Battle for the Arctic: Resources & Commercial Routes

Historically, the Arctic region has been relatively exempt from geopolitical struggle among major world players. Yet, this is set to change as the Arctic has been melting at an alarming rate since the 1980s due to global warming. Environmentally, this development is quite alarming. However, for five Arctic nations (US, Russia, Norway, Canada, and Denmark), the ice melting presents wide economic and military opportunities to extend their prospective influence in this otherwise closed region.

The numbers speak for themselves. According to estimates made by world research institutions, the Arctic region could contain up to 90 billion barrels of oil and 47 trillion cubic meters of natural gas.

This estimate, if true, means the Arctic region contains 30% of the world’s undiscovered natural gas, and 13% of its oil. Further, around $1 trillion in minerals like gold, zinc, nickel and platinum lie in the region.

As said, these reserves of natural resources are expected to become more accessible as climate change accelerates the rate of ice melt. Russia might gain most as the country’s northern frontier entirely borders on the rich ocean. In fact, Moscow has in the last several years stepped up its initiatives at revitalizing old Soviet military camps. Recently, Putin described the Arctic as "the most important region that will provide for the future of Russia." A separate Ministry for Far East and Arctic Development was created.

Russia military moves have brought a military response from other Arctic countries. For example, in 2018, NATO staged ‘Trident Juncture’ drills with some 40,000 troops, which so far is the biggest military exercise in Norway in more than a decade. Moreover, in January 2019, US Navy Secretary Richard Spencer said the Navy is working out a plan to reopen the Adak base in Alaska and send surface ships into the Arctic waters for the first time in the summer.

The militarization of the Arctic is now in full process. As a response, the Russians announced they will be holding large-scale drills this year, dubbed “the Tsentr-2019”. The exercises will be held in the Arctic archipelagos of Novaya Zemlya and New Siberian Islands.

Beyond the necessity to enhance a military posture in the Arctic, the Russians also strive for control of the region because of the so-called ‘Northern Sea Route’ (NSR), which falls into the Russian Exclusive Economic Zone in the ocean.

The commercial route through the Arctic will cut the shipping time from Europe to Asia (primarily China) by some 40% compared to the route – Suez Canal – the Chinese use nowadays. A major economic route near the Russian seashore would give a major boost to Russia’s economy. Quite possibly, by the second half of the 21st century, we might have a situation when the Russians for the first time in their history border water where major world commercial activity unfolds. Even now, well before the ice has substantially retracted, Russia has the superiority of an atomic ice-breaking fleet, which can lay out routes for trade ships. Essentially the control of the Arctic is a struggle for the control of future raw resources and commercial routes. Thus, it is no surprise that Moscow has just announced that foreign ships transiting through would be required to submit a 45-day notice, take a Russian pilot aboard and pay increased transit fees.

The NSR is especially attractive to Beijing. Today, China is Moscow's biggest client for Northern Sea Route shipments: Russia sent liquified natural gas tankers to China via Arctic waters for the first time in July 2018, and lent Russian icebreakers to escort a convoy of Chinese cargo vessels to Europe that fall.

Beijing’s interest in the arctic is also exemplified by the announcement last month that China will build its own nuclear-powered icebreaker.

Overall, the battle over the Arctic is set to increase in the coming years. Climate still is a powerful obstacle but only decades are needed to see the geographic situation changed, constituting the largest geopolitical development in recent centuries.

By Emil Avdaliani

15 April 2019 17:43