The conflict between Israel and Hamas is good for Russia. When the Israeli army began its operation in the Gaza Strip and the Houthis began attacking container ships in the Persian Gulf in retaliation, shipments through the Russian Northeast Passage increased rapidly. No wonder: the route is 30% shorter than the one through the Suez Canal, free of terrorists and Somali pirates (who have something to say in the case of the other alternative route – around Africa).
The ice is melting and Russia, having the largest fleet of icebreakers, is modernizing the ports in Murmansk and Sabetta and is expanding old military bases built during times of the Soviet Union in the north. Experts believe that the Arctic Ocean will probably be ice-free by the 2040 summer season due to climate change. Moscow estimates that 44% of the Arctic shelf is under its control, and the oil and gas reserves there are estimated to be worth around 20 trillion dollars. The Arctic has huge energy reserves of global importance. According to the US Geological Survey, around 30% of the world’s natural gas reserves and 13% oil fields (90 billion barrels) lie beyond the Arctic Circle. However, there are technical and financial problems with their production. The extraction of deposits in difficult polar conditions requires modern technologies and enormous investments, which Russia is still often unable to afford.
And this is where the Chinese friends come to the rescue, for whom the Northeast Passage (NSR) is a plan B for the New Silk Road: the Chinese are financing LNG projects, developing cooperation in the construction of satellites to monitor ice density, participating in the modernization of ports and the construction of transhipment terminals. Examples include the participation of CNPC, the largest Chinese oil and gas trading company, and the Chinese Silk Road Fund in the Yamal LNG project, as well as the announced investment in Arctic LNG 2. In the fall of 2024, the Chinese Coast Guard announced its first patrol in the waters of the Arctic Ocean, and the operation was carried out in cooperation with the Russian Coast Guard. Chinese shipping companies and logistics firms are increasingly operating transits via the NSR; specific liner projects (container shipping) and joint ventures with Russian players (e.g. Rosatom cooperation) emerged in 2023-2024.
Meanwhile, America is letting go of its opportunities in the north, is barely expanding its fleet of icebreakers, no new bases are being built and Donald Trump is on a collision course with Canada, the most important partner when it comes to the alternative northern passage through Canadian waters. Period.
