Warming temperatures and thawing sea ice could soon allow for the expansion of maritime routes through the Arctic region at certain times of the year. Polar powers looking to capitalize not only on the shortened shipping lanes but also on the natural resources that exist there are eyeing up this geopolitically strategic space, with Russia and also China, which is a part of the Arctic Council and a self-defined 'near-Arctic state', having become two of the most prominent players in the region.
Currently, the main shipping route between Asia and Europe passes from China to Rotterdam via the Suez Canal. But the fragility of the transit route was revealed in 2021 when the Ever Given ship blocked the passage, halting traffic for 7 days. And so a new route through the Arctic could save time for the transportation of goods.
In 2018, Beijing released a white paper on how China could extend its Belt and Road Initiative to the Arctic region, suggesting that polar stakeholders could work together on connectivity and economic and social development, including the exploration and exploitation of resources such as oil, gas and minerals, as well as on scientific research into the effects of climate change on the region. According to Deutsche Welle, the United States is worried about what this means, while Russia “smells business.”
As Statista's Anna Fleck shows in the following chart, four main maritime routes have been identified to cut through the Arctic: the Northwest Passage (NWP), the Northern Sea Route (NSR), the Transpolar Sea Route (TSR) and the Arctic Bridge Route (ABR).
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The Northern Sea Route connects the Asian and European economies and is predominantly located along Russia’s coast. According to the Silk Road Briefing, much of the initial Polar Silk Road will focus on the NSR, since it could reduce the time and cost of shipping goods between Europe and Asia by up to 35 percent. On the other side of the north pole, the NWP connects the Pacific and Atlantic Oceans via the Canadian archipelago. While both have experienced reduced ice coverage in recent years, they are still not consistently usable for commercial shipping, needing icebreakers even in the summer months.
The other two routes that could be used in the future are the Arctic Bridge Route, which connects the Churchill port in Canada to the port of Narvik in Norway and the Murmansk port in Russia, as well as the Transpolar Sea Route, which would connect the Bering Strait with the Atlantic Ocean near Murmansk. According to the Climate Change Post, in a high-end scenario of climate change, these two routes could be open for shipping by the 2070s.
From an environmental perspective, despite ships potentially covering fewer nautical miles, having more vessels going through the Arctic where global heating already happens faster will further exacerbate melt. More ships would also lead to more pollution through emissions as well as an increased likelihood of oil spills.
By Zerohedge.com
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It makes Russia the master of the Arctic and gives it alternative and more secure export routes for its oil, gas and LNG particularly to its biggest customer China. Moreover, the NSR is the shortest maritime link between Asia and Europe.
For China, it enhances its energy security as it helps it to some extent to reduce its exposure to risky chokepoints like the Strait of Hormuz and the Malacca Strait through which 80% of China’s oil imports pass daily.
Russia has been for years investing heavily in the NSR. It has built the world’s only nuclear-powered icebreaker fleet to open up Russia’s Arctic coastline. The NSR will definitely expand Russia’s trade with the world not only in oil and gas but also in agricultural products and fish. Freight traffic is reported to have increased from 4 million tons in 2014 to 34 million tons in 2022 or 750%.
Since its launch in 2013, China’s Belt & Road Initiative (BRI) has been a great success offering investments and soft loans of nearly $1 trillion to poor and developing countries to help them build and/or modernize their infrastructure and create wealth. It has expanded global trade and also enabled China to integrate its economy deeper into the global trade system and also benefit from the new expanded economies.
By extending the BRI to the Arctic region, China could contribute significantly to the development of the Arctic including the exploration and exploitation of resources such as oil, gas and minerals.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert