The tracks of the traffic on Russia’s marine highway/Norway’s Centre for High North Logistics

None of the rewards

Russian President Vladimir Putin, the wannabe King of the Arctic, is falling short on his vision of turning his country’s Northern Sea Route into a legitimate alternative to the Suez Canal, but Alaskans should be concerned nonetheless.

Sputnik news reports Russia set a new shipping record last year when it hauled 38 million tonnes (Mt) of liquified natural gas, oil and other cargo along its eastward, marine route to the Bering Strait and then south into the Bering Sea.

As Multe Humpert noted at qCapitan, a shipping trade website, this volume fell well short of Russia’s “repeatedly announced lofty goals of reaching 80 Mt by 2024, 190 Mt by 2030 and as high as 270 Mt by 2035.”

But Northern Sea Route traffic is inching up, not down, and this comes at a time when the weather patterns over the sea that separates Alaska from Russia appear to be changing.

“The passage of extratropical cyclone Merbok through the Bering Sea in September 2022 exemplified the consequences of very high and phenomenal sea states in the Bering Sea, and
their impacts on coastal communities when storms hit during ice-free periods,” National Weather Service scientists observed in an analysis of the Beri ng Sea’s changing weather published in December. They went on to add that “our results show (such storms) are become more prevalent.”

Merbok powered into the Bering Sea from the southeast and proceeded to pound Alaska’s northwest coast. It offered a troubling warning of where a ship disabled at sea while transmitting the Bering might end up.

“Merbok caused sea state conditions over the shelf that were unprecedented for both the season and the location in the context of the climatology,” NWS scientists later wrote “aatellite radar altimeter observations revealed record-high, sea-wave heights of 15.3 meters (a little more than 50 feet) over the shelf where the ocean depth is 100 meters.”

“Merbok led to widespread coastal inundation, flooding, and damage to property and infrastructure. This demonstrated the threat that storms which generate phenomenal sea state can pose, not only to the coastal environment of the Bering Sea but also to the economic health of the region when the protective sea ice is absent. Should a shortening of the sea ice season and reduction in SIE, as reported here, continue into the future, we expect an increased risk of damaging waves to impact activities in the Bering Sea shelf region.”

The dangers ahead

Increasing traffic on the Northern Sea Route has created the potential for things to get even worse in the future.

With Russian Arctic shipping still underway at the end of November and ships steaming east toward the northern entrance to the Bering Strait, the Norwegian Centre for High North Logistics reported the bulk of the season’s cargo had been comprised of crude oil.

It reported that of 34 Russian ships bound for China, 18 were hauling oil. The actual number of tankers involved remains small in number, but it is growing along with trade in general between Russia and China given the latter’s refusal to abide by Western sanctions imposed on Russia after it invaded Ukraine despite growing pressure to do so.

On top of this, the leader of the world’s largest publicly listed oil tanker operation has warned that the United Nations entity that sets maritime rules is ignoring the dangers of a growing “dark fleet” of unregulated vessels.

Lars Barstad, the chief executive officer for Frontline PLC, told the Financial Times that it is “only a question of time” before a major oil spill occurs.  The number of dark fleet vessels has grown to about a fifth of the world’s fleet with Russian-linked owners buying up hundreds of aging sips to circumvent Western sanctions on the country’s oil trade. 

The U.S. did today announce new sanctions on the Russian oil and gas industry hoping to undermine those businesses, but it stopped short of sanctioning Chinese buyers of Russian oil and gas.

“Gazprom Neft and Surgutneftegas – two of Russia’s most significant oil producers and exporters – and their subsidies were among those added to the US Treasury Department’s sanction rolls,” the South China Morning Post reports.

“Also on the blacklist were dozens of opaque traders, including two from Hong Kong, as well as 34 Russia-based oilfield services and 13 Russian energy officials and elites. Gazprom Neft chairman Aleksandr Dyukov was also designated.

“According to a (U.S.) Treasury Department statement, the measures are expected to substantially increase the risk of sanctions linked to every stage of the Russian oil production and distribution chain.”

The intent is to cut off Russia’s oil and gas revenue and undermine its ability to finance the war in Ukraine, but the South China Post noted it is unclear whether the sanctions would change anything.

Barrier or sieve?

Russia is now China’s largest oil supplier and low Russian oil prices have encouraged India, Turkey and Brazil to buy record amounts of Russian.

Sanctions to date don’t appear to have done much. The Centre on Research for Energy and Clean Air in December reported “a 6 percent increase in Russian revenues from crude oil exports despite a 2 percent reduction in export volumes hinting at a rebound in the price of Russian oil. In a similar vein, there was a 9 percent year-on-year increase in revenues from pipeline gas.”

