South Korea Tests the Northern Sea Route

A Window Opened by Crisis#

Since late 2023 the two main trade corridors between Asia and Europe have become unpredictable, and it is against this backdrop that South Korean interest in the Arctic route has developed. Houthi attacks have pushed most container traffic between Asia and Europe to circumnavigate the Cape of Good Hope, and the war of the United States and Israel against Iran then effectively suspended shipping through the Strait of Hormuz, compounding the threats already present around Bab-el-Mandeb and the Red Sea. In September, the return toward Suez picked up pace, but it remains partial. HMM, the leading South Korean container line, and its Premier Alliance partners have not yet brought any vessel back to the Red Sea, while the Houthis have seized the Yemeni port of Mokha. The crisis has also made the southern route more expensive to insure: war-risk premiums for Red Sea transits have risen from around 0.1% to between 0.7% and 1% of a ship’s value, adding roughly $1 million per vessel for each round trip.

Moscow has been quick to capitalize on the moment: in March, Transport Minister Andrei Nikitin (once again) described the Northern Sea Route as a viable alternative to Suez and Hormuz. In June, at the Saint Petersburg International Economic Forum, Rosneft president Igor Sechin argued that the route can cut delivery times by a factor of 1.5 to 2 and costs by 20–30%.

Adding to the instability of the southern routes is, finally, the trade clash between Washington and Beijing, in which Seoul has already found itself caught up. In April 2024, the Office of the United States Trade Representative launched an investigation into the policies through which China is allegedly seeking dominance of the world’s maritime, logistics, and shipbuilding sectors. The resulting measures came into force on October 14, 2025. These are fees collected at every US port call: $50 per net tonne for Chinese-owned or Chinese-operated vessels, set to rise to $140 by 2028, and a more modest toll on ships built in China but operated by shipowners from other countries. Beijing responded by introducing similar fees on US-linked vessels. That same October 14, it also sanctioned five US subsidiaries of Hanwha Ocean, one of South Korea’s three largest shipbuilding groups. The companies were accused of having supported the American investigation, and the measure barred any Chinese entity from doing business with them. On the day of the announcement, Hanwha Ocean’s share price fell by more than 8% on the Seoul stock exchange. The episode also exposed a concrete dependency: according to South Korea’s shipbuilding industry association, around 20% of the steel plate used by the country’s three main shipyards comes from China. The truce agreed by Donald Trump and Xi Jinping, quite fittingly right in Busan, on October 30, 2025, suspended both sides’ port fees and the sanctions against Hanwha for one year. All three suspensions expire next November.

The Route in Numbers#

To understand the extent to which the Northern Sea Route can genuinely present itself as an alternative to the southern routes, one must start from its figures, which describe an artery still dominated by Russian exports, in which international transit—that is, traffic crossing it from one end to the other without calling at Arctic ports—occupies a marginal, if growing, space. In 2025 the overall volume of cargo carried along the route fell slightly, to around 37 million tonnes against 38 million in 2024, while transit reached its own record: 103 voyages made by 88 ships, amounting to some 3.2 million tonnes. This is less than a tenth of the total, made up chiefly of tanker cargoes. According to Rosatom director general Alexei Likhachev, however, the sharpest increase was precisely in container transit, the very segment of interest to Seoul. In 2025, container ships made a record 15 transit voyages, up from 11 the previous year.

This year appears to confirm the general trend: by mid-July overall volumes were up 13.7% on the same period the previous year, and Rosatom expects 2026 to close at a record of around 40 million tonnes. The Russian government itself, however, places the container traffic horizon on a longer timescale: the minister for the development of the Far East and the Arctic, Alexei Chekunkov, has stated that the route’s future lies in containers, but over the next ten to twenty years.

China Got There First#

The ship that the PanStar Acro effectively followed to Felixstowe is the Istanbul Bridge, a container vessel operated by the Chinese company Sea Legend, which between September and October 2025 had reached the British port from Ningbo-Zhoushan in around twenty days. She had approximately 4,000 TEUs of cargo on board, nearly five times that of the Korean ship. That first service, christened the China-Europe Arctic Express, had however been discontinued after a single crossing, and it is only this year that Sea Legend has turned it into a proper seasonal line. The first departure from Ningbo-Zhoushan took place on August 15, and for the navigation window, running from July to October, the company has scheduled at least eight voyages, deploying seven to eight vessels suited to Arctic waters.

The other major Chinese operator, NewNew Shipping Line, works instead primarily on links with Russia: since 2024 its Arctic Express No. 1 line has connected Shanghai and Ningbo with Arkhangelsk. On August 19, one of its ships unloaded around 500 containers of car components at Murmansk’s commercial port, implementing an agreement signed in June at the Saint Petersburg Forum with the region, whose port had already set up a dedicated terminal back in 2025. CEO Ke Jin announced that six new 4,800-TEU container ships would enter service by the end of October. The same voyage to Murmansk may not, however, be repeated before 2027, as the company still has to assess its economic viability in a context where cargo and ships are scarce and icebreaker escort remains costly. In both cases, Chinese presence rests on an operational relationship with Russian partners—ports, and Rosatom foremost among them—that is now well established. It is not necessarily a strategic alliance: the relationship between Moscow and Beijing along the route remains pragmatic and situational rather than a long-term commitment. It has nonetheless produced concrete tools, starting with the Russo-Chinese Subcommittee on Cooperation on the Northern Sea Route, established in 2024 and without equivalent in Russia’s relations with any other country. This is precisely what Seoul has yet to build.

