Russian crude oil shipments to China via the Northern Sea Route (NSR) have set a new record this season with approximately 10.7 million barrels shipped so far, surpassing last season’s total of 10.5 million barrels and highlighting the viability of the Arctic as an alternative shipping route for Russian oil to China, according to Risk Intelligence.
As explained by Nanna Østergaard Nøhr, Security Analyst Intern, this increase follows the EU’s ban on Russian crude oil, which has led Moscow to pivot its exports towards Asia, with China becoming the largest importer, accounting for 47% of Russian oil exports. The NSR offers a transit route approximately 30% faster than the Suez Canal while minimizing risks from Houthi attacks in the Red Sea.
Despite the advantages, shipping oil through ice-covered waters poses significant risks, including challenges in managing potential oil spills due to encapsulation in ice, Risk Intelligence explains.
The aging and vulnerable “shadow” tankers used for these shipments add to the risks, particularly concerning insurance coverage and accountability for any spills. Nevertheless, environmental concerns are unlikely to deter China’s imports of Arctic oil, as Beijing relies heavily on Russian energy, and the Arctic holds many of Russia’s major oil and LNG fields, Risk Intelligence explained.
Currently, no international transits have been recorded on the NSR, indicating that its development is primarily a Russo-Chinese affair. This situation raises concerns about the NSR becoming isolated from international oversight, especially as Russia asserts national control over the route.
While Beijing is cautious about deepening its involvement in the Russian Arctic due to potential sanctions from the US and EU, continued economic feasibility is likely to drive further cooperation between Russia and China in the region, with significant implications for Arctic shipping dynamics, Risk Intelligence conlcudes.
