The Race for the Arctic: Geopolitics and Trade Routes

Overview

• Focus on Arctic geopolitics and the competition for resources/trade routes.
• Climate change increasing global awareness and influence in the Arctic.
• Melting ice opening new maritime trade routes between Europe and East Asia.
• Resources in the Arctic: oil, gas, rare earth metals.
• Key players: US, Russia, China (declared near-Arctic state in 2018).
• Despite warming, Northern Sea Route traffic remains limited.

The Arctic Circle

• Boundary: 66° 33' North (Arctic Circle).
• Defined by sun positions during solstices.
• Latitude shifts due to Earth’s axial tilt (~15m/year).
• Total area: 20 million sq km (40% land, 60% water).
• Eight stakeholder countries: Iceland, Norway, Sweden, Finland, Russia, Canada, US, Denmark (via Greenland).
• Major landholdings: Russia (52%), Canada (23%), Denmark (17%).

Climate Change and Ice Melting

• Arctic warming 3-4 times faster than the global average.
• Temperature increase since 1979: 5°F (2.8°C).
• Seasonal ice now comprises up to 70% of Arctic Ocean ice cover.
• Predicted loss of seasonal ice by 2040 or earlier.
• Economic interests grow with accessibility.
• Maritime transport of goods: 80% via sea (~$25 trillion).

Russia’s Strategic Position

• Russia holds 50% of Arctic coastline.
• Major opportunities in maritime transport and resource extraction.
• Estimates in 2008: 13% of global undiscovered oil in the Arctic.
• Russia, China investing in Arctic LNG and energy projects.

Challenges of the Northern Sea Route

• Shallow coastal waters, inadequate infrastructure (lifeboats, equipment).
• Harsh weather conditions and polar darkness impacts navigability.
• Limited rescue capabilities.
• Increased navigation difficulties despite ice melting.
• Low predictability discourages usage despite shorter distance.

Geopolitical Tensions

• Arctic Council’s activity suspended post-Ukraine invasion by Russia.
• Most Arctic Council members are NATO members, excluding Russia.
• Military presence and exercises by NATO in Arctic regions: Nordic Response 2024.
• Russian resource allocation to Ukraine reduces Arctic defenses.

China’s Arctic Interests

• Declared near-Arctic state in 2018, interested in raw materials and trade routes.
• Promotes the Polar Silk Road (part of the Belt and Road Initiative).
• Significant investments in Russian LNG projects.
• Concerns over longer-term environmental impacts and logistics.

Commercial Viability and Future Outlook

• Route remains under-developed and rarely used internationally.
• Major deterrents: political tensions, lack of infrastructure, harsh environment.
• China and Russia both preparing for future opportunities despite current challenges.
• Potential future reshaping of the geopolitical and economic landscape.
• Ongoing developments: R&D in polar tech, military investments.

Summary

• Arctic region is central in global geopolitics due to valuable resources and strategic location.
• Despite warming climate and potential trade routes, practical challenges and geopolitical tensions limit current utilization.
• Future interest poised to grow amidst technological and political developments.