The Northern Route
OSLO, Norway—The hits to global shipping just keep coming.
With the Iran-backed Houthi rebels in Yemen still taking shots at commercial vessels in the Red Sea, traffic there is down almost 60 percent from a normal year. And even for those Western ships brave enough to make the trip, the cost of insurance for transiting the Bab el-Mandeb Strait has skyrocketed.
Norway, which has the world’s fifth-largest merchant fleet and largest mutual war risk insurance pool, has seen prices increase 100 times since the Houthi attacks began in October 2023, to about 1 percent of each ship’s value per transit through the Red Sea, said Audun Halvorsen, the director of the emergency department for the Norwegian Shipowners’ Association.
The high price of Middle East transit routes. The surging costs and fear of getting hit by Houthi drones and missiles have led some shippers to consider the Arctic as an alternative, as melting ice begins opening new potential on the so-called Northern Sea Route.
Stretching from the Barents Sea near Russia’s border with Norway all the way to the Bering Strait between Siberia and Alaska, the Northern Sea Route has been eyed by major naval powers as a possible shortcut for sea travel between Europe and Asia for centuries, but the region’s unforgiving frozen climate and extreme remoteness have made such ambitions infeasible.
But today, climate change is occurring four times faster in the Arctic than anywhere else on the planet, and massive levels of ice melt in the region from rising global temperatures have led to wild speculation about the route becoming commercially viable in the near future.
At first blush, going north looks promising. The route is about 8,000 miles between some parts of Europe and Asia, compared with about 13,000 miles for the Suez Canal route. The ability to slash some 5,000 miles off a ship’s journey would mean much faster travel times—a major plus in today’s world of online retail and next-day delivery.
But here in Norway, where the midnight sun will keep it light out all day and all night for the next three months of the year, officials and experts are skeptical that the route will be viable anytime soon.
“Short answer, viability close to zero,” Halvorsen said. “It’s not a realistic alternative in the foreseeable future.”
Treacherous waters. Why the pessimism? It’s a combination of great-power politics and treacherous terrain.
Russian authorities control most of the Northern Sea Route, Halvorsen said—about 70 percent of the Arctic—and ships wanting to use the route must secure the Russians’ permission and pay them transit fees. Given current relations between many Western countries and Russia amid the Ukraine war, that poses an obvious challenge.
The waters close to the shoreline that are safest for navigation are also very shallow, which means shippers would need to cut down their tonnage and use vessels smaller than container ships or go farther out to sea where the weather is much worse.
There’s very little ability to get search and rescue boats into the area. If a vessel like the Ever Given—the 1,300-foot-long container ship that ran aground and snagged traffic in the Suez Canal (and lit social media ablaze) for six days in 2021—got stranded here, there might be no way to get it out. Lucky crews might get helicoptered out. Unlucky crews could risk being polar bear food.
Shippers would also need vessels strong enough to withstand thick polar sea ice to get through, which would raise the price even more. And once the midnight sun goes down in August, the Arctic Circle will be engulfed in 24-hour darkness for the next six months.
Even with melting ice sheets now accounting for more than a quarter of sea level rise, experts said the ice conditions in the Arctic have been more challenging in the past decade, not less.
“Due to the distances, the weather, the darkness, [and the] floating ice, the predictability of moving along this route is so low that it’s not worth the reduced number of days compared to around either Suez or Africa,” Halvorsen added.
Not so limitless. China may be interested in trying to transit the Northern Sea Route anyway, experts said, to show off its growing great-power status. Doing that, however, could test the limits of China and Russia’s self-described “limitless” partnership.
Beijing has even put out its own Arctic strategy centered on extending its military capabilities into the region, developing infrastructure, and participating in governance efforts—some of which have been put on hold since Russia’s full-scale invasion of Ukraine two years ago. But China might be wary of going too far, especially since Russia still sees the region as its strategic backyard.
“If China pushes Russia too hard in the Arctic, I think the Russians would be very skeptical,” said Jo Inge Bekkevold, a senior China fellow at the Norwegian Institute for Defence Studies (IFS) and a former Norwegian diplomat. “The main strategic asset of Russia today is the Northern Fleet in the Arctic. And this is one area where I think they would like to keep China at a certain distance.”
The Center for Strategic and International Studies, a Washington-based think tank, reported last year that Russia has three major bases in the region, 13 airfields, and 10 radar stations. And the Northern Fleet’s submarine base at Gadzhiyevo is only about 125 miles from the Finnish border, which is now NATO turf.
“Russia’s attention for the High North has been standing strong,” said Katarzyna Zysk, a scholar at IFS. “The Northern Fleet is still capable of performing its core missions.”
Baby steps. For now, China is making careful, calculated, and limited moves to expand its influence in the Arctic—with an emphasis on limited. Experts said the only Chinese projects that have gained significant traction in the Arctic so far are gas drilling rigs on the Yamal Peninsula in Russia.
In 2022, not a single Chinese vessel transited the Northern Sea Route, said Henrik Stalhane Hiim, an associate professor at IFS tracking China’s activity in the region. China has a research station at Svalbard, Norway’s northernmost archipelago near the North Pole, but it has been mostly quiet for the past four years since the COVID-19 pandemic. And not a single Chinese navy vessel has ever crossed the Arctic Circle, Hiim said.
But even for China, the biggest issue comes back to economic viability. Most of China’s exports come out of the country’s southern provinces, such as Guangdong, which provide easier access to shipping lanes such as the Suez instead of northern routes. For China, “it’s not shorter to sail. It’s longer,” said Bekkevold of the Northern Sea Route. “Because if you sail from Shanghai through the Indian Ocean, through the Suez, then you end up in Trieste in Italy or Piraeus in Greece, that is shorter than sailing the Northern Sea Route.”
And in the world of shipping, which relies on predictability, one or two days of delay can lead to a big surge in costs.
For now, China has negotiated a hefty insurance discount for Red Sea transits to protect its ships even as the Houthis continue to target Western shippers. But chronic instability in the Middle East will only make Arctic sea lanes, however treacherous, more attractive to the emerging global superpower.