Water is a finite resource — and increasingly a national security issue, analysts told CNBC.
Water demand is expected to outpace supply by as much as 40% in 2030, according to a 2023 landmark report on the economics of water. At the same time, climate change is affecting weather patterns and once water-abundant areas are running dry. As a result, more water needs to be moved around to ensure access.
Freshwater is used in everything from manufacturing to agriculture, and demand is set to increase as the population grows and thirsty AI data centers are built.
As water is increasingly seen as a strategic asset, market watchers are looking to Greenland’s freshwater reserves as a potential resource. The Danish territory has itself recognized the strategic potential and has long looked to capitalize on the asset.
“The potential for water is manifold, since clean, fresh water can be used as drinking water and water for food production, for example, but also as bulk water for factories, farms or a contribution to bulk water supply,” according to a statement from the government of Greenland on its website. “There are many possibilities.” CNBC reached out to Greenland officials for further comment.
The changing flow of water
Only about 3% of the world’s water is freshwater, providing the basis for suitable drinking water, and an even smaller amount of that can be readily accessed.
“Historically we have just continued to drill down water tables deeper and deeper, but now we’re at the point where the aquifers cannot replenish themselves. It takes a long time for the surface water to percolate down,” said Noah Ramos, an analyst who covers innovation at Alpine Macro with expertise in water technology. He added that simply drilling deeper can no longer be “relied on.”
Resource nationalism has become a “defining” geopolitical play, he said — and that includes water. “So water has inherently become a strategic asset.”
“In my view, right now, the nations that don’t have it as a strategic asset are better positioned in the long run” because it forces them to innovate, Ramos added. He pointed to the Middle East and its investment in technologies like desalination, which converts seawater into drinking water, and Israel, which recycles most of its water.
The United States, South America, and Canada have historically had abundant water but are facing new levels of water stress, putting them in a sticky position, Ramos said.
To be sure, half of the world’s population experiences water scarcity for at least one month a year, throwing public health and food security into question. Notably, China is bolstering its water infrastructure. Investment hit around $182 billion alone in 2025 as part of the country’s National Water Network strategy, per a government release. The eastern power has uneven distribution of water, as does the U.S. The U.S. has its own water strategy, while the European Commission has instigated a “water resilience” plan.
Attempts to tap ‘frozen capital’
The majority of the world’s freshwater is locked up in glaciers and ice caps, primarily in Antarctica and Greenland; each year up to 300 billion tons of water melt from the Greenlandic ice sheet, per the territory’s government.
“Greenland’s freshwater reserves, a massive 10% of all reserves found on Earth, can mostly be understood as frozen capital, not a readily available supply,” Nick Kraft, senior analyst working on water, agriculture and responsible investing at Eurasia Group, told CNBC.
“Greenland’s water is a strategic asset and a niche business opportunity, but it’s not a practical near-term fix for global water stress or demand,” he said.
Still, some are hoping to capitalize on the meltwater as climate change accelerates. Notably, Arctic Water Bank, a startup, planned to build a dam to capture meltwater and export it internationally. It is unclear what happened to the company, but no dam has been built. A different company, Inland Ice, bottles it as premium high-purity drinking water, to Kraft’s point. Five businesses currently have active 20-year licenses, including Greenland Water Bank, which is reportedly associated with Ronald Lauder, the billionaire Estée Lauder heir.
“Authorities have entertained proposals as ambitious as building a dam for water export,” Kraft said. “But the real-world track record is telling: what’s actually happened so far has been small, premium boutique exports, while many bigger export-at-scale ideas have been announced and then stalled.”
Exporting water isn’t easy due to its weight, Erik Swyngedouw, a University of Manchester professor who covers the intersection of resources and governance, told CNBC.
“The cost is gigantic,” he said. “There have been attempts to bulk water transport [overseas]; none of them have been viable in any kind of way.”
Pipes containing drinking water are shown at the Poseidon Water desalination plant in Carlsbad, California, U.S., June 22, 2021. Picture taken June 22, 2021.
Mike Blake | Reuters
It is common to move water by land, be it via canal systems or huge infrastructure networks. However, it has been shipped in emergency situations, notably to Barcelona in 2008 and 2024 during severe drought.
“It’s actually extremely difficult to make money from water — very, very difficult. Despite 20 years of attempts to privatize water, it has not been a great success,” Swyngedouw said.
While some geopolitical tensions have involved water disputes — China’s plans for the world’s largest dam sparked concerns from India and Bangladesh, for instance — Swyngedouw said it is more likely that intra-state frictions would arise due to the inequitable distribution of water.
“I’m sure that part of the uprising that is going on in Iran has to do with the gigantic drought that has been going on in Iran for a while now, and makes life in Iran extremely difficult,” he added.
The country is experiencing its sixth year of drought, with some cities facing regular interruptions to water access.
When asked if it is in a government’s interest to secure water resources to prevent civil unrest, Swyngedouw said that “not all the states are the same.”
“So the Iranian state has systematically neglected the provision of these basic infrastructures, with the consequences that we know, and it has done that for geopolitical reasons. It is putting all its money in the military, that’s basically the choice they had,” he added.
Swyngedouw called for greater emphasis by governments on provisioning water as a public service.
Kraft added: “Water is increasingly treated like a strategic asset — closer to critical infrastructure than a commodity — as climate volatility and demand growth turn water insecurity into a national security issue. This will likely bring more headlines on its water export potential, but I don’t suspect anything material [will] change through the end of the decade.”
“Even if Greenland’s freshwater won’t be exported at scale anytime soon, it still matters geopolitically.”
