The scene is like something from a Biblical epic: 2,000 sheep are being driven across a desert of black lava. The sky overhead is bright blue and filled with the sound of bleating. Every now and again, a sheep breaks loose and heads up the rocky hillside, from where it has to be coaxed back down. Herders, some on foot and some on stocky Icelandic horses, surround the flock, yelling and gesturing to keep the animals in a bunch. A support group of four-wheel drive vehicles is rumbling slowly behind us, but the main actors in this drama haven’t changed in over a thousand years: Icelanders, sheep, horses.

I’m on foot, patrolling one corner of the herd, trying to deter a particularly stubborn ewe from running off. But the key members of the group are on horseback. A middleaged man whose shabby riding gear belies his importance here maneouvres his horse expertly around the rocks. With a few gestures, he dispatches a group of riders to round up sheep from the other side of the valley. His name is Kristinn Gunnarsson and he’s the fjallkonungur, the mountain king. For more than 30 years he has led this annual sheep drive across the rugged uplands of southern Iceland.

Every September, all over the country, groups of farmers under the generalship of a mountain king herd their sheep down from the summer pastures to be sorted and taken to their home farms for the winter. ‘We’ve made a few changes but basically we’re doing it the same way that our ancestors did,’ Kristinn says. ‘You couldn’t do it without the horse.’

Icelanders are crazy about their horses. It’s an enthusiasm based partly on the unique qualities of the Icelandic horse and partly on a debt of gratitude. Without Icelandic horses, Icelandic humans would have died out centuries ago. Smaller, stockier, shaggier, more agile and more even-tempered than their cousins elsewhere, Icelandic horses are perfectly adapted for the harsh climate and the challenging volcanic terrain.

The Vikings who settled Iceland in the ninth century found an uninhabited island. It was an otherworldly place: bleak, windswept, and with a landscape dominated by active volcanoes. There was no king or nobility. To those hardy enough to survive here, it offered a life ruled only by the elements. They populated it, brought livestock by boat, and then quickly exhausted the island’s forests. Without wood to build boats, the settlers relied on horses as their sole form of transport and as food. To this day, there is love but not sentimentality for the horse. If you ask an Icelander if they like horses, be prepared for the answer: ‘Yes, they’re delicious.’

Cut off from the rest of the world, the Icelanders have maintained an extraordinary continuity with their ancestors. The DNA of the people and livestock, the language, and many of the customs have evolved in an unbroken tradition. Today, watching a rangy, red-haired farmer on an Icelandic horse shouting at his long-haired Icelandic sheep in a largely unchanged dialect of Old Norse is the closest any of us will get to a Viking Jurassic Park.

Horses in Iceland are not, as they are in the UK, the preserve of a horse-owning aristocracy who have spent centuries training them to mow down Frenchmen and plebeians. They are the working horses of a free republic of farmers. There are 70,000 horses in a country of 330,000 people: horses are for everyone. One consequence I notice is a completely demystified approach to riding. There is a rustic directness about it. Getting on a horse in Iceland is not like being initiated into an exclusive equine cult. It’s more like being chucked a set of car keys. But I am a novice rider. And before I’m ready to do the sheep drive on horseback, I think I need at least one lesson.

Marteinn Hjaltested is a huge man with a sweep of red-blond hair and an outdoor complexion. He and his wife Lea Helga Olafsdottir run a riding school and a farm called Hestheimar on windswept downs an hour and half outside Reyjkavík. From their kitchen window, you can see the snowy volcanic peak of Eyjafjallajökull. ‘I’ve ridden other horses,’ Marteinn says. ‘When they galloped, I felt every movement. It’s not for me. The Icelandic horse is soft and quiet, they’re like mountain goats.’

Lea helps me onto a 20 year-old gelding called Bleik Besi. I ride him tentatively around the indoor arena. My experience of horses is minimal, but after a couple of circuits, Lea says I’m ready to head out. We ride along the path, downhill through the treeless landscape. Horses are pastured, two or three to a field, in the tawny meadows around us. As the afternoon draws on, the sky clears and the volcano far to the east turns golden.

I feel a strange exhilaration when Bleik Besi goes where I ask. He stops on command when I tighten the reins and call out ‘hoo!’ He uncomplainingly fords a trout stream. We climb a small hill and descend it into a narrow valley. ‘Okay,’ says Lea, ‘Let’s tölt.’ This is what Icelandic horses are most famous for. In addition to walking, trotting, cantering and galloping, Icelandic horses have this famous fifth gait: the tölt.

Lea instructs me to sit deeper in the saddle, shorten my reins, and make a clucking sound with my tongue. Bleik Beisi alters his pace. He goes faster, and his hooves beat out a two-beat rhythm that Lea says should sound like ‘Black and Decker, Black and Decker’. There’s a distinct change of gear: a smooth and powerful surge of energy. This is the gait that Icelanders say makes their horses so comfortable to ride for long distances.

I slow down as Lea points out a low building in the distance. ‘That used to be the community house,’ she says. ‘We used to have card games and dances there. People say it’s haunted now.’ She says it matter-of-factly, as though the problem could equally well have been a leaky roof or a blocked drain. Lea makes it clear that she doesn’t believe in ghosts herself, but there is an undercurrent of superstition in Iceland that takes you a while to notice, and which sits oddly with the pragmatism and self-reliance of the islanders. Back at the stables, over a cup of hot chocolate, Marteinn tells me that there are unexpected hazards for the unwary rider.

