The Faroese strategy in a stormy geopolitical sea

The Faroe Islands represent a unique case in which a small geopolitical actor can pursue its goals with pragmatism and determination despite their size and limited resources. Located between Iceland, Norway and the United Kingdom, The Faroe Islands are a unique and compelling case of a small territory with limited resources that is nevertheless able to pursue its goals with pragmatism and determination. The Faroese economy is mostly dominated by the fishery sector, which is also the most relevant element influencing the islands’ autonomous foreign policy and international activity. This article will analyse the peculiar way in which the Faroese have developed their own foreign policy and signed advantageous partnerships.

A semi-independent actor with international orientation

Since 1948, The Faroe Islands have been a self-governing territory within the Kingdom of Denmark. Under the Takeover Act of 2005, areas such as military defense, justice, police and currency are guaranteed by Copenhagen, while the local government assumes responsibility in all other areas. The Faroe Islands are entitled to two seats in the Danish Parliament for their political representation within the Kingdom, while also having their home Parliament, the Løgting.

However, the Faroe Islands have developed an active and strategic foreign policy whose main goal is the preservation of Faroese interests in a changing global scenario. While Danish embassies abroad also represent the interests of Faroese citizens, Torshavn has opened several diplomatic missions in relevant countries, conducting an autonomous external engagement. This constitutes a hybrid system where powers and responsibilities are shared between the local Faroese government and the central government in Copenhagen. The Faroe Islands are not an EU member, and trade with European countries is regulated by a series of agreements concluded in cooperation with the Danish Ministry of Foreign Affairs.

The Faroe Islands rank among the countries with the highest GDP per capita in the world. This wealth is primarily due to marine resources and the fishing industry. Fisheries account for 90–95% of total Faroese exports and approximately 20% of national GDP. The Faroe Islands have access to an exclusive fishing zone of approximately 200 nautical miles, as well as additional areas under international jurisdiction. Maritime transport and logistics represent equally important sectors for the economy of the Faroe Islands. Given their strategic geographic position in the North Atlantic and the Giuk Gap, the Faroe Islands could be an excellent hub for the international maritime industry and sea routes. Over the past 20 years, the maritime services provided by Faroese port authorities have significantly expanded and have reached considerable levels of internationalization. This is particularly relevant as it enables the Faroese to become not only more integrated with larger trade powers but also to attract considerable foreign investment.

Faroese partnerships

Naturally, the Islands’ foreign policy and partnerships are designed to preserve the economy’s key sector and to guarantee an autonomous development. However, the modus operandi in which the Faroese pursue their interests is what makes them a peculiar geopolitical actor. Despite being part of the Danish Realm, the Faroese maintain independent dialogues and partnerships with several nations. The Faroese balance relations with the EU, USA, China and most notoriously Russia, with zeal and pragmatism. For each partnership, the Faroese use limited tools with flexibility and a goal-oriented mindset.

While Denmark joined the European Union in 1973, the Faroe Islands opted to remain outside, in order to safeguard their fisheries. EU-membership would have meant accepting the Common Fisheries Policy (CFP) which was seen as risky. Moreover, the possibility to independently sign partnerships and to tailor trade policies played a key role in the Faroese decision. Finally, considering their limited population, the Faroe Islands would have had minimal influence on EU decisions. In 2024, a Memorandum of Understanding was signed by the EU Commission and the Faroese Government to increase the bilateral cooperation and focus on strategic interests such as the green transition and especially the Arctic.

Previously, the most significant episode in Faroe-EU relations is the “Mackerel War” dispute from 2013. This controversy arose when the EU imposed sanctions on the Faroe Islands, restricting their access to EU ports and banning fish imports following the accusations of unsustainable fishing. The dispute was resolved a year later, following an agreement on lower quotas. What was striking was not only the Faroese decision to address the issue at the WTO, but also the faroese decision to increasingly turn towards Russia as a trade partner. This decision illustrates the determination of the Faroese to maintain their trade goals despite geopolitical challenges, in this case the deterioration of Russia-EU relations following the annexation of Crimea, and their willingness to trade with any convenient partner. The Faroese-Russian trade treaty was then extended in 2026 despite the continuous hostility between Russia and the EU.

