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Third Cod War
Part of the Cod Wars
Icelandic patrol ship ICGV Óðinn and British frigate HMS Scylla clash in the North Atlantic.
Date 16 November 1975 – 1 June 1976 Location Waters surrounding Iceland Result Icelandic victory An agreement was reached between the United Kingdom and Iceland in which the former accepted the Icelandic expansion but received a temporary allowable catch for its fishing fleet. Territorial changes Iceland expands its exclusive fishery zone to 200 nautical miles.
States involved
Iceland	United Kingdom West Germany Belgium
Commanders and leaders
Geir Hallgrímsson Capt. P. Sigurðsson Cdr. G. Kjærnested Cdr. Helgi Hallvarðsson	Harold Wilson James Callaghan Adm. Edward Ashmore
Strength
4 large patrol vessels 2 small patrol vessels 2 armed trawlers 1 Fokker F27 surveillance aircraft	22 frigates 7 RFA supply vessels Ministry of Agriculture,  Fisheries and Food 6 defence tugs
Casualties and losses
5 patrol vessels damaged	1 trawlerman wounded 15 frigates damaged 1 supply ship damaged

At the third United Nations Conference on the Law of the Sea in 1973, several countries supported a 100 nmi (185 km) limit to territorial waters. On 15 July 1975, the Icelandic government announced its intention to extend its fishery limits. The Third Cod War (November 1975 – June 1976) began after Iceland again extended its fishing limits, now to 200 nmi (370 km) from its coast. The British government did not recognise the large increase to the exclusion zone and so an issue occurred with British fishermen and their activity in the disputed zone. The conflict, which was the most hard-fought of the Cod Wars, saw British fishing trawlers have their nets cut by the Icelandic Coast Guard, and there were several incidents of ramming by Icelandic ships and British trawlers, frigates and tugboats.

One of the most serious incidents occurred on 11 December 1975. As reported by Iceland, V/s Þór, under the command of Helgi Hallvarðsson, was leaving port at Seyðisfjörður, where it had been minesweeping, when orders were received to investigate the presence of unidentified foreign vessels at the mouth of the fjord. The vessels were identified as three British ships: Lloydsman, an oceangoing tug three times bigger than V/s Þór; Star Aquarius, an oil rig supply vessel of British Ministry of Agriculture, Fisheries and Food; and the latter's sister ship, Star Polaris. They were sheltering from a force nine gale within Iceland's 12-nautical-mile (22 km) territorial waters. In the Icelandic account, when ordered to leave Icelandic territorial waters by the commander of Þór, the three tugboats initially complied. However, around 2 nautical miles (3.7 km) from the coast, Star Aquarius allegedly veered to starboard and hit Þór's port side as the Coast Guards attempted to overtake her. Even as Þór increased speed, Lloydsman again collided with its port side. Þór had suffered considerable damage by these hits and so when Star Aquarius came about, a blank round was fired from Þór. That did not deter Star Aquarius, as it hit Þór a second time. Another shot was fired from Þór as a result, this time a live round that hit the bow of Star Aquarius. The tugboats then retreated. V/s Þór, which was close to sinking after the confrontation, sailed to Loðmundarfjörður for temporary repairs.

The British reports of the incident differ considerably and maintain that Þór attempted to board one of the tugboats, and as Þór broke away, Lloydsman surged forward to protect Star Aquarius. Captain Albert MacKenzie of Star Aquarius said that Þór approached from the stern and hit the support vessel before it veered off and fired a shot from a range of about 100 yards (90 m). Niels Sigurdsson, the Icelandic Ambassador in London, said that Þór had been firing in self-defence after it had been rammed by British vessels. Iceland consulted the UN Security Council over the incident, which declined to intervene.

File:Vs Þór enganging Star Aquarius and Lloydsman on 11 December 1975.jpg

The incident between V/s Þór and the British MAFF ships Lloydsman and Star Aquarius, as seen from an Icelandic maritime surveillance aircraft

The immediate Royal Navy response was to dispatch a large frigate force, which was already well on the way to Icelandic waters, before the Prime Minister, Harold Wilson, or the Foreign Secretary, Anthony Crosland, were informed. The Royal Navy saw the opportunity to demonstrate the capabilities of its older Type 12 and Type 81 frigates for sustained deployment in the area of the Denmark Strait, where they were expected to deter the passage of Soviet submarines while the Royal Navy was threatened by further serious defence and naval cuts by the Royal Navy's chief bête noire, the Chancellor of Exchequer and former Minister of Defence, Denis Healey. The Royal Navy saw its strategic aim at the time to be as much fighting Healey as the Soviet Navy. The Second and Third Cod Wars were seen as necessary conflicts by the Royal Navy, like the Falklands War, six years later. To Crosland, also MP for the trawler port of Grimsby, the third war was a more serious threat to the Western Alliance than was the Middle East.

