Russia Shipping More Oil to Chinese Ports Via Arctic Route

beijingwalker · Oct 4, 2023

Russia Shipping More Oil to Chinese Ports Via Arctic Route

October 04, 2023 0:29 AM

Patsy Widakuswara

FILE - A crude oil tanker is seen anchored at the terminal Kozmino in Nakhodka Bay near the port city of Nakhodka, Russia, Dec. 4, 2022.

WASHINGTON —
The United States is closely watching a recent surge of Russian crude oil shipments to Chinese ports through the Northern Sea Route (NSR), a sign of increased cooperation between Beijing and Moscow in the Arctic region as Russia faces crippling Western sanctions over its invasion of Ukraine.

“Nobody's looking for conflict up there. We'll watch this as closely as we can,” John Kirby, National Security Council coordinator for strategic communications, said Tuesday in response to VOA’s question during a White House news briefing.

This year there have been roughly a dozen shipments of Russian oil using Russian vessels to China via the NSR, which follows Russia’s coast from the Barents Sea to the Bering Strait. In prior years there were no oil deliveries via the Arctic to China except one trial voyage in late 2022, according to data from Nord University’s Center for High North Logistics.

With Western economic sanctions reducing demand for Russian crude oil and China willing to purchase it, Moscow is opening its Arctic door for Beijing, said Malte Humpert, founder of the Arctic Institute.
“Resources that previously flowed to Europe have now been diverted to Asia, especially China,” he told VOA.

It’s a pragmatic choice for Moscow. Shipping via the NSR is 30% faster than the traditional route through the Suez Canal and increasingly easier to traverse as climate change means less ice to navigate.
The increased traffic carries a higher environmental risk, particularly as Moscow announced it will begin using non-ice class tankers – ships with hulls that are not strengthened against ice – to ship oil across the Arctic.

“If there was a spill in Russia's Eastern Arctic, the water circulates towards the United States,” Rebecca Pincus, director of the Polar Institute at the Wilson Center, told VOA. “Oil will float across international boundaries, and it is just a very alarming situation.”

Compared with 2022 averages, China's oil imports from Russia increased by 23%, to 400,000 barrels per day this year.

Kirby urged Beijing to abide by the $60/barrel price cap on Russian oil imposed by Western allies following Russia’s invasion. However, trading data shows that Russian crude oil is currently selling at roughly $80 per barrel, prompting U.S. Treasury Secretary Janet Yellen to acknowledge last week that the effectiveness of the price cap may be fading.

China-Russia ties
As Western energy companies, including Shell and British Petroleum, pulled out of Russia over the invasion last year, Moscow is increasingly depending on Beijing as a source of financing for energy projects, such as the Yamal LNG Terminal and other infrastructure plans to develop the Arctic region.

For China — which has no Arctic coastline but in 2018 declared itself a “near-Arctic” power — investing in Russian projects could smooth the way for its goal to expand its Arctic role, increase access to shipping routes and natural resources and bolster its geopolitical clout.

So far, China’s ambitions have been thwarted by Moscow, whose coastline accounts for 53% of the Arctic Ocean coastline and which is protective of its dominant role in the polar region. Faced with economic isolation over its invasion, however, Russia’s days of resisting may be coming to an end.

“We are watching to see if Moscow is so desperate that they are willing to meet Chinese demands and terms,” Pincus said.

NSC’s Kirby dismissed concerns of an increasing strategic alliance between Moscow and Beijing, saying that the cooperation between the two in the Arctic has been largely “economic and scientific.”

He added that the administration is not aiming to curb Russia’s power in its own territory. “We want to see a free and open prosperous Arctic region that all nations that border the Arctic can benefit from.”

Eight countries border the Arctic: the U.S., Russia, Canada, Denmark (via Greenland), Iceland, Norway, Sweden and Finland. They all belong to the Arctic Council, a cooperation forum to address common challenges such as climate change, shipping routes and Indigenous people’s rights.

The council suspended activities with Moscow shortly after its invasion of Ukraine. Morten Høglund, chair of the Senior Arctic Officials, told VOA that the group reached consensus in August that they wish to restart working groups, the first step in resumption of cooperation.