Russia is Shipping More Oil Through The Arctic Route To Chinese Ports

The US is closely monitoring a recent uptick in Russia’s crude oil exports to China’s ports via the Northern Sea Route (abbreviated the NSR), indicating growing collaboration between Moscow and Beijing in the Arctic area as Russia confronts severe Western sanctions for invading Ukraine.

Nobody up there is looking for conflict. A close eye will be kept on it, John Kirby, the National Security Council coordinator who looks into strategic communications, said on Tuesday during a White House news conference.

In 2023, there have been about a dozen shipments of Russian oil to China along the NSR, which runs along Russia’s coast to the Bering Strait from the Barents Sea. Per data gathered from Nord University’s Center for High North Logistics, there have been no oil exports over the Arctic to China in previous years, with the exception of one testing journey in late 2022.

With Western economic sanctions limiting demands for Russian crude oil and China being eager to buy it, Moscow is extending its Arctic door to Beijing, per the Arctic Institute founder Malte Humpert.

It’s a wise decision for Moscow. Shipping through the NSR is about 30% faster than the usual Suez Canal route and easier to sail as climate change implies a smaller amount of ice to negotiate.

The increased traffic poses a greater environmental danger, especially because Moscow has indicated that it would begin shipping oil in the Arctic using non-ice class tankers (ships whose hulls are not hardened against ice).

Chinese oil imports from Russia reportedly climbed by 23% this year, to 400,000 barrels per day, compared to 2022 averages.

Kirby encouraged Beijing to adhere to the $60-per-barrel price restriction on Russian oil levied by the Western allies in the aftermath of Russia’s war. However, trading records reveal that Russia’s crude oil is selling for around $80 a barrel, forcing US Treasury Secretary Janet Yellen to admit this week that the price cap’s usefulness may be waning.

China and Russia ties

As Western energy majors, including British Petroleum and Shell, backed out of Russia following the war in 2022, Moscow started increasingly relying on Beijing for finance for energy projects like the Yamal LNG Terminal as well as other Arctic infrastructure projects.

Investing in Russian projects might help China, which has no Arctic coastline but proclaimed itself a “near-Arctic” power in 2018, achieve its objective of expanding its Arctic role, increasing access to maritime routes and natural resources, and bolstering its geopolitical clout.

So far, Beijing’s plans have been blocked by Moscow, the coastline of which accounts for 53% of the Arctic Ocean coastline and is fiercely protective of its northern dominance. However, confronted with economic isolation as a result of its invasion, Russia’s days of resistance may be numbered.

Kirby associated with the NSC dismissed concerns regarding an evolving geopolitical alliance between Beijing and Moscow, claiming that their Arctic collaboration has been mostly “economic and scientific.”

He further implied that the administration’s goal is not to limit Russia’s strength on its own soil.

The Arctic is bordered by eight countries: the United States, Russia, Canada, Denmark (through Greenland), Iceland, Norway, Sweden, and Finland. They are all members of the Arctic Council, a platform for collaboration on issues like shipping routes, climate change, and Indigenous peoples’ rights.

The council ceased operations with Moscow immediately after the Russian invasion of Ukraine. According to Morten Hglund, chair of the Senior Arctic Officials, the group obtained consensus in August to reactivate the working groups, the first step in resuming cooperation.

References: VOA News, Bloomberg

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Source: Maritime Shipping News