Russia is again sending oil through the Arctic to speed up shipments to China Ship’s crew

(Bloomberg) –

Russia is sending a rare cargo of crude oil to China through the Arctic Sea, a move that will raise environmental concerns even if it lowers the cost of delivering the country’s oil.

The Aframax class tanker Primorsky Prospekt is heading north along the Norwegian coast, pointing to Rizhao in China, where it is scheduled to arrive on August 12. It’s one of a few chain estates on the route.

European Union sanctions have forced Russia to seek new markets for its crude oil. These are mainly located in China and India, adding thousands of miles to delivery times and making freight costs more expensive.

While this might make the shorter Arctic route attractive, there has long been opposition to using the sea for merchant shipping. Organizations including the United Nations intergovernmental panel on climate change have said this could have negative consequences for the region, including higher emissions and threats to marine ecosystems.

Using the so-called Northern Sea Route (NSR) through the arctic waters off Russia’s northern coast could reduce voyage times by up to two weeks, or around 30%, compared to the southern route through the Mediterranean Sea and the Suez Canal.

The ship, built in 2010 and owned by Russia’s Sovcomflot, loaded about 730,000 barrels of Ural crude oil at the Baltic Sea port of Ust-Luga on July 11-12, according to vessel tracking data monitored by Bloomberg.

Eastern shipping along Russia’s Northern Sea Route was suspended for the winter on November 30.

An earlier shipment was sent last year just before the route became impassable. At least two tankers passed through in 2019.

Rosatom, operator of the NSR, and Russian oil producers are considering a possible diversion of crude oil shipments from Baltic ports through the Arctic.

Meanwhile, Novatek, which operates LNG projects on Russia’s Arctic coast, plans to start year-round eastern shipping via the North Sea Route in early 2024.

–With support from Sherry Su.

© 2023 Bloomberg LP

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