Abstract An extreme Arctic cyclone (AC) in October 2022 reached a record‐low pressure of 955 hPa and caused unusual wave‐induced sea‐ice breakup in the Canada Basin, making it the strongest event in the western Arctic in 30 years. Here we examine how this event interrupted freeze‐up by quantifying sea‐ice retreat associated with atmospheric and oceanic thermodynamic anomalies, focusing on positive surface energy balance (SEB) anomalies and enhanced ocean heat content (OHC). Using a latent heat of fusion framework, we estimate melt‐equivalent sea‐ice thickness (SIT) reductions from anomalous SEB and OHC. Oceanic thermodynamics may cause up to 14 cm of upper‐bound SIT potential reductions, exceeding the atmospheric contribution of 1 cm. Atmospheric forcing peaked 1 day before the cyclone maximum, whereas oceanic forcing peaked at the storm peak. The discrepancy between thermodynamic estimates and observed ice‐cover changes suggests that mechanical redistribution and wave‐induced fragmentation may have delayed freeze‐up and enhanced open‐water exposure.