Commodities, Emerging Markets, Energy, Frontier Markets, Stocks

The Donut Hole At The Center Of The Arctic Ocean

The Arctic, long considered an almost worthless backwater, is primed to become one of the most important regions in the world as its ice melts over the next few decades.

Unlike every other maritime area in the world, there is no overarching legal treaty governing the Arctic. Instead, the Arctic Council, made up of Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the U.S., oversees and coordinates policy


The region is stocked with valuable oil, gas, mineral, and fishery reservesThe U.S. estimates that a significant proportion of the Earth’s untapped petroleum — including about 15% of the world’s remaining oil, up to 30% of its natural gas deposits, and about 20% of its liquefied natural gas — are stored in the Arctic seabed,” Business Insider reported.

The 1.1 million square miles of open water north of accepted national boundaries — dubbed the Arctic Ocean “donut hole”. The area is currently beyond the Arctic states’ jurisdictions and as the Arctic ice melts, it is predicted to become a center of strategic competition and economic activity.

In 2013, Iceland raised its status in Arctic policy debates by hosting the Arctic Circle international conference, during which special attention was given to Asia-Pacific actors: China, India, South Korea and Singapore. The success of the conference helped Reykjavik establish itself as a center for opinion exchange regarding essential questions about economic, social and ecological Arctic development. Moreover, Iceland increased its authority in the region by winning the right to hold the Arctic Circle conference up to 2017,” Emerging Equity cited The Diplomat last May.

The same year, China signed a free trade agreement with Iceland.

Literally today, June 24, Xinhua reported that China is willing to enhance practical cooperation with Iceland and promote bilateral relationship between the two countries to a new level, Guo Jinlong, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee has said during a two-day visit to Iceland.

The Chinese news agency also reported the following:

China attaches great importance to the relationship with Iceland and is willing to enhance cooperation in practical terms with Iceland,” Guo Jinlong said.

Iceland is willing to enhance cooperation with China in the fields including geothermal energy and Arctic affairs, Icelandic President Olafur Ragnar Grimsson said.

Iceland is willing to work together with China in deepening exchanges and cooperation in the fields including trade, tourism and new energy, he added according to Xinhua.

Last February, the first winter oil shipment from Russia over the roof of the world left for Europe. The 16,000 tonnes of Novy Port oil set off from Yamal on board tankers that was the first to navigate through the new Northern Sea Route across the Arctic, due to the regression of the polar ice cap.

Russia also positioned air defense missile and artillery weapon systems Pantsir (SA-22 Greyhound) and was planning to place MiG-31 (Foxhound) interceptor aircraft in the Arctic region, the deputy head of Russian Aerospace Defence Forces said earlier this year in April.

We know we could continue with more examples. However, we think the above ones are enough to give you a flavour of how hot the Arctic Ocean area is becoming to the biggest geopolitical players.

And finally after our brief geopolitical introduction, here is a great story about the Donut Hole at the center of the Arctic Ocean by Mia Bennett.

Mia is  pursuing a PhD in Geography at the University of California, Los Angeles (UCLA) under the supervision of Dr. Laurence Smith and Dr. John Agnew and with the support of a National Science Foundation Graduate Research Fellowship.


The Donut Hole (and two other small ones nearby) at the center of the Arctic Ocean. The Donut Hole (and two other small ones to the south) at the center of the Arctic Ocean.

On June 4, I wrote about issues surrounding the continental shelf in the Arctic Ocean. June 5 was National Donut Day. So that makes it a better time than ever to talk about the so-called donut hole in the Arctic Ocean. There also is some misinformation on the donut hole out there that requires clarification. The Pew Charitable Trust’s website, while otherwise very informative, says that the donut hole is a mere 2.8 square kilometers, while Business Insider notes that the donut hole consists of “open water.” In fact, the National Snow and Ice Data Center notes that the North Pole, which lies within the donut hole, likely hasn’t been ice-free in 125,000 years.

The donut hole actually consists of some 1.1 million square miles of typically ice-covered water. The area’s name derives from its…

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Chief ETF Strategist & Co-Founder at EMerging Equity


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