Oil import from Russia has made a fortune for all the Oil Marketing Companies in India. Northern Sea Route has suddenly gained its significance in the trade map of the world.
An important session on ‘Prospects for the Development of the Northern Sea Route,’ was held during the 26th annual St Petersburg International Economic Forum (SPIEF) organised in St Petersburg on 14-17 June 2023. The Northern Sea Route starts on the border between the Barents and Kara Seas and ends in the Bering Strait. The route spans nearly 5,600 km from the Kara Strait to Cape Dezhnev and a little more than 14,000 km from Saint Petersburg to Vladivostok. If we compare, it will take more than 23,000 km to travel between the same destinations through the Suez Canal, the world’s busiest shipping route. The 2021 incident at the Suez Canal when container ships paralyzed global supply chains after blocking the canal for days and the political upheavals in Middle East nations, power rivalry in the South China Sea, the pirates in African countries etc have disturbed traditional sea lanes between East Asia and Europe. This is why more and more countries are considering the NSR route as an alternative for shipping their goods.
The harsh weather and the ice cover are the challenges faced by NSR with respect to other sea lanes and necessitate the use of icebreakers, especially in its eastern part where navigation without icebreaker escort is impossible around the year. Icebreakers escort the ship carrying cargo to remote towns, exploring mineral deposits, or transporting minerals, oil, and gas around the region.
Today, India’s oil import from Russia is more than the combined amount bought from Saudi Arabia, Iraq, UAE, and the US. India took 1.96 million barrels a day from Russia in May 2023, 15% more than the high in April 2022. Obviously, now, India requires an ice-breaker. China has three ice breakers, Zhong Shan Da Xue Ji Di is China’s third polar icebreaker after Xuelong and Xuelong-2. The Arctic is of high priority for India and China which sees itself near the Arctic State.
In addition, the Arctic region has untapped resources. The Russian officials mentioned at the summit that 75% of Russia’s combustible gas reserves are located in the Arctic, and the Northern Sea Route is a transport artery that will facilitate goods to be exported from the territories of the Russian Far North.
The Northern Sea Route is Russia’s predominant route to Asian markets, or in other words Russia’s export window towards Asia including India, and a part of global logistics. Russian officials at the Summit talked about year-end trade through NSR with the help of ice-breakers. They assured to improve navigation in the area by commissioning more ice-breakers so that the Northern Sea route may be navigated in the winter.
In the session, the First Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic, Gadzhimagomed Guseynov, presented Russian intentions of improving infrastructure in the Russian Far East and Siberia so that the route may be used throughout the year. It was announced at the summit by Russian government officials that Russia was going to revive the Northern Sea Route Authority, centralise these functions, and adopt the Northern Sea Route Unified Development Strategy.
India needs Ice-Breaker for the operational polar scientific research stations in Antarctica, named Gangothri, Bharati and Maitri, and the one at the Arctic research station, Himadri located at Ny-Ålesund in Spitsbergen, Svalbard, Norway which gained Chairmanship of the Arctic Council in May 2023. Recently, the Russian icebreaker ship Vasily Golovnin sailed to the South Pole from Cape Town, a South African port on January 20, 2023, and returned in April 2023 during which it delivered cargo to two Indian and one Belgian research station on the coast of Antarctica. The ice breaker ship delivered a team of Indian polar explorers, fuel, household, and technical garbage from the Indian Antarctic research stations Bharati and Maitri.
This was the second Antarctic expedition carried out by FESCO, one of the largest private transport and logistics companies in Russia, under a new five-year contract with the National Centre for Polar and Ocean Research (NCPOR) – India’s premier R&D institution responsible for the country’s research activities in the polar and Southern Ocean realms. The ice breaker ship is required due to difficult ice conditions, where the unloading of equipment, etc becomes hard on glaciers. India also hires icebreakers for activities on the Himadri in the Arctic. Thus, for scientific activities and trade ice breakers are required. Russia has dominance in icebreaker manufacturing.
The Arctic region happens to be used for excursions and scientific activities but the growing strategic significance of the Arctic due to the revelation of substantial energy resources turned nuclear icebreakers into a resource strength. The Russian company Rosatomflot has expertise in producing nuclear icebreakers, therefore, Russia has a clear edge in this area. A total of seven nuclear icebreakers are currently in service with Rosatomflot. Russia is the only country in the world with its own icebreaker and is a must for the development of the polar regions surrounding the North Sea Route. This is a cause for concern among Western countries.
In November 2022, Russia launched the icebreaker “Ural” and at the same time declared that it is going to launch its third icebreaker, the ‘Yakutiaʼ and its commissioning is scheduled for late 2024 or early 2025. This vessel will also work to ensure the safe passage of ships along the Northern Sea Route.
Thus, Russia and its trading partner countries like India are increasingly realising that the safety, performance, and sustainability of the Northern Sea Route are strategically necessary. This is a new route for global logistics and a transport corridor of the future. The only challenge is the ice. The forecasting of ice formation and support to break ice for shipping lanes are widely discussed at the Summit.
Russian minister Alexei Chekunkov visited India in March 2023 and discussed with Indian officials the reliable and safe transportation of goods through the Northern Sea route using Indian and Russian ports.
Russia needed to focus on boosting energy exports to so-called “friendly” countries. The energy revenues accounted for 42 percent of Russia’s federal budget in 2022 and Russia claims that its energy industry is sustainable, despite the challenges faced by Western sanctions. India needs a supply of oil, gas, and other energy resources from the Arctic region and logistical support for Arctic research. Sooner or later, India should have icebreaker capability to expand its trade routes.
Disclaimer: The views and opinions expressed by the author do not necessarily reflect the views of the Government of India and Defence Research and Studies
Image Courtesy: The Economist
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