The REAL Northwest Passage - no longer mythical!

Investment Analysis Clubs Macro Economic Trends and Risks
1

Before the surface of Earth was mapped, European traders longed for a Northwest Passage which would enable sea trade with east Asia without the long, dangerous voyage around Africa. Unfortunately, the Northwest Passage was mythical and didn’t exist. Men died in the Arctic trying to find it.

Today’s choke-points in the Red Sea and Strait of Hormuz makes a Northwest Passage even more attractive.

Now, due to climate change, arctic sea ice is melting in summer. The Northwest Passage has appeared for real.

https://www.wsj.com/world/china-is-opening-the-first-regular-cargo-route-through-the-arctic-445245bc?mod=hp_lead_pos9

China Is Opening the First Regular Cargo Route Through the Arctic

Sending containerships through northern passage now makes financial sense because of high oil prices and climate change

By Sune Engel Rasmussen in London and Stu Woo in Singapore, Aug. 14, 2026

China Is Opening the First Regular Cargo Route Through the Arctic

Sending containerships through northern passage now makes financial sense because of high oil prices and climate change

By Sune Engel Rasmussen in London and Stu Woo in Singapore, The Wall Street Journal, Aug. 14, 2026

image
image1062×793 125 KB

…
A Chinese company on Saturday is starting the first regular cargo service to Europe through Arctic waters, seeking to reap the benefits of quicker travel time and less fuel use.

The shipper Sea Legend will dispatch the Dubai Tower from Ningbo, China, to Felixstowe in the U.K. on what it calls the Arctic Express, following a route along Russia’s north coast. The voyage by the vessel, which is capable of carrying 1,740 20-foot containers, is the biggest commercial step in the Arctic since a Maersk containership first completed the route in 2018.

Global warming is a big factor behind the new route, but it is not the only one. Nearly half the Arctic region’s summer ice—an area four times the size of Texas—has melted over five decades, clearing a fairly reliable path in the summer months. Meanwhile, high oil prices and attacks by Houthi rebels in the Red Sea have made the traditional routes costlier and more dangerous…

Beyond that, Beijing has ambitions to play a role in the Arctic’s future, lending a geopolitical dimension to the Chinese company’s shipping route…

Saving fuel by shortening the journey doesn’t automatically make a route profitable. Insurance premiums for the Arctic are 40% higher than the Cape of Good Hope route…

at current oil prices of around $90, the cost of shipping liquid bulk such as liquefied natural gas could drop roughly 33% compared with the Cape of Good Hope route, while dry bulk goods such as cereals would cost about 8% less. …

Western companies that want to follow in Sea Legend’s path have to navigate treacherous politics. Russia claims sovereignty over the entire Northern Sea Route and permits for ship traffic are issued by its state-controlled nuclear operator, Rosatom…

An alternative Arctic route, the Northwest Passage that connects the Atlantic and Pacific oceans via the Canadian Arctic, is less passable because it is dominated by narrow waterways where ice gets bunched up…

Any polar venture contributes to China’s quest to master Arctic travel. The country also has three icebreakers and a support vessel currently on a months-long scientific expedition north of Greenland. Scientific and commercial voyages can yield data about natural resources awaiting below melting ice caps and information for positioning nuclear-armed submarines. [end quote]

There’s a lot more to this story than the price of natural gas.

China doesn’t have a border on the Arctic Ocean but they claim to be “near arctic” (which is nonsense since China is closer to the equator than the arctic). China has a friendship pact with Russia and a yen (or should I say “yuan”) to become THE dominant world superpower of the 21st century.

Anyone with a map can see that nuclear submarines armed with hypersonic missiles within a whisper of Alaska and Canada and minutes from the continental U.S. can hide in the parts of the Arctic Ocean which will be free of sea ice in the summer.

The trade aspects are Macroeconomic. But the real aspects are geopolitical and can impact U.S. superpower status. NATO and NORAD are updating their Arctic defense posture in response. Lots of details available from Gemini.

image
image1005×760 174 KB

History is being made in real time.
Wendy

7 Likes
2

History has always been made in real time. You can’t can it for later consumption. :clown_face:

The Captain

3

I knew you would pick up on that! LOL!

