Russian oil exports through the Arctic Northern Sea Route have risen nearly 50% this year, reaching 20 million barrels. Disruptions to Middle Eastern shipping are rerouting supplies to Asian buyers, while record tanker rates change how those buyers purchase cargoes.
Russia has shipped 20 million barrels of oil to Asia via the Northern Sea Route from July to mid-October, exceeding last year's total by nearly 50%, Reuters reports. The window covers the period when Arctic sea ice is at its annual minimum.
Traders expect the volume to rise by another 5-10 million barrels by the end of the navigation period. Russia shipped 13 million barrels during the last navigation season.
Why the Arctic route gains ground
The route has become more attractive because of disruptions to passage via the Suez Canal, the Strait of Hormuz and the Black Sea. The US-Israeli war on Iran and disruptions in the straits of Hormuz and Bab al-Mandab are choking off traditional flows from the Persian Gulf.
The Arctic path is 13,947 kilometers, against 20,921 km for the Suez route, but it is also more expensive and dangerous. It can cut travel time to markets like China and India by up to two weeks, and it avoids Western inspections, detentions and port restrictions for Russian exporters and their aging shadow fleet.
Reuters also said Gazprom Neft will increase its NSR shipments by 35% this year compared with 2025. President Putin reportedly told an economic forum in Vladivostok that Russia expects cargo turnover via the NSR to double to 70 million tons annually by 2030.
Record freight rates reshape Asian buying
Meanwhile, tanker freight rates have surged to record highs as supertankers face bottlenecks and delays. Asian buyers of crude oil are increasingly using smaller tankers under long-term charter deals, and the higher rates are also forcing Asian refiners to seek alternatives from the Middle East and Latin America.
China and India remain the largest buyers of Russian crude. Up to 90% of China's seaborne Russian crude has come from Asian-side ports in recent months. India, meanwhile, pivoted its import basket toward non-Hormuz channels and made Russia its top crude supplier.
Source: Oilprice.com
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