The Arctic is turning into a geopolitical hotspot as new trade routes and natural resources potentials are opening up thanks to the melting ice. The new dynamic is making the region susceptible to become a new hotspot of strategic importance. As early as 2030, the Arctic Ocean could be largely without ice during the summer season, the Arctic Monitoring and Assessment Program of the Arctic Council estimates.
The race for the Arctic intensified last year when a Russian ship left Yamal Peninsula with the first India-bound shipment of LNG to be shipped through the Arctic. At the same time, the White House pulled out of Barack Obama’s environmentally friendly energy policy and opened almost all American offshore territory to oil and gas drilling with projects in the Arctic starting this year. But Russia and the US were not the only players in the region. Finland, Norway, Denmark and Canada all came up with significant infrastructure investment within their respective zones. For the time being, the environmental issues and the rights of the local indigenous populations tame the pace of the development.
As much as 90 billion barrels of oil and 47 trillion cubic meters of natural gas is thought to be located in the Arctic but natural resources are not the only asset of the region. Cruise lines and cargo firms are next in the line to eye the Northwest Passage, which could potentially decrease the distance from East Asia to Western Europe by more than 10,000 kilometres. Under the international law, Arctic states can claim an “exclusive economic zone” in their territorial waters, which are up to 370 kilometres offshore. The areas beyond the economic zones are treated as the world’s oceans.