And…how about the historian Francis Fukuyama when he published “The End of History and the Last Man” in 1992? Looks like history has lots of surprises for us in the future.

Wendy

1 Like
4

The largest vessels operating today carry 24,000 containers, and they have ships on the drawing board even larger because ‘big’ is more efficient. A 24,000 teu vessel would have about half the “operating cost per container” of a 2,000 teu vessel.

It’s interesting that a Northwest Passage is opening up, but I wonder about the weather. They send very few container ships around the Cape of Horn because of the problematic weather.

intercst

2 Likes
5

:winking_face_with_tongue:

Absolutely! I never bothered to read The End of History and had no idea who or what the author was. From the little bit I just read it seems Fukuyama thinks that humans are rational. No wonder his theory is wrong. The best theory I have come across is the Science of Complexity which posits that complex systems generate “emergent properties” that are not predictable. The most powerful human trait is self indulgence which can lead to good or bad. Did Fukuyama foresee America going from can-do meritocracy to victimhood as the ideal state?

If Elon Musk has his way the Northwest passage will be redundant, we’ll just rocket stuff to anywhere on Earth.

The Captain

2 Likes
6

I suspect that the cost of energy would probably have to drop significantly before this could happen. Cost of opposing gravity is WAY higher than the cost of using friction (or rotational kinetic energy, etc).

3 Likes
7

Very true, especially since they’re talking about bulk cargo to Europe. “Rocket stuff to anywhere” may replace (long distance) air freight someday.

DB2

8

Submarines don’t care about the weather. I think the Chinese are using the surface shipping to establish their right to use the water…but their real long-term interest is national security.

Wendy

5 Likes
9

That is the whole point! Unlikely? Probably but SpaceX sure is trying.

The Captain

10

LNG will remain its foundation, while crude traffic and Rosneft’s vast Vostok Oil project could provide far greater scale. For Russia, the prize is a shorter route to Asian customers that avoids foreign-controlled chokepoints and increases Moscow’s command over export infrastructure. However, the route’s seasonal availability and persistent fleet shortages remain major constraints on its reliability and expansion.

The NSR follows Russia’s Arctic coast from the Kara Strait area to the Bering Strait and extends about 5,600 km. It lies solely within Russian jurisdiction and is managed through the country’s navigation rules, icebreakers and ports, without any dependence on external canal authorities.

Arctic LNG 2 represents the next major stage of Russia’s Arctic LNG trade. The Gydan Peninsula project was designed to produce 19.8 million tonnes/year across three floating trains, two of which have been completed. Output remains below capacity because of US sanctions and a shortage of dedicated tankers, with a gradual start to China-bound exports to China last year.

DB2

2 Likes
11

To support the northern sea routes, Russia continues to build its nuclear powered icebreaker ships.

They are pressurised water reactors with the steam generators built into the core reactor vessel, which USC Baltic Shipyard says means that “unlike traditional designs with external steam generators, reduces the risk of coolant leaks, reduces the size and weight of the reactor, and simplifies installation and dismantling”.

The reactors have a service life of 40 years, with seven years between refuelling. They have a thermal capacity of 175 MW, which converts to 30 MW at the propellers, and are designed to withstand 45-degree rolls (sideways tilting while at sea).

There are currently a series of Project 22220 nuclear-powered icebreakers operating - the Arktika, Sibir, Ural, the Yakutia, plus the Chukotka, which has been undergoing mooring tests - and two under construction, the Leningrad and the Stalingrad at the Baltic Shipyard.

~ ~ ~ ~ ~ ~ ~ ~

It is interesting the two newest ships are called the Leningrad and the Stalingrad. The city of Leningrad changed its name back to Saint Petersburg in 1991. Stalingrad became Volgograd in 1961. Perhaps there is some cheerful nostalgia for the old USSR?

_ Pete

5 Likes