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Looking to the future, Western countries are facing a delicate balancing act in the Arctic. They must weigh the need to combat Russia’s geopolitical activities with the importance of maintaining dialogue and cooperation in the unique Arctic region that is critical to the global climate, environment, and economic system.
As global temperatures have risen, ice sheets have begun to melt in the Arctic, playing an important role in trade routes, natural resources, and military presence. Due to its vast, unexplored energy and mineral resources and strategic trade routes, it has received more and more global attention.
Because of this, Russia is developing its Northern Sea Route. This will be the shortest shipping route between western Eurasia and the Asia-Pacific region. Plan to travel through the Arctic and the Far East. In recent years, this route has been extensively upgraded, and investment from India and China is interested in many Arctic energy projects.
Russia gas still in Europe
The core of Russia’s Arctic energy strategy is the national nuclear company Rosatom, which has largely avoided Western sanctions. Rosatom’s role in developing Arctic energy goes beyond its nuclear expertise; it almost completely controls the Northern Sea Route, which is essential for Arctic oil and gas transportation. Rosatom has expanded its scope by directly supporting Arctic energy projects. The recent acquisition of Fesco, one of Russia’s largest shipping companies, enabled Rosatom to accept renminbi payments for energy-related transactions, effectively bypassing Western financial sanctions on U.S. dollar and euro payments.
Rosatom’s relative immunity from sanctions has created a major loophole in the West’s strategy to curb Russia’s Arctic energy production. As Rosatom continues to diversify its activities in the Arctic, it has become an unapproved technology and revenue channel that directly supports Russian energy projects in the region, disrupting the effectiveness of existing sanctions.
As a result of this exemption, British petroleum giant Shell has purchased at least 350,000 tons of Russian natural gas in the past 13 months, which was escorted through the Arctic Circle using sanctioned nuclear icebreakers.
Other Western companies have also purchased exported Russian natural gas with the help of Atomflot. Greenpeace analyzed 30 samples of other Russian liquefied natural gas shipments brought to EU ports during the last ice season and found that three-quarters of them were escorted by sanctioned icebreakers.
Public information about Atomflot’s charges for its icebreaker services. Its parent company Rosatom has a cost calculator on its website on the cost of icebreaker assistance, which shows that it charges about 40 million rubles to accompany a batch of large-scale cargo purchased by Shell.
According to information from the business intelligence company Kpler, these goods are aimed at some European customers, including the French oil multinational TotalEnergies and the Spanish natural gas company Naturgy, which contract millions of tons of natural gas from the Russian Arctic every year.
Changing Arctic strategies
Although Western sanctions are effective, they have not undermined Russia’s Arctic ambitions–they have just changed their course. For Western policymakers, this raises some basic questions: do we need to develop tools other than sanctions to achieve our political goals? Is more pressure always the right strategy, or should we confuse incentives with penalties?
Looking to the future, Western countries are facing a delicate balancing act in the Arctic. They must weigh the need to combat Russia’s geopolitical activities with the importance of maintaining dialogue and cooperation in the unique Arctic region that is critical to the global climate, environment, and economic system.
As we have seen in the past few years, just following the principle of “nothing about Arctic without Russia” to solve the Arctic problem can bring practical benefits to any participant. In this regard, the significance of the Arctic Council, the Barents Sea Council/Europe-Arctic Region, the Arctic Frontiers Conference and other similar Western (or European or Northern) locations was completely exhausted without Russia’s participation.
As climate change continues to bring new opportunities and challenges to the region, the effectiveness of multilateral governance will play a key role in shaping the future of the Arctic. Accordingly, the Eastern (or Asian or Southern) platforms in which Russia participates (for example, the BRICS countries, the International Arctic Forum “Arctic–Dialogue Zone”) have become more and more important.
As mentioned above, other Arctic countries (Canada, Greenland, Iceland, Norway, Sweden, Finland, and the United States) may need to reassess their Arctic strategies, taking into account not only the direct impact of sanctions and other measures, but also the long-term impact of sanctions and other measures on regional stability and security concerns. The challenge will be to find common ground in an increasingly divided geopolitical environment with an uncertain outcome.
Although everyone hopes for the miracle of US and European sanctions, the real magic still happens in the “geopolitical Bermuda Triangle” (Russia, BRICS and the global market). Russia continues to successfully extract oil and natural gas and, as the largest energy supplier, sells them on the global market. Why is it? Because Russia, as the guarantor of international energy security, has always high and stable demand.
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