Putin and Xi Unveil Ambitious Plans for Arctic Shipping Hubs

Russia and China are ramping up their collaboration in Arctic shipping and energy initiatives,as President Putin recently shared during a meeting with chinese leader Xi in Moscow. He noted, “We’ve made notable strides in utilizing the Northern Sea Route for commercial purposes.”

Since the onset of the Ukraine conflict, trade between Russia and China has surged along this route, with an impressive 95% of cargo traffic last year being linked to thes two nations. Putin remarked on the increasing volume of goods and passengers moving across their borders, highlighting that several crossing points have transitioned to round-the-clock operations. New logistics hubs are also popping up to support this growth.

For over twenty years, developing Arctic logistics has been a passion project for Putin. He’s frequently enough seen at events marking the launch of new nuclear icebreakers or inaugurating military bases in polar regions alongside oil and gas ventures. “I will personally oversee all facets of our partnership with China,” he emphasized regarding its significance as an Arctic ally.

The bilateral trade has skyrocketed since 2020; by 2024, it reached a staggering USD 245 billion—making China Russia’s top trading partner. The establishment of a banking network dubbed the “China Track” has played a crucial role in circumventing western sanctions.

A significant portion of this trade involves crude oil and liquefied natural gas (LNG) transported through Arctic routes. Putin pointed out that LNG shipments from Russia to China are on the rise; however,recent developments show that exports have hit a snag due to Western sanctions impacting projects like Arctic LNG 2.

Chinese buyers have been cautious about purchasing sanctioned Russian LNG openly due to potential repercussions from U.S. regulations. Attempts by Russia to create an option fleet for transporting LNG without attracting scrutiny from sanction authorities haven’t yielded results yet—no shipments from Arctic LNG 2 have occurred since its launch in August 2024.

During discussions held at ministerial levels in Moscow, both sides explored ways to navigate these challenges while enhancing Chinese participation in Russian LNG projects. Energy Minister Sergei Tsivilev confirmed ongoing talks about potential involvement from Chinese firms in new Russian LNG initiatives during his remarks at the summit.while there are hurdles ahead due to geopolitical tensions and sanctions affecting energy exports,both nations remain committed to deepening their ties within this critical sector—a relationship that’s likely only going to grow more complex as they navigate international waters together.