Energy sanctions against Russia have helped Moscow sail a crude tanker through the Arctic Circle for the second time ever, heading east toward China. This route, known as the 'Arctic Silk Road,' may one day revolutionize how energy is transported from Russia to Asia because it takes half as long as the Suez Canal from Russia's Baltic ports.
The Vasily Dinkov, a specialist ice-breaking tanker, left Murmansk, a city in northwest Russia, off the Barents Sea, according to vessel monitoring data provided by Bloomberg. It was carrying a load of crude oil.
Russia Sends Oil to China Via The Arctic Circle
The ship traveled along Russia's northern coast from October 27 to November 4 before entering the Bering Strait on November 5. This strait connects the Pacific and Arctic Oceans and divides Alaska and Russia.
Trade flows were beginning to move toward the Northern Sea Route even before the crisis in Ukraine and the ensuing sanctions on Moscow. Transit routes across the Arctic will become more significant in relation to China's and Russia's global geopolitics, as predicted in 2017 by Oil Price.
China has boosted the amount of crude oil it imports from Russia, but careful preparation will be required for the marine logistics in response to Europe's prohibition. Deliveries to Asia via the Suez Canal will entail significantly longer trips than previously, increasing vessel demand.
The Northern Sea Route will be of "critical prominence" in the next summer, according to Viktor Katona, the head crude analyst at the oil analytics company Kpler. Every year, more melting makes the area more accessible, increasing its exposure to commercial traffic and the ensuing environmental dangers.
The Northern Sea Route may have access to more crude thanks to the state-owned Russian energy behemoth Rosneft, as per The Strait Times.
Its Vostok Oil project, which comprises of a number of oil fields on a peninsula in far-northern Russia, is expected to produce 500,000 barrels per day by 2024. According to a press release from Rosneft, work is already beginning to build the largest oil trading terminal in Russia at the Sever Bay port, which will guarantee the shipping of oil from the Vostok Oil resources nearby.
Russia Lowers Oil Price Following Western Sanctions
The route raises environmental worries that increasing traffic across the Arctic may increase pollution from tanker smokestacks despite shorter travels reducing emissions. By absorbing more of the sun's energy when the soot darkens the ice's surface, it hastens the warming process.
The remoteness of the Arctic and the absence of local spill response resources would make accidents there more difficult than usual. Russia offered China discounts on its oil after numerous Western nations placed economic sanctions on it as a result of its invasion of Ukraine, and China seized the opportunity.
Per Big News Network, Russia has fewer customers when sanctions were imposed by several Western governments and businesses. So it started giving nations discounts on oil as a response. The nation that has seized the offer the fastest is China. Even before the conflict in the Ukraine, China was one of the biggest consumers of Russian oil. However, as soon as Russia began attacking Ukraine, Beijing's imports of oil from Moscow only grew.
Although China opted not to overtly denounce Russia's attacks on Ukraine due to economic considerations, it has called for an early conclusion to the conflict in an effort to be a friend to both Russia and Ukraine.
China is expected to stay on its current track, according to observers, according to Portal Plus. China has justified its decision to buy oil from Russia by arguing that it must obtain crude oil from wherever it is sold for a low price. Although Russia continued to be China's leading supplier in July for the third consecutive month, China also continued to purchase oil from the Middle East, Angola, and Brazil.
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