In this corner of the far north of Norway, only five miles from the border with Russia, road signs give directions in Norwegian and Russian. Locals are used to crossing from one country to another without a visa: Norwegians fill up with cheap Russian petrol; Russians hit the Norwegian malls.

A few years ago, these cross-border connections inspired Terje Jorgensen, the director of the Norwegian port of Kirkenes, to propose closer connections with the Russian port of Murmansk to build on the growing interest in trans-Arctic shipping routes that connect Asia to Western Europe. He wanted to develop common standards for sustainability and easier transport between the two ports.

But then President Vladimir V. Putin sent his troops to march into Ukraine, halting the entire project.

“It could be developed into something,” Mr. Jorgensen said of his preliminary discussions with the Russians. “But then the war came, and we got rid of the whole thing.”

The war may be more than a thousand miles to the south, but it has created a chasm in this part of the world that prided itself as a place where Westerners and Russians could get along. Over the past year, trade, cultural and environmental ties have been frozen while borders have been tightened, part of efforts to punish Moscow for its brutal war in Ukraine.

In Kirkenes, a city of 3,500 built around the small port, security fears have upended a business model focused on cross-border connections.

On a recent weekday, no shoppers braved the chilly June wind in the tiny downtown. At the nearby mall, older Norwegians shopped in the drug store, while a lone tourist from Germany looked for rain gear.

Some chain stores, drawn here in part to sell their wares to Russians hungry for Western brands and gadgets, have warned they might pull out of Kirkenes, said Niels Roine, the head of the regional Chamber of Commerce. That would further weaken a retail sector that has seen a 30 percent drop in revenue since the war.

The widening divide between the two countries is a rebuke to Norway’s policy, instigated after the breakup of the Soviet Union in the 1990s, to encourage business leaders to look east. Two malls immediately sprung up to cater to Russians looking for Western clothes, gifts, disposable diapers and alcohol.

“It was a local, regional and national strategy to focus on turning to Russia,” Mr Roine said.

More than 266,000 people from Russia crossed the nearby border station into Norway in 2019; last year, that number dropped by more than 75 percent. Cross-border hockey games and wrestling matches between students stopped, and the Arctic Councila multinational forum that promotes collaborative businesses in the region, was interrupted.

At the same time, Russian can still be heard on the streets, and Russian fishermen, attracted to nearby waters by cod and other species, are allowed to dock at the port, although they are no longer allowed to visit the shops and restaurants in Kirkenes and two other Norwegian port cities and their ships are searched by the police.

For decades, the vast quantities of cod in the Barents Sea – home to one of the world’s last surviving fish – have drawn people and businesses from both countries to this Arctic Circle community. Norwegian fishermen alone landed fish worth $2.6 billion in 2022, according to government figures. Kirkenes’ major industrial employer is Kimek, a shipbuilding company that thrived repairing commercial fishing boats known as trawlers, especially Russian ones.

A shared interest in preserving the cod stocks yielded a unique bilateral agreement forged during the Cold War. The cod tend to spawn in Russian waters but then reach adult size in Norwegian waters. Fishermen from Russia are allowed to catch their quota of cod in Norwegian waters in exchange for not catching the young cod in their own national waters.

“The main fish stocks migrate through the zones of both countries,” said Anne-Kristin Jorgensen, a researcher at the Fridtjof Nansen Institute, which focuses on international environmental, energy and resource management.

“Norway and Russia have to work together to manage them if they want to continue fishing,” Ms Jorgensen said. “Both parties know this is necessary.”

But that deal is strained. Last year, Oslo restricted the access of the Russian trawlers only to Kirkenes and two other ports. And this spring, as fears boiled over that Russians, under the guise of fishing, could sabotage critical infrastructure such as undersea cables, Norwegian authorities curtailed the services they could receive in port. Only necessities, such as refueling, food and emergency repairs, are now allowed.

That sent tremors through the Kimek shipyard, the largest industrial employer in the region. Its towering building can be seen almost everywhere in the city.

In June, the boat repair company said the restrictions caused it to lay off 15 people.

“I am worried, for all of you talented employees and family members, but also for what society here will look like in a few years,” Greger Mannsverk, Kimek’s chief executive, said in a statement announcing the layoffs. “I hear that many other businesses here are noticing the decline in business and turnover, and that they are also considering measures to tighten spending.”

Mr. Mannsverk, who declined requests for an interview, is not the only official worried about the region’s future.

We are facing a very dramatic situation here,” said Bjorn Johansen, the regional head of LO, Norway’s influential trade union. He highlighted a number of crises the area has faced, including the loss of jobs when an iron ore mine closed in 2015 and the coronavirus pandemic. “And now,” he added, “the door to Russia has been closed for many, many, many years.”

Some businesses have cut ties to Russia and are working to expand away from the giant neighbor to the east. One of these is Barel, a manufacturer of special electronics used in offshore ships and aircraft, founded in Kirkenes 30 years ago. After closing its factory in Murmansk after the Russian invasion, it aims to expand production in Norway. The company is proud of its location near the Barents, selling it as a unique asset, but finding workers is a challenge.

After the Russian invasion of Ukraine, Barel brought in Russian workers who wanted to move across the border, but it still needs 15 more workers to reach its goal of 50, said Bard Gamnes, the company’s chief executive.

“We are trying to target the coastal areas where the work in fisheries is decreasing and show them that although we are a high-tech business, a lot of what we do is actually manual work,” said Mr. Gamnes in an interview in The Boardroom de Barel, above the company’s shop floor.

Kenneth Sandmo, the head of trade and industrial policy at the LO union, pointed out that such skilled jobs are essential to maintain a stable local economy. Tourism jobs, which are often seasonal and pay less, have less impact, he said.

“If you have 80 people working in an industry, that will create another 300 jobs in the community,” Mr Sandmo said. “You don’t find that in tourism.”

However, the Snowhotel in Kirkenes attracts guests year-round to sleep in elaborately decorated rooms resembling igloos – the hotel recommends wearing long underwear even in summer – and Hurtigruten cruise ships drop travelers off in Kirkenes as the final stop on their journey along Norway’s coast. .

Hans Hatle, the founder of Barents Safari, a tour company, spent years as an army officer training rangers to defend Norway’s border with the Soviet Union. He now escorts tourists by boat to that same border, telling the story of the role of the Russians and Finns in the region.

“We’ve had a lot of changing politics here,” he said, standing on a rock on the edge of Western Europe. With warming temperatures making popular destinations in Spain and Italy unseasonably hot, he is confident Kirkenes has a bright future as a tourist destination.

“We have to keep thinking in new ways,” Mr. Hatle said. “But I’m sure we’ll make it.”

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