China and Russia expand grip, can Europe fight back?

China and Russia are tightening their grip on Arctic shipping routes, turning the rapidly warming region into a new geopolitical battleground with Europe.

Moscow and Beijing last week have agreed to expand freight traffic along Arctic shipping corridors, increase services between their ports and deepen cooperation on building polar vessels. 

The agreement came after the EU unveiled a new Arctic strategy aimed at countering growing Russian and Chinese influence in the region.

Although the competing moves underscore how the once-remote region is turning into a strategic prize, analysts said that Europe’s ability to challenge the emerging China-Russia partnership remains limited, given Moscow’s control over the main shipping corridor and Beijing’s growing commercial clout.

That’s because Moscow controls the Northern Sea Route, including shipping permits, transit fees and a vast fleet of nuclear icebreakers, while Beijing provides the cargo, vessels and industrial capacity needed to develop the corridor, she added.

Europe, by contrast, has limited icebreaker capacity and Arctic infrastructure, leaving it with little leverage to challenge the partnership despite its position as a major destination market.

A new geopolitical fault line?

The Northern Sea Route offers itself as an increasingly attractive alternative, as Middle East disruptions expose vulnerabilities in established shipping corridors.

Cargo traveling between Asia and Europe through the Northern Sea Route could have its journey shortened to between 18 to 22 days, down approximately 35% from the 28 to 35 day journey through Suez, according to data provided by Fertmax FZCO.

For Moscow, the route offers an opportunity to redirect energy exports toward Asia as Western sanctions constrain its access to European markets, said industry watchers whom CNBC spoke to.

On the other hand, it provides Beijing another trade artery that could reduce reliance on traditional maritime chokepoints.

David Roche, a veteran strategist at Quantum Strategy & Geonomics, said the Arctic’s importance lies less in its potential to transform global shipping than in the deepening economic dependence between Russia and China.

“The significance of the arctic route is for Russian energy shipments to China, which will increase China’s control over Russia in terms of Russia’s dependence on China to sell its energy to compensate for losses of its gas markets in Europe,” Roche highlighted.

The EU has acknowledged the growing challenge, highlighting the region’s strategic value in its strategy, as mentioned by EU foreign policy chief Kaja Kallas last week.