Russia and China's new Arctic oil route

The Northwest Passage

Last year, it was reported that due to falling levels of ice, a new shipping route from Europe to Asia was being proposed. This 'Northwest Passage' would see ships pass through the Arctic Ocean and around the north of Russia to reach Asia. The Russian oil industry has taken note, and now Russia’s Sovcomflot oil line will undertake a trial shipment of oil making it the first shipment ever to sail the entire Northern Sea Route from northwest Russia to Asia.

The oil company's decision comes as both Russia and China have begun to send freight shipments through the passage with the aid of saving fuel and time, as well as avoiding privacy along the main existing routes from Hormuz through the Straits of Malacca.

The new route, that also allows ships to travel from the Netherlands to South Korea (stopping over in Arkhangel in Russia) cuts the distance for ships by 75 percent meaning transit can take as little as 10 days without having to navigate the pirate-infested waters around Africa. Up until now, the only shipping route available ran to India via the Suez Canal, meaning ships often had to pass through Somali waters, made infamous in recent years from the number of high profile hijackings.

Trial journey

The trail journey through the Northern Passage will begin at the Varandey loading terminal in the Barents Sea, 22km offshore, operated by Lukoil subsidiary Varandey Terminal Co.

China is also planning similar expeditions. As most of the Chinese economy relies on exports and foreign trade, it makes sense that they'd want to take advantage of the new shipping route, especially as it makes trips shorter by 6000km.

A report from the Stockholm International Peace Research Institute (SIPRI) has said that the new route, due to the additional insurance costs on the traditional route via the Suez Canal, could make the Nordic countries "China’s new gateway to Europe".

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