The Run for Arctic Routes is Getting More Intensive

The brave new world of 2020’s provides plenty of long-term challenges, as well as various opportunities. In the past 30 years, areas of Arctic sea ice that were melt are larger than Norway, Sweden and Denmark combined. The reason for that is global warming, which is causing Arctic ice to melt. Melting Arctic ice is expected to speed up sea level rise. All of that makes Arctic open for navigation, turning the Arctic into a commercially viable sea route.

Russia is the current leader in the run for Arctic, as it place a high priority of its far-north territories, which is no surprise, given its geography. As of 2021, Russian arctic fleet consists of multiple nuclear vessels, two of which can be considered heavy. Also, the new Arctic icebreaker “Arktika” has began operations in 2020. Arktika is capable to cross 2.9 meter of arctic ice. It’s expected that four new icebreakers of the same generation will be commissioned by 2030. The new Arktika generation are capable of navigation on both sea and rivers.

Russia, along with other northern powers like Canada ans Sweden, has their own Arctic ice-capable commercial fleet, which are must for actual icebreakers. The extraction of natural gas in the Arctic, combined with the growth of liquefied natural gas market, incentivizes the development of ice-capable liquefied natural gas carriers.

It’s no surprise that other global powers are starting to pay attention to Arctic, too. China, despite their geography, already has their own Arctic Policy, which was created as a set of goals which would help to increase their influence in the region. Currently, Chinese icebreaker fleet is rather small, consisting with only 2 ships. However, China, in close cooperation with Russian companies, already starts to build ice-capable liquefied natural gas carriers. Considering the speed of shipbuilding that China is capable of, the current state of Chinese Arctic fleet shouldn’t give the wrong idea about its future potential.

Seeing the ever-increasing cooperation of China and Russia in the Arctic, the United States has joined the affair as well. As a result, USA have plans to expand their small Arctic fleet with six new icebreakers, and so are their Asian allies, including South Korea and Japan, which are also capable of building icebreakers to try and catch the new opportunity in the market.

The new opportunities of Arctic are coming not only from new trade routes, but from undiscovered natural resources as well. For example, it’s estimated that Arctic might hold about 33% of all currently unknown natural gas reserves, as well as 1/8 of oil reserves). Current crisis may slow down the development projects in the area, but it probably wouldn’t stop it for good, specially since there’s a global shift towards clean energy. Of course, natural gas is still fossil fuel, but it’s much “cleaner” that coal or oil, so the demand is likely to grow in coming years.