Russian Arctic Oil Exports Rise Nearly 50% Amid Global Trade Disruptions

Russia’s Arctic oil shipments have exceeded last year’s total by nearly 50%, as disruptions around the Suez Canal, the Strait of Hormuz and the Black Sea make the northern passage increasingly attractive, according to traders and data.

About 20 million barrels traveled to Asia through the Northern Sea Route between the opening of navigation in July and mid-October.

That compares with 13 million barrels across the entire previous season.

Traders estimate another 5 million to 10 million barrels could follow before navigation ends, bringing the seasonal total to 25 million to 30 million barrels.

Freight Costs Shift the Calculation

The passage connects Russia’s western ports with Asian buyers through Arctic waters.

Ice hazards and the need for icebreaker support have traditionally made it riskier and more expensive.

Record tanker freight rates have changed that calculation.

Wars in Iran and Ukraine have pushed transport costs higher, narrowing the cost disadvantage of Arctic transit compared with the conventional Red Sea route, traders said.

Those pressures have also made U.S. crude too expensive for Asian refiners, pushing them to seek supplies from the Middle East and Latin America.

Russia controls the Arctic passage. Traders said it offers an alternative to European waters, where tankers carrying Russian oil have repeatedly been detained this year.

Producers Increase Northern Shipments

Gazprom Neft expects to transport about 35% more oil through the route this year than in 2025, chief executive Alexander Dyukov told journalists in Moscow on Friday.

Rosneft’s Vostok Oil project in northern Russia, which opened last month, is also adding cargoes to the passage.

The route carries LNG and other goods alongside crude. LNG volumes are expected to increase this year following the start of Arctic LNG shipments.

Speaking at an economic forum in Vladivostok in September, President Vladimir Putin said Russia expected annual cargo volumes along the passage to reach 70 million metric tons by the end of the decade, twice their current level.