An unlucky move by a 220,000 tonne ship traversing the Suez Canal has been successful where the pandemic has failed: to halt the global economy. How the incident could happen is still matter of open debate, but the reason why the consequences spread quickly is easy to understand: some 90% of world trade relies on the sea and a relevant part of such traffic goes through Suez.

This channel, for whose control there have been even wars in the past, keeps playing a pivotal role in the context of globalization and its importance increased hand in hand with the growth of Chinese exposure in the European market. Because the Suez Canal is the “gateway to Europe” for the goods coming from Asia, China in particular, and a look at the data may make the readers understand why the world leaders are worrying about the incident and are working on a joint and fast solution: about 19,000 ships passed through here in 2019 and the same number throughout 2020, that is a medium of 1.25 tonnes of cargo per year and, overall, 13% of world trade.

In short, this artificial sea-level waterway is both the gateway to Europe and a lung of globalization, and in these days, due to the incident, the Lloyd’s List estimated that the world economy is experiencing a damage of about $400 million per hour, with Egypt alone recording a loss of $12–14 million per day.

The incident has been received with fear in the pandemic-hit European Union, whose economic recovery is a long way off and is now at risk of slowing down further, but some countries have taken the opportunity to highlight the urgency to overcome the increasingly anachronistic “Suez format” by boosting up existing routes, like the North-South Transport Corridor, and by betting on the opening of new ones, like Russia’s long-dreamed-of Northern Sea Route.

The Arctic dreams have never been so real

The Kremlin took advantage of the incident to officially promote the Arctic sea route “as a viable alternative to the Suez Canal”. It’s true that the ice obstacle is still present, but Rosatom rightly pointed out that “we have icebreakers” – a reference to the firm’s Arctic fleet based in Murmansk and composed of five nuclear-powered icebreakers specialized in SAR, four service vessels and a container ship – and reminded the audience that the travel times are in favor of the alternative route because a “trip from Murmansk to Japan on the Northern Sea Route is 5,770 miles and 12,840 miles through the Suez Canal”. Written and explained otherwise: the Northern Sea Route means time reduction.

With the ice melting on a fast pace and the Arctic waters being increasingly open to free navigation, against the background of the glaring limits shown by the Suez Canal, Russia’s plans to ship up to 80–95 millions tons of cargo through the polar route by the mid-2020s may not be so unrealistic – and there is the China factor to be taken into account, namely the New Silk Road.

The meaning of the Arctic route

L'articolo The time has come for a talk about the Arctic route proviene da InsideOver.

Since the end of the Cold War, United States warships have not been seen in the Barents Sea. Now, however, the United States Navy and its ally, the UK Royal Marine, have returned. What was officially called an effort “to assert freedom of navigation and demonstrate seamless integration among allies” was primarily a message for Russia and the Kremlin’s activity in the region, which has increased considerably.

US Warships in the Barents Sea

For the first time in more than three decades, the United States Navy has operated in the Barents Sea which is divided between Norway and Russia. Four ships of the United States Navy, together with a British ship of the Royal Navy, passed through the Barents Sea north of Russia on Monday, the US Navy confirmed. According to the Navy, the operation was conducted to “assert freedom of navigation and demonstrate seamless integration among allies” in the geopolitically significant region.

The Kremlin had been informed in advance, on May 1, of the operation to avoid any confrontation with Russian forces due to any potential misunderstandings.

The operation involved three destroyers with guided missiles, a United States Navy escort, and a British frigate. Among them were the USS Donald Cook, the USS Porter, USS Roosevelt, plus the escort ship USNS Supply, while the Royal Navy had sent the HMS Kent.

Building US Military Readiness in the Arctic

Vice Admiral Lisa Franchetti, commander of the 6th U.S. Fleet, stated that in these challenging times, it was more important than ever that one maintained operations across Europe while taking prudent measures to protect the health and security of one’s armed forces. Moreover, the United States and its allies would continue to promote regional security and stability, while building trust and strengthening the foundations for readiness in the Arctic region, Franchetti added.

In recent years, territorial disputes over parts of the Arctic have mounted, primarily due to deposits of raw materials such as gas, which lie below the ice cap melting as a result of climate change. The latter could result in permanent north-west and north-east passage opening from Asia to America and Europe, which could significantly shorten the transport route. In addition, Russia, which has always claimed parts of the Arctic, seeks to charge service fees for any potential opening and has thus been attempting to establish a strong military presence in recent years, to which neighboring countries, some of these are NATO states, have communicated concerns.

