Shipinfo.net

Thin-hulled oil tanker bound for Bering Sea

As you read this, the Leonid Losa –  a Liberia-registered oil tanker owned by Dubai-based Sun Ship Management and loaded with a million barrels of Russian crude oil – is just off Wrangell Island to the north of the entrance to the Bering Strait.

The ship is what the London-based Financial Times just days ago labeled a “thin-hulled oil tanker.”

“Russia has authorized unreinforced oil tankers to sail through its icy Northern Sea Route for the first time, triggering warnings Moscow is risking a catastrophic Arctic spill as it reroutes sanctions-hit energy exports to Asia,” said the story below.

As American political leaders pat themselves on the back for having stalled oil development in Alaska to “meet the urgency of the climate crisis” and  “protect our lands and waters for generations to come” in the words of President Joe Biden, the Russians are charging ahead not only with Arctic oil development but with the transport of Arctic oil in the most dangerous way.

“Shipping experts,” told the Times, “unreinforced tankers could in theory navigate the Northern Sea Route during September and October, when the ice pack is at its thinnest following the warm summer months. But there remain large risks as ice floes can trap vessels and potentially crush non-reinforced hulls.

“Sigurd Enge, a senior adviser on shipping and Arctic Issues at Bellona environmental group, said the risk was ‘quite extreme . . ..A summer day on the northern route is not necessarily an easy ride.”

What happens to the oil if one of these tankers has an accident is unknown. There is general agreement that trying to clean up the oil in broken ice would be almost impossible.

When cannot be cleaned up, it moves who knows where.

Depending on where a spill happens north of the Bering Strait, the spilled oil could circle around in the Beaufort or North Pole gyres until it weathers away or becomes encapsulated in new ice. Or it could be spit out into the Transpolar Current and pushed east to Greenland or spun out of the Beaufort Gyre to come ashore somewhat along Alaska’s North Slope.

Closer to the Bering Strait or south of it, Woods Hole Oceanographic Institue charts of the region’s currents indicate oil could likely end up on beaches from Cape Nome north to Point Barrow and then east along the shores of the North Slope.

USGS/ Woods Hole Oceanographic Institution, J. Cook.

Do the Russians care?

After a large oil spill in Siberia in 2020, Russia did approve legislation requiring companies operating in the Arctic to be prepared to clean up spills, but what exactly that means is unclear.

As S&P Global Commodity Insights noted in a 2002 assessment of Russian industry behavior, “oil spills are common in Russia.” The report added that all indications are Russian companies are “putting economic gains ahead of environmental concerns.”

The same would appear true of the Russian government.

President Vladimir “Putin only recently acknowledged the risks of rising temperatures late last year in his annual press conference addressing the impact of thawing permafrost on towns in Arctic regions” S&P said. “Despite his remarks, Russia continues to develop vast hydrocarbon resources in and around the Arctic Circle, including the giant Yamal LNG project.

“The role of Arctic projects in Russian oil and gas production has increased over the last decade. Production in the Arctic accounted for 11.8 percent of overall output in 2007, rising to 17.6 percent in 2017, and is projected to grow to 26 percent by 2035, according to the Central Dispatching Unit, the statistical arm of the Russian energy ministry.

“Retreating ice will open oil exports via the Northern Sea Route. In March, Putin approved tax exemptions to stimulate Arctic upstream oil and gas development in a sign Russia remains committed to development there, despite concerns over the environmental impact, Western sanctions, high costs and volatile oil prices.”

Russia way back in 2006 revealed its hopes and plans to become a global “energy superpower.”

Roughly a decade and a half later, the Carnegie Endowment for International Peace was reporting that the country was well on it way to that goal with oil and gas accounting for about “60 percent of Russia’s export revenues and upward of 30 percent of its federal budget.”

Russia’s future

“The motive behind (Russia’s) Arctic ambitions is not difficult to discern,” Carnegie analysts observed. “The revenue from these projects would help sustain several critical priorities: further consolidation of Putin’s hold on political power as the leader who returned Russia from the abyss and restored it to greatness, the accumulation of funds to hedge against future economic or political adversity, and the rebuilding of the military, which had long suffered from neglect and was in need of modernization.”