‘We had a lot of problems,’ he says gravely. He tells me of a number of incidents when horses behaved strangely. In the worst of them, a young horse bolted as Marteinn was dismounting and smashed him into the bars of a metal fence. ‘You can’t be certain that it’s not elves,’ he says with a surefooted logic that even Richard Dawkins would have difficulty refuting. His solution was to bring down a woman from Reyjkavík who was gifted with second sight. She managed to intercede and make peace with the troublesome sprites. There has been, touch wood, no recurrence.

An hour north of Hestheimar farm, the tarmac gives way to an unsurfaced road that winds up into the mountains. Ominous signs warn the unwary about going further in an inadequate vehicle. It’s the day after my riding lesson. I’m returning in my rented car to rejoin the sheep drive, and I’ve decided to promote myself to the cavalry.

The round-ups that Kristinn leads last five days. Over that time, sheep are gathered in from a 350-square-mile area and driven 45 miles to the sorting pens. At the heart of the group are a dozen farmers and their families and friends, many of whom come year after year, and there are also walkers and riders who have joined the group.

I arrive in time for dinner. The group spends each night in huts in the mountains, eating together and sharing rooms. In the communal dining room the dim light gives the place the feeling of one of Iceland’s ancient turf-roofed longhouses. Knitted socks hang over the edge of a bunk. A group of children play cards. Hungry farmers and riders eat plates of smoked lamb, potatoes, beetroot and canned peas. Towards 10 o’clock, people start freshening their fruit juice with shots of Jim Beam. Outside, the sky is radiant with stars, the sound of Icelandic songs rises into the freezing air.

In the morning, the group saddles up. Ingvar Gudbjornsson farms sheep in the mountains and is driving his flock down to the pens. He has the task of coordinating the less experienced riders. There’s a Latvian called Pavel who has never ridden a horse. He’s joined late in the round-up, but after a quick introduction to his horse, he’s off. Ingvar has picked me a horse called Snillingur, whose name means ‘genius’.

Trying to recall as much as I can from my riding lesson, I put my foot in the stirrup and swing myself into the saddle. My excitement is accompanied by fear. The terrain is difficult: we’re riding up and down rocky hillsides. The day before, a rider fell badly and had to be helicoptered to the hospital with two broken ribs. And you can never rule out the possibility of elves.

I follow Ingvar and we ride in two widely spaced columns along either side of the flock. Our task is both challenging and gratifyingly simple. We ride in a loose formation, forcing the sheep into a single bunch as we move towards the neck of a valley. We are a mounted offside trap. Snillingur is obedient and nimble, picking a careful path through the rocks. When a rogue ewe threatens to break out from the group behind me, I’m able to turn her with ease and escort her back to the herd.

We head uphill, across crumbly volcanic rock through a narrowing defile that rises to the top of a ridge. Nothing has prepared me for the view: a vast valley of black gravel sweeps into the distance under a sapphire sky. To our left, the snowy summit of Mount Hekla soars above the valley. We remount. The herd of sheep – now swollen to about 5,000 – pours downhill like a river of white water. Bleats and shouts rise above the flock. What strikes me most of all is the connection I feel to Snillingur. I’m proud of his equanimity. He doesn’t stumble on the tricky terrain. He’s unfazed by the yelling all around him. There’s no hyperbole in his name – the horse is a genius.

The herd and riders leave a dusty imprint across the valley floor. On its far side we begin climbing again. The final section is so steep that most of us dismount. From the top, we look down into the valley of Afangagil. Half a mile down, there’s a fenced off section of pasture. The ewes seem to recognise it and stream towards it. These are the sorting pens, from where the sheep will be taken back to their home farms for winter. After five hours in the saddle, and with huge regret, I dismount. I see Latvian Pavel, the other novice rider. He’s intact, saddle-sore, and radiant with sunburn and elation.

The next day ’s sheep sorting is the equivalent of a harvest festival. It’s a celebration for the farms and communities that live near Hekla. It’s a free-for-all in the sheep pens as children help identify the animals and drive them into the sections for each farm. There are warm handshakes and promises to see each other at next year’s round-up.

It’s time to say farewell to King Kristinn. I thank him for looking after me and tell him I feel like I’ve had a personal epiphany: it turns out I love riding. And I say that I’ve been struck by the inclusivity of the group and the fact that I felt I made a useful contribution. ‘That’s the whole point,’ he says. ‘I’ve got to have everyone involved. I’ve got to choose the right people for the right jobs.’ And he heads back into the sheep pens to finish his work.

I climb the hill for a last look at Hekla. The sun hasn’t yet reached the slope and the earth is still frozen. My foot brushes against something sticking out of the scree. I dig around it – it’s a rusty horseshoe! It’s cold and gratifyingly weighty. I imagine it on my mantelpiece: bringing me luck, reminding me of Snillingur, enticing people to ask me about my horsemanship. Smugly, I clean it off and put it in the back of the car.

Three hours later, back in Reyjkavík, the horseshoe is nowhere to be found. I search for it with frustration, but to no avail. I have no idea what happened to it – but I seem to hear Marteinn Hjaltested saying: ‘You can’t be certain that it’s not elves.’

The article 'Iceland on horseback' was published in partnership with Lonely Planet Traveller.