- Apr 2018
Since you mentioned the convoys it wouldn't be wrong to point out a few things -Convoys originating from Trondheim, Norway, taking a detour towards Jan Mayen and then approaching Iceland from north would keep them out of range of RAF.
Why couldn't it be done, when much larger and much dangerous Arctic convoys were possible later on?
1) First of all, the Convoys, although contributed a great deal in absolute terms towards the Russian war effort, in comparative terms had very little contribution to the same. It's fundamental importance was in maintaining a very good relation between Churchill and Stalin. That was why RN kept on running this service in spite of such peril. For Germany, the occupation of Iceland would never have been of such importance to risk its far fewer naval assets and perishable resources in running convoys like that. Remember that occupation/subjugation of Britain was never the primary agenda of Hitler. Everything he wanted was in the east. That's why even after the failure of the Battle of Britain, Barbarossa began without fail.
2) After Norway, you couldn't even ask Kriegsmarine to take up such an operation. It's simply unthinkable. The RN was the biggest Navy in the world. They could run the convoys even after sustaining regular losses both with the convoys and elsewhere. Let alone warships, the German merchant navy couldn't afford to risk that many transports as would have required to keep even a token occupation force well supplied in Iceland. Resources were scarce for everyone in the early days of the war and Germany still had the east to conquer.
I'll suggest you a book. 'Target Tirpitz' by Patrick Bishop. You'll get a good idea about the overall condition of the Kriegsmarine as background information.