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line graph of shipping volume through the arctic
The Graphic Truth: Shipping volume through the Russian Arctic
Climate change has opened Arctic shipping channels that can be navigated by freighters without icebreakers for several months a year – and year-round with icebreakers. Canada and Russia dominate the region, but Moscow is much more aggressively exploiting the economic opportunities there.
Taking the high-latitude route over Russia can shave 5,600 miles off a voyage from Europe to China, and as sea ice melt accelerates, the economic viability grows. Total shipping volumes along the Arctic route rose steadily between 2019 and 2020, and immediately after Russia invaded Ukraine, despite the frigid March conditions, the Arctic corridor saw its highest-ever volume of shipping in 2022.
Canada and the United States, meanwhile, have faced criticism for underinvestment in Arctic security. Canada, for example, lacks sufficient early warning systems to detect missile attacks coming over the North Pole — which is dangerous, given that the Arctic is essentially split between Russia and NATO countries.
We look at trade passing through the Russian Arctic corridor above.
Russian ship in the arctic
Alarm raised over Russian Arctic oil shipments
Russia has begun using tankers designed for southern waters to ship oil to China through icy Arctic waters off its northern shores, which has worrying environmental and security implications, the Wall Street Journal reports.
Russia moved about a dozen tankers through the passage in the last two months and is beginning to use tankers without so-called ice classification — stronger hulls designed for shipping in icy waters. Because of Western sanctions imposed over its invasion of Ukraine, Moscow is increasing oil exports to China, and the northern route is shorter than the trip through the Suez Canal.
Why is this concerning? Because it appears to herald a new era of Chinese presence in the Arctic – and because a spill in these treacherous northern waters would be disastrous, spreading oil beyond Russian territory.
“I think it’s safe to say that a Russian oil spill in the Arctic would have catastrophic consequences given the fragility and remoteness of the ecosystem, which would hamper containment and clean-up efforts when that oil inevitably spread beyond Russian waters,” says Graeme Thompson, a global macro senior analyst at Eurasia Group.
The closer relationship between Russia and China is opening the door to more Chinese military activity in the Arctic. This has worrying implications, particularly for Canada, which has little capacity to monitor its vast northern waters. Last year, the Canadian military found Chinese monitoring buoys in Canadian waters, but it’s unclear how much activity Canada is able to surveil. A report from the country’s auditor general last year said that Canada has significant gaps in its ability to detect or track ships in the Arctic.
Canada has agreed to spend $4.6 billion over the next decade on upgrades to northern air defenses, but Canada has never spent the kind of money necessary to have a bigger presence in its Arctic waters, meaning this region is its weakest security link.
The thawing of Arctic ice is opening up northern waters to foreign shipping, both civilian and military, which ought to motivate policymakers to wake up to threats from a new frontier. But Canada is not moving to close the gap by boosting its spending to 2% of GDP – the level NATO guidelines recommend for military readiness. In fact, quite the opposite: Ottawa is looking for $1 billion in savings from its current budget.
“I think it’s pretty clear that Canada is largely dependent on the US for defense and surveillance in the far north,” says Thompson. “Although Ottawa is a critical security partner for Washington, its capabilities and capacity – both on the sea and in the air – to contribute to Arctic defense are not what one might expect from a country with such a large territory and coastline north of the Arctic Circle.”
“In some ways, this works fine for both the US and Canada – Washington takes the lead, and Ottawa is happy to let them – although that de facto arrangement could become more fraught as geopolitical competition heats up in the north.”
U.S. President Joe Biden and Canadian PM Justin Trudeau during a bilateral meeting at the North American Leaders' Summit in Mexico City, Mexico, January 10, 2023.
Biden-Trudeau talks focus on immigration and defense
Amid the pomp and pageantry accompanying President Joe Biden’s first official visit to Canada, he and Canadian PM Justin Trudeau are looking to make some deals.
Even before Biden’s arrival late Thursday, news broke that the two countries had reached an agreement on irregular migration flows across the US-Canada border, a sticking point for both governments. An influx of asylum-seekers across the Roxham Road crossing into Quebec has dogged relations, with nearly 40,000 migrants crossing in 2022 alone.
