, and maintenance. For oil production, where profitability depends on keeping per-barrel costs below market price, that math has never worked out.
The 2021 Exploration Ban
On June 24, 2021, Greenland’s government officially suspended new oil and gas exploration licenses. Naaja Nathanielsen, then Greenland’s minister of natural resources, stated that “the environmental consequences of oil exploration and extraction are too great.” She framed the decision as one where “climate considerations, environmental considerations, and economic common sense go hand in hand.”
The environmental reasoning was straightforward: Greenland is experiencing some of the fastest ice loss on Earth, and its government didn’t want to contribute to the fossil fuel economy accelerating that loss. But the economic analysis was equally important. Government assessments concluded that any oil development would either deliver low profits or lose money outright. After 50 years of exploration with nothing to show for it commercially, walking away wasn’t just an environmental statement. It was a practical one.
Are Any Oil Projects Still Active?
Despite the moratorium on new licenses, at least one set of existing licenses has remained in play. An Australian-listed company called 80 Mile Gold holds three licenses covering roughly two million acres (8,429 square kilometers) in eastern Greenland, described as one of the world’s largest remaining untapped gas and liquids-rich basins. As of mid-2025, its joint venture partner had reportedly signed agreements with oilfield service providers and begun moving heavy equipment to East Greenland in preparation for drilling in the second half of 2026, pending regulatory approval.
Whether that drilling actually happens remains uncertain. Regulatory approval from the Greenlandic government is not guaranteed, and the political climate has shifted significantly toward environmental protection and mineral-based economic development rather than petroleum.
Greenland’s Shift Toward Minerals
With oil off the table for now, Greenland’s economic hopes have pivoted to critical minerals. The island ranks eighth in the world for rare earth reserves, holding an estimated 1.5 million tons. Two deposits stand out globally: Kvanefjeld and Tanbreez. Tanbreez alone may contain 28.2 million metric tons of rare earth elements, potentially making it the world’s largest deposit. These minerals are essential for electronics, electric vehicle batteries, wind turbines, and defense systems.
The path forward hasn’t been simple. In 2021, the same year the oil ban took effect, Greenland’s parliament passed legislation blocking mining of deposits with uranium concentrations above 100 parts per million. That effectively killed development of the Kvanefjeld mine, which has uranium concentrations around 300 parts per million. Tanbreez is further behind in development, completing only a preliminary economic assessment in 2025.
Graphite has emerged as one of the more concrete opportunities. In December 2025, Greenland granted a 30-year exploitation license for the Amitsoq graphite deposit, which the European Union had already designated a Strategic Project under its Critical Raw Materials Act. The project aims to produce about 80,000 tons of graphite concentrate annually, yielding high-quality flake graphite suitable for lithium-ion battery anodes. But even mineral projects face the same brutal logistics: the same extreme cold, the same limited ports, the same costs that are five to ten times higher than operations in friendlier climates. An Australian company recently abandoned a two-decade plan to develop a zinc mine in Greenland, citing high costs for energy, transportation, labor, and political uncertainty.
Greenland’s resources are real. Its oil is geologically plausible, its rare earths are globally significant, and its graphite is attracting European strategic investment. The question has never been whether valuable materials exist beneath its ice and seabed. The question is whether anyone can get them out at a price that makes sense.