After a ship ran aground and plugged the Suez Canal in 2021, India New Delhi TV noted that seizing the opportunity to promote the Northern Sea Route.

“President Vladimir Putin has long promoted the (Arctic) passage along the country’s Siberian coast as a rival to the Suez Canal, and Russia seized on the Egyptian route’s traffic jam to play it up again,” the station said.

India, along with China, is now one of the countries ignoring the boycott of Russian oil the West has promoted to try to deprive Putin of the funds to continue the war in Ukraine. Rigzone reported Indian imports of Russian oil peaked at 2.15 million barrels per day in May before slowing as the monsoon season approached and refiners scheduled routine maintainence.

But the country still bought 1.57 million barrels in August, and volumes are expected to pick up again in October.

Most of that crude was flowing south from the Russian port of Novorossiysk on the Black Sea, but Novorossiysk came under attack in August. Ukraine later warned that all Russian Black Sea ports should now consider themselves at risk of attack by drones.

Whether that will happen or not remains to be seen.

Energy Intelligence later reported that crude continuing to flow from Novorossiysk and added that “analysts believe that the West would play a role in keeping Russian crude oil and petroleum products flowing to global markets to avoid shortages and price spikes.”

Such is the complicated world of global markets on a planet that still thirsts for oil and gas despite all of the talk about shifts to renewable energy in the form of solar, wind and hydropower.

The International Energy Agency only this month forecast oil demand will continue to increase through 2030 before peaking, but some major oil producers later expressed the view that the IEA assessment was overly optimistic.

Saudi Arabia’s Amin Nasser, the CEO of Aramco, the world’s largest oil and gas company,  labeled the assessment unrealistic and told the World Petroleum Congress meeting in Calgary, Alberta, Canada that companies considering new oil developments “need to invest. Otherwise in the mid- to long-term we will have another crisis and we will go backward in terms of using more and more coal and other cheap products that are available today.”

Reuters reported those views being echoed by Exxon CEO Darren Woods who warned that “there seems to be wishful thinking that we’re going to flip a switch from where we’re at today to where it will be tomorrow.

“No matter where demand gets to, if we don’t maintain some level of investment industry, you end up running shorter supply which leads to higher prices.”

Russia clearly believes this and is acting on that belief. Construction of the country’s largest oil export terminal has been underway at Vostok on the edge of the Arctic Ocean since last year.

“War and sanctions notwithstanding, Russian state oilmen proceed with the development of the Vostok Oil project.,” The Barents Observer reported in May. “It is to produce more than 100 million tons of oil per year and will be paramount for Putin to reach his much-desired ambitions for Arctic shipping.

“This week, loyal government officials again confirmed to the state leader that everything is proceeding according to plans and that the Northern Sea Route will soon see an unprecedented boost in shipping.

“In an online meeting with Putin and top officials, Minister of the Far East and Arctic Aleksei Chekunkov said that infrastructure along the Arctic route is built for shipping to reach 100 million tons of goods in year 2026 and 200 million tons in 2030.”

More shipping along the Northern Sea Route and through the Bering Sea invariably increases the risks for a shipping accident. If it involves a Russian oil tanker, the U.S. is ill-prepared to clean up and spill, and the worse reality is that the Russians have little incentive to do so.

The prevailing winds in the Bering Sea blow north and east in winter, according to the National Oceanic and Atmospheric Administration (NOAA). That would push any oil toward the U.S. coast,  And though the winds come from all directions in the summer, there is a tendency toward the southwest.

Those winds would push oil toward the open North Pacific with the only land in the way the outer Aleutian Islands or Russia’s remote and rugged Commander Islands home to fewer than 1,000 people. 

It’s hard to imagine the Russians worrying about oil hitting the beaches of there, and a landfall in the Aleutians or anywhere else might be welcomed by the Russians, given that the 49th state is part of a country that is financing the Ukrainians – no matter how justly – in a war in which Russian deaths are reported to be as high as 120,000.