There is nothing Alaska can do to reduce Russian shipping through the Bering Strait and across the Bering Sea, and there is little the U.S. can do to reduce the flow. Further sanctions might actually serve to increase the ship traffic given Russia’s development of China and India as major buyers of its oil, and the Northern Sea Route’s shortening of the distance from Russian Arctic oil terminals to ports in those countries.

As for cross-border cooperation in responding to marine emergencies, Russia joined the U.S., Canada, Denmark, Iceland, Norway and Sweden as a signatory to a 2011 Agreement on Cooperation on Aeronautical and Maritime Search and Rescue in the Arctic, but with the U.S. now supplying Ukraine with long-range missiles to fire into Russia, it’s unclear how cooperative Russia might be in trying to rescue a broken-down oil tanker being pushed toward Alaska by stormy seas.

Alaska, meanwhile, lacks for the resources to deal with such a situation. And the U.S. as a whole  lacks for ice breakers to work in the north, plus a port at which to base ships north of the Aleutian Islands.

Work had been underway to create a deepwater port offshore of Nome, but it has now stalled.

The U.S. Army Corps of Engineers listed the project as “inactive” at the end of October after an earlier solicitation for bids put costs of expansion into deepwater well above the $662.6 million earmarked for the project.

The Corps did not reveal how far over budget the bids were, but did say they exceeded the “statutory limit,” which is set at 25 percent of the funded cost. That would, in this case, have put the bids somewhere over $828 million.

Global Trade magazine in late October described what happened as a major setback for a U.S. base near the Arctic Circle, adding that the project’s future is now uncertain.

“The project had been heralded as a significant step toward bolstering U.S. presence in the Arctic, countering increased Russian and Chinese activity, and enabling military operations closer to the region,” the magazine said.

“The urgency behind the project intensified earlier this month when Russian and Chinese vessels conducted their first joint patrol in the Arctic, passing near Nome….The nearest U.S. maritime base, Dutch Harbor, sits 750 nautical miles south of Nome, a two-day sail.”

A decade ago, when U.S.-Russian relations were better, Alaska Native leaders in the Bering Straits region were pleading with the U.S. government “to work together with the Russian side to plan and prepare.

“There is a lot of attention on the U.S. side,” they said after an Arctic shipping workshop in Nome, “but oil drilling on the Russian side is already happening. Whatever happens on the Russian side will ultimately affect us. It is a transboundary issue, whatever runs into the Bering Strait on the Russian side runs into U.S. waters.

“It is not a question of ‘when’ it (activities/exploration/vessel traffic) is happening,
but it is already happening. So, plans (for preparedness) need to be accelerated.”

Since then, U.S. tracking of Russian and Chinese ships in the region has increased, but little else has happened, and this situation is likely to continue for the simple reason that there is little economic incentive to build a U.S. Arctic port.

Aside from the zinc coming out of the Red Dog Mine, which operates a summer-only port about 270 miles north of Nome during the summer, Northwest Alaska produces nothing. Interest in creating a significant U.S. Arctic port peak when Royal Dutch Shell was suggesting plans for oil in the Chukchi Sea just north of the Bering Strait.

But the company abandoned that idea in 2015 after nine years of work at the cost of $7 billion. Shell cited “high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.”

Exactly what it found after drilling the lone Burger J well to a depth of 6,800 feet in 150 feet of water about 150 miles west of the nation’s northernmost city then known as Barrow has never been fully reported, but the company characterized the results as not as good as it had hoped.

“Normally in an exploration program, you like to drill several wells before you call it quits in a new basin and a new prospect,” Lysle Brinker, a researcher told Professional Mariner Magazine in the wake of Shell’s departure. “But they had to have so many ships and backup and redundant systems, which is extremely expensive. And the window to drill the wells is so short that they decided to call it quits.

“The really high-cost areas, such as the high Arctic, are the first areas where oil companies are cutting back,” he added. “We’re calling for oil to get back up to the $80 to $90 (a barrel) level by the end of this decade, but even at those prices most Arctic prospects are not really economical.”

Since 2015, despite inflation, oil prices have only reached $90 per barrel before falling, and what new oil development there has been in Alaska has focused around Prudhoe Bay with its access to the Trans-Alaska Pipeline System (TAPS) that carries oil to the ice-free port of Valdez in Alaska’s Southcentral underbelly.

A deepwater port in Northwest Alaska now would function only to serve a few cruise ships every summer and the comparatively tiny population one of the nation’s least inhabited regions. There are the fewer than 30,000 people living along the Bering Sea north of the Yukon River.

The strategic value of such a port could, however, be high in a world where the U.S. seems to be increasingly facing off with totalitarian regimes in both Russia and China.

Editor’s note: This is an edited version of the original story. It was updated on Jan. 13, 2025 to reflect an oil shipping expert warning that a major disaster appears only a  matter of time.