The Faroe Islands’ relations with Russia dates back to 1977 when the first fishing treaty was signed. When the EU imposed sanctions during the Mackerel War, the Faroese found an export destination in Russia and opened a diplomatic representation in Moscow. Since the invasion of Ukraine, Russian fishing vessels have sailed Faroese waters and vice versa. Naturally, the Danish Realm, including Torshavn, has imposed sanctions on Russia alike other western allies, but the fishery sector was particularly preserved. This duality shows how the Faroese choose to position themselves as a western actor while maintaining a link with Russia in order not to damage the fishery sector.

Turning Eastward, he Sino-Faroese relations include trade, infrastructure security and telecommunications. During the Mackerel War with the EU, China, just like Russia, became an ideal alternative destination. In 2019, the Faroese opened a representation in Beijing as a consequence of increased exports to China. At the same time, China has shown considerable interest in the North Atlantic region and Huawei was considered for building a Faroese 5G network in 2019. Despite Chinese pressures, the Faroese chose a different provider. The project, as other Chinese projects in the region, was the object of controversy due to Danish and especially American concern. A similar situation can be seen with Greenland where Chinese investments in the North Atlantic and Arctic region were perceived as a threat by Washington.

Furthermore, the relevance of the North Atlantic for the USA has led to many military exercises in the Giuk Gap. A partnership declaration with the Faroese government was signed in 2020, which followed the opening of a Faroese representation in Washington. This close relationship with NATO’s major power enables the Faroese to maintain a strategic dialogue which allows them to spot threats and opportunities from their local perspective, which might differ from other viewpoints. Once more, it is evident how the Faroese prioritize the focus of their partnerships and engage with different geopolitical actors that are often hostile to each other. Naturally, the limited size of the Faroe Islanfs is the one factor that allows them to exercise such diplomatic ambiguity which wouldn’t easily be accepted with a bigger state.

However, the situation in Greenland is particularly worrying for the Faroe Islands. On the one hand, the very structure of the Danish Realm is under threat by one of its major allies, while, on the other, the interest of powers such as China and Russia for the world’s largest island might turn the North Atlantic into a conflict-torn sea and damage Faroese interests. In case of military conflict, the Faroe Islands might be used as a base for one power to strike another, as was the case during the Second World War when the islands were occupied by the British, thus endangering its citizens. Furthermore, any potential damage to port infrastructure might have long-standing consequences for the Faroese economy.

Conclusion
The Faroe Islands have maintained a smart and flexible approach in their foreign policy and trade. While other small territories rely on tools such as energy sources, banks or special economic zones, the Faroese are able to thrive by focusing on their traditional activity and a pragmatic and strategic mindset. Unlike Greenland, they are more likely to go through a peaceful stage while the surrounding powers (the USA, the endangered NATO alliance, the EU, China and Russia) fight to impose their dominance or maintain their integrity and independence. While the North Atlantic becomes a stormy geopolitical sea, the Faroese might be able to maintain a focused and agile approach in pursuing their goals while maintaining valuable partnerships with bigger powers.

However, in a historical moment in which powers are becoming increasingly more hostile to each other, it could become difficult to choose partnerships with specific actors without encountering backlash from others. For instance, the Faroese prolonged partnership with Russia might damage the Islands’ relations with the EU or with Copenhagen. The Faroese must play simultaneously on different tables to maintain a stable economic growth in an uncertain geopolitical context.

Questions for Further Reflection:
1. Will the Faroe Islands be able to sail smoothly in the current geopolitical situation?

2. How will the Faroe Islands adapt themselves to the future and how will they change their foreign policy?

3. How will other major geopolitical actors in the North Atlantic view the Faroe Islands in case of a security crisis?

Readings:

1. Christensen, Nicolai Risager, and Yordanova, Ianna Georgieva. “Faroese economy grows despite high global uncertainty”. Danmarks Nationalbank. 21 January 2026.
2. Rasmussen, Rasmus Leander, and Rahbek-Clemmensen, Jon. “Spotlighting the Kingdom: Greenland, Denmark and the Arctic turns of the EU and NATO”. Danish Institute for International Studies. 2023.
3. Bailes, Alyson J.K., and Jákupsstovu, Beinta í. “The Faroe Islands and the Arctic: Genesis of a Strategy”. European Parliament. 20 November 2013.