Russia sold Alaska for peanuts. Now it guards America against Moscow

Neither side could have foreseen how dramatically Alaska’s economic and military importance would grow.

Look at a map of the world and Alaska seems out of place. It belongs to the United States, yet sits apart from the rest of the country, separated by Canada and facing Russia across the narrow Bering Strait.How did this vast territory become a part of America?In 1867, the Russian Empire sold Alaska to the United States for $7.2 million in gold. Covering nearly 600,000 square miles, the territory cost the Americans less than two cents an acre. In hindsight, it looks like one of the greatest real-estate bargains in history.But the deal was more than a cheap purchase of land. For Russia, Alaska was a remote and expensive colony that had become increasingly difficult to defend. For the United States, it was an opportunity to expand its territory and influence in the North Pacific.

The Alaskan timeline.

Neither side could have foreseen how dramatically Alaska’s economic and military importance would grow. More than a century and a half later, the sale remains a striking example of how a decision shaped by the strategic calculations of one era can transform the balance of power in another.

A colony that never paid its way

Russia’s story in Alaska began with exploration. In 1741, expeditions led by Vitus Bering and Aleksei Chirikov reached the territory, paving the way for fur traders to venture across the North Pacific. Their principal prize was the sea otter, whose valuable pelts fuelled a lucrative trade.The business came at a heavy cost to Alaska’s Indigenous peoples. According to the US National Park Service, Russian traders, known as promyshlenniki, often coerced Aleut and Alutiiq people into hunting sea otters and supplying provisions.In 1799, Tsar Paul I consolidated Russian trading operations under the Russian-American Company, granting it a monopoly over trade in Russian North America and responsibility for administering the colony. Intensive hunting soon depleted sea-otter populations around the early settlements, forcing the company to seek resources elsewhere.The declining fur trade, however, was only part of the problem.Alaska lay thousands of miles from Russia’s political and industrial centres. Transporting food, supplies and people across such distances was expensive and difficult. The US National Archives notes that the Russian-American Company depended on substantial subsidies from an imperial treasury already under strain.Russia’s presence in the territory was also limited. According to the US Department of State, the permanent Russian settler population never exceeded 400, with imperial authority concentrated in coastal settlements and trading posts.Maintaining Alaska was costly. Defending it against a determined foreign power could prove costlier still.

The fear of losing it for nothing

The decisive argument for selling Alaska was strategic.

Three factors behind the 1867 decision.

The Crimean War of 1853–1856 exposed the limits of Russian military and naval power. Britain, one of Russia’s principal adversaries in the conflict, controlled neighbouring British North America, much of which would later become Canada.Russian officials feared that another war with Britain could leave Alaska vulnerable to seizure. If that happened, Russia might lose the colony without receiving a penny in compensation.The idea of selling the territory had been gaining support for years. In 1857, Grand Duke Konstantin Nikolayevich, the younger brother of Tsar Alexander II, argued that Russia should dispose of its North American possessions before the United States acquired them anyway. The Library of Congress identifies him as a leading advocate of the sale within the imperial court.Russia offered Alaska to the United States in 1859, according to the US State Department, but the American Civil War put negotiations on hold. Once the war ended, talks resumed, with Russia increasingly inclined to part with its distant colony.The empire also had other priorities. It was consolidating its position in mainland Asia, including the Amur region and the Pacific coast. These territories were more closely connected to Siberia and offered greater opportunities for settlement, economic development and military expansion.In December 1866, Alexander II and his senior officials decided to proceed with the sale. The transaction promised immediate revenue, relieved Russia of the expense of defending an exposed possession and reduced the danger of Alaska falling into British hands. Transferring it to the United States would also strengthen an emerging Pacific power whose interests could help counterbalance Britain.For Russia, the calculation was straightforward: better to sell Alaska than risk losing it in a future war.

A deal struck overnight

The negotiations brought together two key figures: US secretary of state William H. Seward and Eduard de Stoeckl, Russia’s minister in Washington. President Andrew Johnson supported the acquisition, while Alexander II authorised the transfer.According to the US National Archives, the negotiations advanced rapidly in March 1867. After an overnight session, Seward and Stoeckl signed the treaty at about 4am on March 30.The agreed price was $7.2 million in gold. Based on the commonly cited area of 586,412 square miles, or approximately 1.519 million square kilometres, that amounted to roughly 1.9 cents an acre.The US Senate approved the treaty on April 9. The United States ratified it on May 28, and the two countries exchanged ratifications on June 20. Alaska was formally transferred at Sitka on October 18, 1867.The transaction redrew the map of North America. Yet the people who had lived in Alaska for generations had no say in the decision. Indigenous communities were neither consulted nor represented in the negotiations.

From ‘Seward’s Folly‘ to an American prize

The purchase initially attracted scepticism in the United States. Critics mocked it as “Seward’s Folly” and “Seward’s Icebox”, questioning why Washington would spend millions on a distant, icy territory that appeared to offer little economic return.But the familiar story of a nation united in opposition to the deal may be overstated. In a 2019 article in Western Historical Quarterly, historian Michael A. Hill argued in “The Myth of Seward’s Folly” that the extent of public hostility to the purchase has been exaggerated.

Transfer of Alaska.

