The consequences of European sanctions in Moscow's rush to the Arctic and renewed Sino-Russian cooperation in the polar regions.
The interest of major global powers, namely the US, China and Russia, as well as other international actors such as Canada, Denmark, Norway and India, in the Arctic has increased significantly in recent years. The melting of glaciers due to the rapid rise in global temperatures is transforming the physiognomy of the Arctic region, opening up the possibility of creating new trade routes and exploiting the enormous resources (mostly LNG reserves) found underground.
Russia, both for geographical reasons - it is the state with the largest population and with the longest coastline in the Arctic- and for strategic and economic reasons, as it has the most abundant oil and gas reserves, has always paid special attention to this region since the beginning of the Cold War. Recently, it has increased its presence in the area through a significant militarisation of the coastline by building new military infrastructures and strengthening its Northern Fleet based in Severomorsk alongside a series of investments intended to finance new drilling and the construction of new pipelines to exploit the gas oil resources in the North Pole.
However, Moscow’s ability to maintain effective control in the Arctic regions has been severely tested over the past year due to massive sanctions imposed by Brussels and the US following the invasion of Ukraine in February 2022. In particular, the US and EU sanctioned the transfer of technology and equipment to Russia for drilling below 150 to 152 meters and also the exploration of the Arctic shelf shale oil reserves, causing the suspension of cooperation between major European energy companies with Moscow. Without the economic and financial support of European countries and foreign energy companies, Russia has had to scale back its Arctic aspirations and diversify its trading partners, turning especially to China, which became the main importer of crude oil from Russia after the closure of European markets.
In this context, Beijing represents an essential ally for Putin in economic terms given China’s growing interest in the Arctic. Indeed, in 2018, China issued the first white paper on the Arctic with the aim of outlining a strategy with the twofold objective of participating in the cooperative development of Arctic energy on the one hand, and building new communication routes that can avoid the Strait of Malacca on the other.
China’s greatest efforts in economic and strategic terms are directed towards the realization of the Polar Silk Road, an infrastructure and economic development programme with which President Xi Jingping aims to improve the connections between China, Asia and Europe, favoring Chinese trade and exports. Set within the broader context of the Belt and Road Initiative, the Polar Silk Road aims to facilitate connectivity and sustainable economic and social development in the Arctic through investments geared towards the construction of new infrastructure such as ports, railways, roads and terminals, commercial outposts and the technological as well as innovative development of the companies and states involved.
China’s Polar Silk Road, and other elements of the Belt and Road Initiative, Image from “Infrastructural Synergy of the Northern Sea Route in the International Context“
As part of the Polar Silk Road, the Sino-Russian cooperation has already produced significant results in previous years, well evidenced by the successful Yamal Natural Gas Project, an integrated project encompassing oil and gas exploration and development, natural gas processing, liquefaction, marketing and shipping, which have greatly alleviated China's need of energetic resources by producing almost 16.5 million tons of LNG per year. This significant project, of which Beijing is the second largest partner as the China National Petroleum Corporation has a 20% share of the financing, involves the exploitation of the vast South Tambey gas field, the construction of a LNG production plant, new infrastructures in Sabetta port, an international airport and the design and building of fifteen new icebreaking LNG tankers.
At the same time, Beijing is contributing through large investments to the resumption of the construction of Arctic LNG 2, a new gas pipeline whose building had been halted due to the sanctions imposed in April by Brussels because of which a number of major energy companies involved in this project, including Total, Exxon Mobil, BP, Shell and Equinor, opted to end their involvement in Russian joint ventures or have taken financial write-offs. Cooperation in the Arctic is not only about supporting infrastructure development and resource extraction. In this regard, it is significant to highlight how Russia and China are seizing the current political tension with European countries to enhance their partnership also in other areas such as scientific research, sharing intelligence, surveillance and reconnaissance data, protecting the environment and habitat of indigenous peoples. In particular, the attention of the two powers is heavily directed on the study of new technologies for the exploitation of the renewable energy sources of which the Arctic is rich. in order to contribute to the process of decarbonising energy sources.
In this scenario, Moscow is trying to take maximum advantage both in economic and strategic terms by attempting to bypass Western sanctions and strengthening the relationships with Beijing. Indeed, thanks to huge Chinese investments, Putin is partly able to provide for the shortage of materials, supplies and funds needed to build new infrastructures such as roads, railways, and gas pipelines and to maintain the current ones. The strategic partnership with China has therefore become an unconditional priority over the past year, as reiterated by Russian Security Council Secretary Nikolay Patrushev, a close Putin ally.
Nevertheless, it is worth considering how the renewed interest in enhancing the partnership between Putin and Xi Jinping could be analyzed as the extemporaneous outcome of the Russian estrangement from the Western sphere that culminated with the beginning of the invasion of Ukraine. As a matter of fact, cooperation between those powers, at least in the Arctic context, cannot be defined as free from the logic of furthering the national interest or as an alliance based on a community of interest, shared values, and mutual esteem. Concerning this, there are some divergences and issues that give rise to quite a few concerns especially for Moscow. This stems from the fact that the interests and approaches in the Arctic of the two States are not exactly aligned, to the extent that neither China and Russia is ready to work under the patronage of the other.
Beijing has already expressed several misgivings, on the one hand, about Russia’s possible economic and financial instability and, on the other, about its ability to maintain transit traffic in the Arctic and to complete projects on schedule. Similarly, Russia has also highligthed some concern about the growing independent position of China on Arctic-related issues. For instance, a contrasting point is Beijing’s willingness to apply the principle of freedom of navigation in the Arctic, insisting that navigation along the Northern Sea Route shouldn’t be regulated by national laws. Moscow on the contrary has been unwilling to accept such a condition, as the Kremlin does not intend to sacrifice such privileges and prerogatives in the Arctic both because it is considered a highly strategic area, which is why Putin claims substantial control, and because, as previously mentioned, there exists within the Russian establishment a certain lack of trust in their Chinese ally, especially in their rhetoric. For example, the Kremlin does not trust the statements on environmental protection and caring for indigenous peoples included in China’s Arctic strategy. In Moscow’s eyes, in fact, the continuing large-scale environmental pollution on mainland China and its tough stance toward ethnic minorities in the Xinjiang-Uyghur Autonomous Region clashes with Beijing’s declarations of intent, raising not a few concerns about the management of growing Chinese interest and involvement in Arctic affairs.
In light of this, it is clear that Putin finds himself in a particularly complex situation in which, on the one hand, he is almost obliged to accept the claims of his colleague Xi Jinping and to ensure greater Chinese involvement in the Arctic in order to achieve the aim of making Russia the leading Arctic power. On the other hand, the Russian President fears that he will not be able to handle the growing Chinese influence and thus lose leadership in the region. Moscow’s real challenge will therefore be to succeed, at least for the duration of Western sanctions, in gaining from China economic, political and strategic support (namely exchange of technology, export of oil and gas) necessary to not suffer excessively NATO and European action. At the same time, however, the Kremlin is also called upon, if it does not want to lose its role as a global and regional (in the Arctic) power, to manage its partnership with China, in order to preserve the geopolitical balance in the Arctic unchanged.