Another incident occurred in January 1976, when HMS Andromeda collided with Þór, which sustained a hole in its hull; the hull of Andromeda was dented. The British Ministry of Defence said that the collision represented a "deliberate attack" on the British warship "without regard for life". The Icelandic Coast Guard, on the other hand, insisted that Andromeda had rammed Þór by "overtaking the boat and then swiftly changing course". After the incident and facing a growing number of ships enduring dockyard repairs, the Royal Navy ordered a "more cautious approach" in dealing with "the enemy cutting the trawlers' warps".

On 19 February 1976, the British Minister of Agriculture, Fisheries and Food, Fred Preat, announced that a fisherman from Grimsby had become the first British casualty of the Third Cod War, when a hawser hit and seriously injured him after Icelandic vessels cut a trawl. While a British parliamentary source reported in a 1993 debate that a British trawlerman was accidentally killed by a solid shot fired by an Icelandic patrol boat, this suggestion has not been corroborated by any other historical source.

Britain deployed a total of 22 frigates and ordered the reactivation from reserve of the Type 41 frigate HMS Jaguar and Type 61 HMS Lincoln, refitting them as specialist ramming craft with reinforced wooden bows. In addition to the frigates, the British also deployed a total of seven supply ships, nine tugboats and three support ships to protect its fishing trawlers, but only six to nine of the vessels were on deployment at any one time. The Royal Navy was prepared to accept serious damage to its Cold War frigate fleet, costing millions and disabling part of its North Atlantic capacity for more than a year. HMS Yarmouth had its bow torn off, HMS Diomede had a 40 ft gash ripped through her hull, and HMS Eastbourne suffered such structural damage from ramming by Icelandic gunboats that it was assessed as being no longer fit for sea service and was reduced to a moored operational training frigate. Iceland deployed four patrol vessels (V/s Óðinn, V/s Þór, V/s Týr, and V/s Ægir) and two armed trawlers (V/s Baldur and V/s Ver). The Icelandic government tried to acquire US -class gunboats and when it was denied by Henry Kissinger, it tried to acquire Soviet -class frigates instead.

A more serious turn of events came when Iceland threatened closure of the NATO base at Keflavík, which would have severely impaired NATO's ability to deny access to the Atlantic Ocean to the Soviet Union. As a result, the British government agreed to have its fishermen stay outside Iceland's 200 nmi (370 km) exclusion zone without a specific agreement.

On the evening of 6 May 1976, after the outcome of the Third Cod War had already been decided, V/s Týr was trying to cut the nets of the trawler Carlisle when Captain Gerald Plumer of HMS Falmouth ordered it rammed. Falmouth, at a speed of more than 22 knots (41 km/h; 25 mph), rammed Týr, almost capsizing her. Týr did not sink and managed to cut the nets of Carlisle, and Falmouth rammed it again. Týr was heavily damaged and found herself propelled by only a single screw and pursued by the tugboat Statesman. In the dire situation, Captain Guðmundur Kjærnested gave orders to man the guns, in spite of the overwhelming superiority of firepower HMS Falmouth enjoyed, to deter any further ramming. In return, Falmouth suffered heavy bow damage. The Third Cod War saw 55 ramming incidents altogether.

In NATO-mediated sessions, an agreement was reached between Iceland and the UK on 1 June 1976. The British were allowed to keep 24 trawlers within the 200 nmi limit and fish a total of 30,000 tons.

While Iceland came closest to withdrawing from NATO and expelling US forces in the Second Cod War, Iceland actually took the most serious action in all of the Cod Wars in the Third Cod War by ending diplomatic relations with the United Kingdom on 19 February 1976. Although the Icelandic government was firmly pro-Western, the government linked Iceland's NATO membership with the outcomes of the fishery dispute. If a favourable outcome could not be reached, Iceland implied that it would withdraw from NATO. However, the government never explicitly linked the US Defence Agreement to the outcome of the dispute.