Subsequent discoveries gave Alaska a very different reputation.The Klondike gold rush began after gold was discovered in Canada’s Yukon in 1896. According to the National Park Service, more than 100,000 people headed towards the goldfields between 1897 and 1900. Many passed through the Alaskan ports of Skagway and Dyea, stimulating commerce, settlement and transport infrastructure. Although the original Klondike deposits lay across the Canadian border, major gold discoveries followed within Alaska, including at Nome and Fairbanks.Oil transformed the territory’s fortunes again. The discovery of the Prudhoe Bay oilfield in 1968, followed by the opening of the Trans-Alaska Pipeline in 1977, established Alaska as a major source of American crude.The US Energy Information Administration reports that the state’s oil production peaked at more than two million barrels a day in 1988. At the end of 2024, Alaska held approximately 3.1 billion barrels of proved crude-oil and lease-condensate reserves, according to the agency’s figures.The territory’s military value also became increasingly apparent. During the Second World War, Japanese forces occupied Attu and Kiska in the Aleutian Islands, bringing the conflict to American territory. Alaska also served as a transfer route for US aircraft delivered to Soviet crews under the Lend-Lease programme.During the Cold War, Alaska’s position along the shortest northern approaches between the Soviet Union and North America made it central to early-warning radar, air defence and military surveillance.The bargain had become much more than a bargain in land. Alaska was emerging as an economic asset and a strategic outpost on the edge of two competing powers.Still, judging the 1867 decision solely by what followed would be misleading. Russia could not have known the scale of Alaska’s future oil wealth or anticipated how developments in military technology would transform the Arctic. Nor does the territory’s subsequent value prove that selling it was irrational at the time.The sale made sense within the constraints Russia faced: a distant colony, mounting costs and the risk of losing it to a rival without compensation. The United States, meanwhile, acquired a territory whose economic and military significance would become clearer over the decades that followed.

Two rivals, 55 miles apart

The sale did not create the rivalry between Russia and the United States. But it placed American territory directly opposite Russia’s far eastern frontier, giving that rivalry a distinctive geography.At their closest points, mainland Alaska and mainland Russia are separated by roughly 55 miles, or 89 kilometres. The Russian-owned Big Diomede and American-owned Little Diomede islands lie much closer together, separated by approximately 2.5 miles, according to the National Park Service.That proximity makes Alaska central to US homeland defence and Arctic operations. The Pentagon’s 2024 Arctic Strategy describes the region as a northern approach to the United States and emphasises missile warning, surveillance, communications and military readiness. Alaska hosts missile-defence interceptors, radar installations, fighter aircraft and military bases supporting operations across the Arctic and North Pacific.The strategic tension is visible in the skies above the region. On July 24, 2024, the North American Aerospace Defense Command (NORAD) detected and intercepted two Russian Tu-95 bombers and two Chinese H-6 bombers flying together in the Alaskan Air Defence Identification Zone.NORAD said the aircraft remained in international airspace. Entering an air defence identification zone is not, by itself, a violation of national sovereignty, but such flights require monitoring because of their potential military significance.The Arctic’s economic importance is growing as well. According to the Protection of the Arctic Marine Environment working group of the Arctic Council, the number of unique vessels entering the Arctic Polar Code area rose 37 per cent between 2013 and 2023, from 1,298 to 1,782. The total distance sailed increased by 111 per cent to 12.9 million nautical miles.Changing sea-ice conditions and resource projects, including Russia’s Yamal gas development, have contributed to the increase. Moscow views the Northern Sea Route along its Arctic coastline as both an economic corridor and a strategic asset.Yet the growth in shipping should not be mistaken for an imminent transformation of global trade. Ice, inadequate port infrastructure, insurance costs and the difficulty of mounting emergency responses continue to constrain navigation through Arctic waters.Alaska’s importance extends beyond military deployments and shipping lanes. It has also become a venue for high-level diplomacy.Russian President Vladimir Putin and US President Donald Trump met at Joint Base Elmendorf–Richardson in Anchorage on August 15, 2025, to discuss the war in Ukraine and broader bilateral relations. The summit ended without a signed peace agreement.Putin has occasionally addressed the historical question of Alaska’s transfer with apparent nonchalance. During a televised question-and-answer session in 2014, when asked about the possibility of Russia reclaiming the territory, he responded: “Why do you need Alaska?” He also told the questioner not to get worked up about it.In January 2026, while discussing Trump’s interest in Greenland, Putin again referred to Alaska as a historical sale that had already been completed.

The bargain that changed sides

In 1867, Alaska was a remote possession that Russia struggled to maintain and feared it might lose. Today, it is a major American military platform facing the Russian Far East, a gateway to Arctic waters and a critical component of the defence of North America.The $7.2 million purchase looks extraordinary when measured against the territory’s subsequent mineral wealth, oil reserves and strategic importance. But its deeper significance lies in the contrast between what the two empires could see in 1867 and what the world would come to see in Alaska later.Russia sold a vulnerable colony to reduce its financial and military risks. The United States acquired a vast frontier whose value expanded with the discovery of natural resources, the rise of air power and the growing strategic importance of the Arctic.It was not necessarily Russian folly. It was a calculation made under the pressures of its time.The irony is that the very geography that once made Alaska difficult for Russia to defend now makes it indispensable to the United States. What Moscow saw as a costly outpost became Washington’s front line in the Arctic, and a reminder that the value of territory can change far more dramatically than the borders drawn around it.