Trudeau has been asking the US to renegotiate the Safe Third Country Agreement, which requires asylum-seekers who cross select border points to be sent back to the country where they first entered. Why? Because it encourages migrants to enter at irregular crossings like Roxham Road, and once they’re in Canada they can legally make asylum claims.
The precise details of the new migration deal are still under wraps, but Canada has reportedly agreed to take in 15,000 migrants from the Western Hemisphere through official channels. The agreement also would reportedly allow both countries to turn away asylum-seekers who cross the border without authorization.
The Biden-Trudeau talks on Friday are also expected to turn to defense. Last month’s Chinese spy balloon fiasco has led to increased pressure on both leaders to ramp up security. North Korean missile tests and Russian advances in missile technology have added more urgency to North American defense.
A new Maru Public/GZERO poll finds that the vast majority of Americans and Canadians (93% and 91%, respectively) want the two countries to boost security efforts, and most Canadians favor either a joint missile-defense system or having US missiles on Canadian soil.
With both Canada and the US being behind on the modernization of the North American Aerospace Defense Command – much of its radar systems are from the 1980s – Friday’s discussions are likely to touch on NORAD investment.
Biden is expected to push Trudeau on military spending – like many NATO members, Canada lags behind its defense spending target of 2% GDP. Canadian NORAD officials complain that current military capabilities are sluggish. Last year, Trudeau’s government pledged $4.9 billion to upgrade NORAD, but Americans are skeptical about the speed at which Canada can deliver.
The war in Ukraine is also putting Arctic defense back on the map. The Maru/GZERO poll showed that majorities in both the US and Canada support a joint military presence in the Arctic. Receding ice in the region has freed up shipping lanes, portending new access to lucrative resources like oil and rare-earth minerals. The region’s security would take on even more geopolitical importance should Finland and Sweden join NATO, possibly making it a new frontline pitting Russia against the West.
There's no shortage of thorny issues for Biden and Trudeau to tackle, from defense and immigration to trade and Ukraine. For more on the presidential visit, be sure to join us on Twitter Friday at 12pm ET. We’ll be talking with Forbes' Diane Brady, Eurasia Group's Gerald Butts, and GZERO's Evan Solomon, breaking down what Biden and Trudeau need to accomplish during their meeting. Set a reminder here.
To stay up to date on crucial US-Canada relations, be sure to subscribe to our new newsletter, GZERO North.
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OVER THE TOP: ARCTIC SHIPPING LANES
Last month, the Venta Maersk (pictured above) became the first international container ship to complete the journey from Asia to Europe through the Arctic Circle. Until now, this journey could be made only via the Indian Ocean and through the Suez Canal, or around the Cape of Good Hope and up Africa's west coast.
But an accelerated melting of the polar ice cap means that a stretch of Arctic waters known as the Northern Sea Route (NSR) has now become navigable for several months a year. The NSR has a lot going for it: the trip is 30-50 percent shorter than the traditional routes between Asia and Europe, and it has 100 percent fewer pirates.
The Venta, loaded with electronics and frozen food, left South Korea in August, made a stop in Vladivostok, sailed through the Bering Strait between Alaska and Russia, moved along Russia's north coast, and with the help of a nuclear icebreaker, passed into the Norwegian Sea. It docked in St. Petersburg last Friday.
As the ice melts further and the journey becomes more common, the balance of power in global trade could shift substantially. The biggest winner might well be the Kremlin. A sizable portion of the Northern Sea Route runs through Russia's territorial waters, allowing Moscow to set conditions for passage, grant and deny access, and impose duties along the route. The strategic and economic benefits are obvious.
More broadly, the melting ice cap will make it possible to extract vast quantities of the oil, gas, and minerals thought to lie beneath the Arctic seabed. That will only intensify the competition for territorial claims among Arctic powers—the United States, Russia, Canada, and the Scandinavians. Thus far, Russia has made the biggest claim by arguing that its continental shelf extends deep into the Arctic Circle. And making geopolitical matters more interesting, as we wrote back in April, China will want a piece of the action too.
For now, the need for accompanying icebreakers means costs are high, and the journey remains unpredictable and dangerous. One authoritative study says the route won't be economically viable for significant ship traffic until 2035. (Particularly in the world of long-term investment in transport, that's not as far off as it sounds. We're now closer to 2035 than to 2001.)