Kremlin vs. Washington

Due to the geopolitical relevance in the region, the Kremlin has also significantly increased its activities in the Arctic. As part of the Russian quest for the Arctic, abandoned bases from the Soviet era have been reactivated, while additional bases were built, and existing ones were expanded and modernized. Moreover, Russia has undertaken concerted efforts “to establish a network of air defense and coastal missile systems, early warning radars, rescue centers, and a variety of sensors,” according to a Pentagon report in 2019.

According to the Russian Navy, 3,000 patrol days of Russian submarines were reached in the region by 2016, which is identical to the number of patrol days during the Cold War. In turn, NATO and particularly the United States have been reestablishing its presence in the region also, which has observers believing that a new Cold War is in the making, if not already underway.

Since then, Russian activity and posturing have increased drastically. United States Secretary of Defense Mark Esper said on Monday at a Brookings Institute video conference that Russia had recently put US air defense operations in the Arctic and Alaska to the test several times. One example is an incident on March 10, when two Russian military planes came close to the Alaska coast but did not enter US airspace.

L'articolo US Navy Operates in Russia’s Barents Sea proviene da InsideOver.

Nations are eyeing the Arctic, formerly an undeveloped area protected by thick layers of ice, snow and bitter temperatures, now that climate change is nipping away at nature’s obstacles.

It has spawned what amounts to a new cold war as countries race to plunder a treasure trove of oil and minerals. Environmentalists fear it will destroy the fragile Arctic ecosystem. Because they take a long time to grow and/or reproduce, any activity that disrupts plant, bird, animal and fish life is damaging.

Since the Arctic is warming faster than anywhere on Earth, it is considered an emerging frontier and the pioneer prize is territory rich in fish, oil, gas and minerals.

To see how climate change and rich deposits make the Arctic such an attractive proposition, one need look no further than Canada’s Baffin Island.

The fifth-largest island in the world sits on iron ore, arguably the world’s richest and most abundant source.

On the island is the Mary River mine with enough iron ore to last for generations. It is already being mined and production will increase as infrastructure grows – a material handling system, a crusher and railcars for unloading.

But there are more opportunities than just mineral deposits. The famed Northwest Passage, where ice is melting, will move from history pages to finally become reality as one of the prime shipping routes. It will also be a tourist destination as travellers flock to the Arctic to gaze upon majestic scenery populated with narwhal, walrus, seals, ox, and the Arctic white fox that lives farther north than any other land animal.

There’s fish like the delicious Arctic Char for the anglers. Hunters and naturalists will be drawn by the vast array of animals, including polar bears, reindeer and moose.

So at least eight nations have queued up for battleground Arctic: Canada, Denmark (includes Greenland), Finland, Iceland, Norway, Russia, Sweden and the United States. All are members of the Arctic Council. The council is supposed to foster co-operation, co-ordination and interaction among members, but that is the ideal, not reality. So rich is the prize that even China has elbowed into the fray, calling itself a near-Arctic state that wants to create a ‘Polar Silk Road.’

And Russia upped the ante in this high-stakes game by putting its first floating nuclear power plant in operation Dec. 19, 2019. Built at a cost of $US232 million and 10 years in construction, the Akademik Lomonosov sits off the tundra along the Arctic coast to northeastern Siberia.

Environmentalists warn it is a potential “nuclear Titanic” with fuel stored onboard and a leak could seriously impact the fragile Arctic.

The United States, which experts suggest has lagged in Arctic development, is now primed to go.

The subject of climate change has had no place in the official political American vocabulary since Donald Trump became president. But that does not mean Americans want to mine the Arctic for its riches.

Trump has tried to reverse Barack Obama’s policy to allow oil drilling in the Arctic but so far has been stymied by the courts and fierce opposition.

Still, after decades of basically who cares, the aggressive interest and oil and gas investments in the Arctic by America’s traditional rivals – Russia and China – has caught the attention of the White House.

In May, Secretary of State Mike Pompeo signalled the new interest speaking at an Arctic Council meeting.

“This is America’s moment to stand up as an Arctic nation and for the Arctic’s future,” he said. “Because far from the barren backcountry that many thought it to be…the Arctic is at the forefront of opportunity and abundance.”

Many, such as scientists and native peoples, fear ice melts and the rapid changes in the Arctic. But for Pompeo, the glass is half full.

The reduction in ice makes it possible for cargo ships to use the Northwest Passage and he said the sea lanes could become the “21^st Century Suez and Panama Canals.”