In Seoul, the Arctic route is not a mere sectoral project but one of the pillars of the government’s program, and its administrative translation preceded the PanStar Acro’s departure by many months. The experimental voyage had already been announced on December 23, 2025, when the Ministry of Oceans and Fisheries presented its 2026 plan to President Lee Jae-myung. The presentation took place at the ministry’s new Busan headquarters, where it had just relocated and where it had set up a dedicated unit to promote the route. On May 26, the government set the goal of launching a regular link with Europe via the Arctic by 2030, folding it into a broader project that assigns each area of the country’s southeast a specific role: Busan as the hub for maritime business, Ulsan as the energy hub, and South Gyeongsang Province as the manufacturing hub for supply chains. The plan for the second half of the year, presented on July 16, translated this division of labor into logistical terms, designating Busan as the container hub and Ulsan as the hub for energy cargoes.

The 2027 draft budget, approved by the Cabinet on September 1, confirms the political priority attached to the issue. Budget lines dedicated to the coming Arctic era rise to 98.3 billion won (or $72.5 million, or 6.12 billion Russian rubles—ed.), 24.1% up on this year’s 79.2 billion, and include 18.4 billion ($13.5 million, RUB 1.14 billion) in new funding to support experimental voyages, data collection, and the strengthening of international cooperation. This last item, though modest overall, indicates that the government is aware of the strategy’s weak point: the route crosses other countries’ waters, and its profitability depends on partners that Seoul does not control.

Cooperation Put to the Test#

Anyone looking for the ground on which Arctic cooperation between South Korea and Russia has already borne concrete fruit must look to the shipyards rather than the sea lanes, and it is precisely there that its interruption has left the deepest marks. In 2013 Daewoo Shipbuilding & Marine Engineering, today’s Hanwha Ocean, won the Yamal LNG tender for a series of Arc7-class LNG carriers, capable of breaking through ice without an escort, worth a total of around $4.8 billion. Fifteen vessels came out of it, the first of which was the Christophe de Margerie.

With the launch of Arctic LNG 2, on the Gyda Peninsula, the orders multiplied. Daewoo signed for six second-generation Arc7 LNG carriers, three for Russia’s Sovcomflot and three for Japan’s Mitsui O.S.K. Lines, while Samsung Heavy Industries committed to supplying the Russian shipyard Zvezda with hull blocks and equipment for ten LNG carriers and seven icebreaking tankers, worth around $3.5 billion.

After 2022, sanctions turned this web of contracts into a string of disputes. Hanwha canceled the three vessels destined for Sovcomflot, which remained in its ownership, while Zvezda unilaterally terminated its agreements with Samsung and demanded the return of some $800 million in advance payments. On September 3, Hanwha disclosed that Arctic LNG 2 had brought arbitration proceedings against it in Singapore for 1.37 trillion won (or just over $1 billion, or around 85.33 billion Russian rubles), on top of a case already pending over the same ships. In the meantime, on December 24, 2025, Zvezda delivered the Alexei Kosygin to Sovcomflot, the first Arc7 LNG carrier built entirely in Russia, while Korean shipyards have taken their polar capabilities in other directions.

On September 11, Hanwha Ocean began construction at Geoje of a new South Korean research icebreaker which, from 2030, will among other things monitor ice conditions along the route. When it won the contract, the group had already stated its intention to make icebreakers a growth business in cooperation with the United States, and the 2027 budget also funds the construction of two icebreakers or ice-class vessels. Washington, however, has so far looked elsewhere: the eleven Arctic Security Cutters ordered by the US Coast Guard between December 2025 and February 2026 went to Finnish and North American shipyards, within the framework of the ICE Pact linking the United States, Canada, and Finland, and no Korean yard was involved. In short, the expertise Seoul could bring to the Arctic does exist, but the channels through which it once reached Russia have closed for now, and the alternative on which Korean shipyards are betting has yet to materialize in the polar segment.

A Route Built on Relations#

The PanStar Acro’s voyage has shown that the shortest route is not, in itself, the most cost-effective. According to PanStar’s chairman, Kim Hyun-kyum, the rise in fuel prices in the months before departure most likely saw the first voyage close at a loss, all the more so given that the ship sailed well below her capacity. The advantage in distance must also offset costs that simply do not exist on the southern routes: icebreaker escort, specialized crews, permits, and the navigation services provided by the Russian side. These are items largely decided in Moscow, which is why, in the Arctic, the profitability of a route depends on the quality of relations with those who manage it more than on the number of kilometers saved.

But the first step, after all, has already been taken. The voyage was conducted in compliance with Russian regulations, a sign that a channel of cooperation between Seoul and Moscow, however narrow, remains open. And in Korea, some are calling for it to be widened. Choi Subeom, secretary-general of the Korea Arctic Shipping Association, has criticized the government for putting far more effort into avoiding problems with the United States than with Russia, through whose waters the ship sailed. The Seoul Institute of Global Affairs, for its part, urges Seoul to make active use of bilateral channels, starting with the Korea-Russia shipping agreement, and to act as a middle power pursuing a neutral and balanced diplomacy.

The groundwork for what comes next is in place. PanStar is considering up to three voyages next year, concentrated in the summer months and on higher-value goods, and the government continues to fund an experiment it presents as a way of building experience for future expansion. South Korea has the ships, the shipyards, and the cargo to become a major player on the Northern Sea Route; what it lacks is stable cooperation with those who manage it. Should Seoul manage to build it, the Arctic itself could open a new chapter in its relations with Moscow. Otherwise, the route will remain for Korea a political investment rather than a commercial opportunity.