Iceland

📊 Overview

Iceland stands as the world's #116 largest exporter and #118 largest importer, demonstrating emerging market dynamics.

The trade profile reveals a deficit of 2.31 billion, reflecting import dependencies for growth.

The country maintains active trading relationships with 20 major partners, creating a highly diversified trade network.

Monthly trade flows average $1.41B, generating continuous economic activity across logistics, finance, and trade services.

🚢 Export Markets

Export concentration shows Netherlands as the dominant market at 30.7%. The top three markets control 48.5% of exports.

Regional patterns reveal European market focus. Secondary markets (Spain, Poland, Denmark) provide $1.19B in additional trade.

📦 Import Sources

Iceland relies heavily on Norway for imports (11.5%),maintaining balanced sourcing.

Energy suppliers including Norway (1.10B), Kuwait (233.82M) collectively provide 1.33 billion or 13.9% of imports, highlighting the economy's dependence on imported energy resources.

Manufacturing inputs come primarily from China, reflecting deep integration into Asian production networks. China's dominant position at 735.90 million encompasses electronics components, textiles, machinery parts, and consumer goods, creating both efficiency benefits and concentration risks.

The USA provides 604.99 million (6.3%) in imports, concentrated in agricultural products, aircraft, pharmaceuticals, and advanced technology.The top 10 import sources account for 64.8% of total imports, with the remaining 35% distributed among 10 other suppliers.

Regional sourcing patterns reveal diversified global sourcing. European suppliers including Germany (860.04M), Netherlands (798.13M), France (306.99M) focus on luxury goods, machinery, and specialized chemicals.

Supply chain resilience strategies increasingly emphasize "China Plus One" approaches, with emerging as alternative manufacturing bases. The geographic proximity of major suppliers balances efficiency with risk diversification.

📦 Product Composition

🚀 Export Products

Iceland's export economy centers on diversified industrial production, with the leading export being unwrought, (not alloyed)at $1.68 billion, accounting for 23.0% of total exports.

The automotive sector's dominance is evident in the export portfolio, with . This automotive specialization reflects decades of manufacturing excellence, continuous innovation in fuel efficiency and hybrid technology, and established global brand recognition.

The transition to electric and hybrid vehicles is captured in export data, with 0 categories specifically related to alternative propulsion systems, totaling $0.

Beyond automotive, Iceland maintains strong positions in specialized equipment,, and Aluminium, Fish fillets.

The top 20 export products collectively account for 71.4% of total exports, revealing moderate concentration with room for further diversification.

🛒 Import Products

Energy dominates Iceland's import profile, with fossil fuels accounting for 1.18 billion or 12.3% of total imports. Crude oil leads at 1.14 billion (11.9%), followed by natural gas and coal. This energy import dependency shapes economic policy, inflation dynamics, and strategic relationships with supplier nations.

Beyond energy, critical imports include other than artificial corundum (579.00M, 6.0%), with only electric motor for propulsion (399.12M, 4.2%), with or without metal, of a kind used fo... (287.89M, 3.0%), with or without metal, of a kind used fo... (250.50M, 2.6%), of an unladen weight exceeding 15,000kg (232.18M, 2.4%).Electronic components and devices total 641.18 million (6.7% of imports), supporting domestic manufacturing and assembly operations. Pharmaceutical products represent 167.36 million (1.7%), reflecting healthcare sector demands.

The import product mix reveals structural characteristics of Iceland's economy: integration into global electronics supply chains, and sophisticated consumption patterns.

The ratio of raw materials to finished goods in imports (7 : 13among top 20 products) indicates balanced import composition. Import substitution potential exists in agriculture and technology sectors through targeted industrial policies and investment.

Product diversification metrics reveal focused product specializationwith implications for economic resilience and growth potential. The technology ladder progression from 13 primary products to 2 high-tech goods indicates the economy's structural transformation and industrial upgrading trajectory.

Value addition opportunities exist in transitioning from raw material exports to processed goods, from components to finished products, and from standard to customized offerings. The product space connectivity, measuring relatedness between current exports and potential new products, suggests need for capability building to enter new product categories.

⚖️ Trade Balance Dynamics

Export-to-import ratio of 0.759 means exports cover 75.9% of import costs.

🔗 Key Relationships

The Iceland-Netherlands relationship leads at 3.04 billion in bilateral trade.View detailed analysis →

Additional major partnerships include Germany (1.42B total trade), USA (1.29B total trade), United Kingdom (1.04B total trade). Regional integration through transatlantic partnerships facilitates technology transfer, market access, and production efficiency. The diversity of trading relationships—11.60B across top 10 partners—provides resilience against bilateral tensions and regional disruptions.

🏆 Competitive Position

Global rankings position Iceland as the #116 exporter worldwide,in the developing trader category. The country's share of global exports at approximately 0.073%offers opportunities for market share expansion.

Export sophistication, measured by the dominance of technology-intensive products, indicates advanced industrial capabilities. The revealed comparative advantage (RCA) index shows strongest competitiveness in sectors where Iceland's global market share exceeds its overall trade share by factors of 2 or more.

Competitive advantages emerge in sectors where export concentration exceeds import share, particularly inunwrought, (not alloyed), unwrought, alloys, frozen, cod (Gadus morhua. The revealed comparative advantage is strongest in product categories representing36.4% of exports. Market positioning against regional competitors shows niche specialization opportunities.

Trade complementarity with major partners suggests regional production network participation. The export quality ladder, comparing unit values to world averages, indicates competitive pricing strategies.

Competitive dynamics are shaped by factor endowments including cost advantages and resource availability, infrastructure quality, and business environment. The export survival rate, measuring the persistence of export relationships over time, suggests need for relationship strengthening.

Innovation capacity, reflected in the technology content of exports and R&D intensity, determines long-term competitiveness trajectories. The competitive threat from emerging exporters in similar product categories requires continuous upgrading and differentiation strategies to maintain market position. Regional integration through trade agreements provides preferential access to0 markets, creating competitive advantages over non-member competitors.

🎯 Strategic Outlook

The trade profile presents both opportunities and challenges for economic development strategy. Key strengths include strong import capacity enabling technology transfer and consumption growth,diversified market access reducing concentration risk, and competitive positions in high-value manufacturing.

Vulnerabilities include excessive reliance on single export markets. The intersection of these factors creates a complex strategic landscape requiring careful navigation to maximize opportunities while mitigating risks.

Strategic priorities should focus on export promotion and import substitution to enhance trade competitiveness. Opportunities exist in expanding trade with Japan, Canada, Austria, developing new product capabilities in adjacent product categories, and strengthening regional integration through new partnership frameworks.

The digital transformation of trade, including e-commerce, digital services, and blockchain-based trade finance, offers new avenues for market access and efficiency gains. Green trade opportunities in renewable energy, sustainable products, and carbon markets represent growing segments aligned with global sustainability goals.

The evolving global trade environment, characterized by technological disruption, geopolitical realignment, and sustainability imperatives, will fundamentally reshape Iceland's trade prospects. Success requires balanced policies addressing both improving export capacity while ensuring sustainable import financing.

Investment in infrastructure, education, and innovation ecosystems will determine the ability to climb value chains and capture larger shares of global value addition. The resilience agenda, emphasizing supply chain robustness, strategic autonomy in critical sectors, and economic security considerations, must be balanced with efficiency and openness principles.

As global trade patterns continue evolving, Iceland's position as the world's #116 exporter provides a platform for continued growth, requiring adaptive strategies, institutional strengthening, and sustained commitment to competitiveness enhancement in an increasingly complex and interconnected global economy.