Speaking about Russia and China, Pompeo warned both against provocative actions such as military buildup.

“Do we want the Arctic Ocean to transform into a new South China Sea, fraught with militarization and competing territorial claims?” he asked. “Do we want the fragile Arctic environment exposed to the same ecological devastation caused by China’s fishing fleet in the seas off its coast, or unregulated industrial activity in its own country? I think the answers are pretty clear.”

The race for the Arctic heated up in August 2007 when two Russian submersibles dove to the bottom of the Arctic Ocean and planted a flag at the North Pole. Then Canadian foreign affairs minister Peter Mackay thought the stunt silly.

“This isn’t the 15^th Century,” he said. “You can’t go around the world and just plant flags and say, ‘We’re claiming this territory.’”

But it could also be considered as the first symbolic shot in the cold war for the Arctic. And it is likely the environment will play second fiddle to the economic boom.

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Sino-Russian axis is expected to reach a new apogee since the two countries would be working on the deepening of their energy cooperation through the joint development of nuclear- and wind-powered projects in the Arctic.

Until recently the resource-rich region was eyed by China exclusively from the point of view of the gas exploitation and of the construction of the so-called Polar Silk Road, but things are quickly changing as shown by the moves of the State Grid Corporation of China (SGCC), that is Beijing’s electric utility company and the world-largest in the electric power industry.

Arctic Wind is the key

Ou Xiaoming, chief representative of SGCC in Russia, declared that the company is very interested in offering its expertise and know-how to Moscow in order to help the country reach the much-aspired goal of diversifying the energy industry and start the emancipation from the fossil fuel dependency – a target that China dreams to achieve as well by the mid-century.

To date, China’s involvement in the Arctic is limited to the financing of Russian-owned liquefied natural gas plants Yamal and Arctic 2, the latter is under construction, from which the Kremlin plans to extract most of the gas that will supply Eurasian markets in the coming years, but the country aims at convincing the Russian partner to open a resource sharing policy.

China aspires to satisfy all of its domestic electricity demand from wind power by 2050s and, to do so, is raising its generation capacity yearly and has started looking at North. The reason is simple: according to Russian-owned company Rosnono, the Arctic and the Far East provide the country with the world-biggest potential for wind power generation, but the sector is scarcely developed and the Ukraine-related sanctions regime affects as well the purchase of Western-made high tech which could prove useful.

Russia’s long-term energy agenda speaks clearly: fossil fuels represent the present, but renewable energy is the future. China is recognized globally as the world leader in wind power generation and, to date, is Russia’s only chance to develop the sector due to the ongoing sanctions.

Xiaoming’s claims that SGCC is already in talks to enter the Arctic are the latest proof that China’s Russian-friendly revolutionary policy is making history and re-making the world order according to Beijing wishes. The agreement that the company and the Kremlin are set to reach soon is likely to take a do ut des-modelled form: Chinese know-how and technology in exchange for percentages of energy.

What is next?

During the 2019 Saint Petersburg International Economic Forum, Russia and China agreed on deepening energy cooperation in every relevant-considered field: from trade to production chain and exploration. The Arctic was at the center of the talks and particularly important was the focus given on the joint development and exploitation of the regional resources.

Xiaoming’s claims show that China thinks that the moment has come to go further to the mere oil and gas trade to try to open new fronts of collaboration in which the country ends to play the junior part as regard to energy. China needs renewables, Russia needs know-how and money, the conditions for a win-win agreement are present.

But when the matter is energy security the risks are beyond the corner. The opening of a resource sharing policy in the medium-term may lead to dangerous misunderstandings and tries of trespassings from both parts, which are already divided by a series of still-unsolved issues. A deepened energy cooperation may be the key for a strong alliance or the cause of a traumatic divorce.

L'articolo China’s Energy Ambitions Set to Shake Up Russian Arctic proviene da InsideOver.

Political experts are worried about the increasingly close partnership between Russia and China, which is resisting international pressures and internal issues beyond any forecast. The West could have tried to exploit the existing frictions between the two giants, from Siberia to other geopolitical battlefields, to undermine the efforts made by Vladimir Putin and Xi Jinping to give rise to a world order alternative and an antagonist to the Western-led one, but it did not.

Russia’s vulnerability and weakness concerning China may have been widely overestimated, since it seems that Putin knows very well what he does. After having opened the Arctic, Siberia and the Far East to Chinese investments and workers, now India’s moment has come.

