Ólafsfjörður is a village in the northern region of Iceland, where fishing and fish processing form the main base of the town's economy. Historically, it is a relatively recent community by the shoreline, like many towns and villages in Iceland. The town came into existence at the end of the 19th century and developed mainly in the first half of the 20th century. Like its sister town, Siglufjörður in the Fjallabyggð municipality, Ólafsfjörður fjord, as well as the town has a history of isolation and lack of communication throughout the centuries. It is placed in a small fjord surrounded by steep mountains with limited ways to build roads. Unlike Siglufjörður, though, the lowland in a valley southwest of the coastline is considerably larger, providing better room for agriculture and farming. So, for centuries, the area was mainly a typical agricultural area with self-sustaining and survival food through local fishing as well.
Fishing and fish processing developed late
It wasn't until the beginning of the 20th century that fishing developed into a business in Ólafsfjörður. Icelanders started to take advantage of their rich fishing grounds for local markets and export. This started with the introduction of docked vessels, mostly with motorboats around the turn of the 20th century. The change from rowing boats made it easier to sail from the fjord, or at that time the hamlet, to the open sea and cultivate fishing stock farther from the shore, opening the path for Ólafsfjörður to become a fishing village. A good harbor was built in the fifties that helped speed up the development of the town's economy.
One of the first communities to use geothermal heating
Today the village is a typical Icelandic fishing village, and the economy and livelihood of the residents mainly depend on the fisheries and fish processing. Most houses are single-family houses built in the fifties up until the seventies in the last century. The houses are heated with geothermal heating from a power plant built in 1940, so Ólafsfjörður has been a green village for decades. As a town in an isolated fjord, communication and transportation on land was always difficult, and it could be argued that it still is. However, the road from Eyjafjörður fjord around Ólafsfjarðarmúli small peninsula was built in the late 20th century and was the first serious road connecting the town to other parts of the country. This is the same road used today as part of the road to Ólafsfjörður. Driving down this road is intimidating, although a 4km tunnel opened in 1991, which vastly improved the road and made it safer.
A fishing village in a growing municipal
The village and the Fjallabyggð municipality offer excellent services to their residents. The community has always emphasized education and offered good schools from preschool to secondary schools. Today the Fjallabyggð Municipality also offers a pre-college education after the opening of the tunnel Héðinsfjarðargöng in 2010 that connects the town of Siglufjörður and Ólafsfjörður. Ólafsfjörður has excellent sports facilities and a lovely swimming pool. Skiing has always been big in Ólafsfjörður, and many of the best skiers in Iceland have come from Ólafsfjörður, both downhill and cross-country skiing. The camping site is right outside the swimming pool with excellent facilities and access to electricity.
Most of the tourists that come to Ólafsfjörður drive on the Tröllaskagi peninsula, which is a considerable addition to the Ring Road. If you do that, be prepared to add a day to your Ring Road trip and find accommodation either in Ólafsfjörður or Siglufjörður. At the same time, you are adding a visit to many interesting towns and villages and beautiful scenic drives.