Russian president is offering New Delhi the same opportunities which were made available to Beijing, that is to have access to Siberia’s natural resources, to acquire thousands of square kilometres of uncultivated lands in Eastern Russia, to have the chance of an Arctic’s slice, and more cooperation on trade, energy, security, technology.

The Latest Announcements

New Delhi’s prime minister Narendra Modi was undoubtedly the main protagonist of the latest Eastern Economic Forum, which takes place annually in Vladivostok. The EEF is a government-sponsored initiative which started in 2015 to attract international business in the investment-hungry Russian Far East.

This year the forum was monopolized by India’s outstanding promises and declarations: the opening of a $1 billion line credit for the development of the Far East, the building of the long-discussed Vladivostok-Chennai sea route to halve the time it takes for goods to be shipped from the current period of 40 days to 24 days, the possible introduction of payments in national currencies to boost bilateral trade and de-dollarize the respective economies, and the signing of 15 agreements worth $5 billion to enhance cooperation on energy, mining, wood industry, healthcare, education, and many other sectors with the medium-term goal of tripling bilateral trade by 2025.

The building of Vladivostok-Chennai maritime route must be read in a context much wider than the mere bilateral trade because it intersects the Belt and Road Initiative, New Delhi’s Indo-Pacific project, Japan’s national interests, and is going to go through the disputed South China Sea. By developing this channel, the two countries are sending a clear message to China and they are also offering Japan to play a part in the coming Euriasan order.

It is no coincidence that the Indo-Russian approachment is taking place in the background of Moscow-Tokyo talks to solve the Kuril islands issue. The three countries are led by different views on several international dossiers, but they all agree on one issue: China must not be allowed to rule over Eurasia, which must be multipolar.

India’s Arctic Dreams

In the same week of the EEF, Vladivostok hosted the Russia-India summit. Modi and Putin had the chance to talk about more issues and the Arctic was one of them. Indeed, with the announcement of the likely-coming opening of Vladivostok-Chennai sea route, India was implicitly welcomed in Russian-ruled Northern Asia and have the chance to leave a footprint in the Arctic.

India entered the Arctic Council as an observer member in 2013 and is showing growing willingness to play a more significant role in the polar region utilizing investments in Russian energy-related projects. During the bilateral summit, Indian firms H-Energy and Petronet signed some memorandums of understanding with Russian-owned Novatek, which is actively involved in the exploitation of Arctic’s natural gas and recently built the Yamal LNG plant.

According to the MoUs, Indian firms are expected to invest in Novatek’s future LNG projects and to establish joint ventures. But H-Energy and Petronet are not alone, because another Indian energy firm is looking at the Arctic: the gas company Gail. The entity recently started talks with Novatek to acquire a minority stake in the Arctic LNG-2 plant.

The Potential Outcomes

To date, Russia and India were mostly tied by agreements on security issues and military cooperation, but what was decided at the EEF is ground-breaking since it may open new potentially-revolutionary developments in Eurasia. India is one of the world’s largest and fastest-growing economies and is currently basing its economic growth on the import of foreign-originated energy, such as oil and gas, mainly from Middle Eastern countries.

But the recent Iranian crisis has made India much more aware about the need of diversifying the suppliers to not experience energy-related issues which may harm both the economic growth and the energy security; Russia was seen as the answer to India’s problem.

Furthermore, this may be the right occasion for India to counter-balance China’s growing influence over the continent employing strategically-thought investments in regions and fields in which Beijing is already present and is expected to be more aggressive in the next future; and Russia is one of these regions.

By opening the Far East and the Arctic to India, Putin is playing the same game. Chinese investments within the sanctioned and money-lacking country were useful and helpful, but allowing them to grow further may be dangerous for national security and the Kremlin’s China-watchers are aware of this.

And yet, there is one important element: India and Russia share a long history of high-quality relations and common visions on many international dossiers, contrarily to China with which the cooperation was started only recently and because of world-level events that made it mandatory to establish a survival-oriented partnership.

This is Russia’s chance to deepen the already-good relations with India to improve the country’s position in the continent and make Putin’s Eurasian dream closer than ever, to counter-balance China’s influence in Eastern Asia and within Russia itself, and to weaken the power of American lobby within India in favour of the Russian one. The latest is as important as the China game, because an India that is more Russian-friendly would be a great hit against Eurasia’s American grand strategy.

L'articolo The Bear, the Dragon and the Elephant: Putin’s Vision for Eurasia proviene da InsideOver.