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A scramble for the Arctic – thawing resources

The Arctic is the northern polar region of the Earth with an area of ​​about 21 million square kilometers, including the outskirts of the continents of Eurasia and North America, almost the entire Arctic Ocean with islands, as well as the adjacent parts of the Atlantic and Pacific oceans. Currently, Russia, Canada, the United States, Norway, and Denmark are considered subarctic states, Iceland, Sweden, and Finland also claim this status, although they do not have oceanic borders with the Arctic.

 

There is currently no international treaty that would fully regulate activities in the Arctic – it is regulated by the national legislation of the Arctic states, a number of bilateral agreements, and partially international agreements, which, however, do not affect the legal status of the Arctic.

 

The struggle for it began in the 20th century when the Arctic states began to claim their rights to the Arctic territories up to the North Pole. Thus, by the mid-1920s, the Arctic was actually divided between the USA, USSR, Norway, Canada, and Denmark on a sectoral basis – the point of the North Pole was the border of the states concerned.

 

But after the adoption of the UN Convention on the Law of the Sea in 1982, the situation changed. In accordance with the Convention, the Arctic states have the exclusive right to develop subsoil within their exclusive economic zone and the continental shelf – despite the fact that these areas of the Arctic are not part of their state borders. At the same time, the interested states can no longer claim sovereignty over the offshore zone – it must be international, i.e. the open sea, in which, according to international law, all states of the world have the right to free navigation, freedom of fishing and scientific research.

 

The fight for the Arctic shelf

The Arctic region can become a source of international tension due to competition for access to its resources.

 

Article 76 of the UN Convention on the Law of the Sea automatically establishes the shelf boundaries of 200 nautical miles but gives the state the right to claim a shelf extending beyond this boundary. Denmark, Canada, and Russia claim to expand the limits of their continental shelves.

 

Both poles have pretty good raw resources that countries would love to mine but are limited by the political uncertainty on the territory.

 

Back in the past, when new locations were uncovered for in-demand resource prices and the sentiment of people trading them would immediately change.T he popularity of traded instruments is sure to change if somebody gains exclusive access to the arctic.

 

Based on information gathered from multiple market analysis sources it is likely for the whole world to shift to a specific commodity should it be found in abundance and if it has decent demand for it.

 

All we have to do is compare commodities to currencies and see how similarly they behave on the market. For example, based on this particular XM no deposit bonus review, the USD is the current leader of the demand spike. But why a deposit bonus review? What does it tell us about commodities? Well, a few things.

Since we’re looking at similarities we need to look at the demand and supply trends for currencies themselves. And what would a service provider offer exclusive promotions on if not an in-demand currency pair?

 

Similar to how XM’s bonus encompasses all currency pairs but is best used for a USD pair, the same can be said about commodities once they’re trending. Therefore, no matter what is exclusively available for miners in the Arctic, it’s quite likely that the commodity market will shift dramatically.

 

Russia and its fight for more influence

In 2015, Russia submitted an application to the UN for the second time with a request to expand the boundaries of its continental shelf in the Arctic. For the first time, the UN rejected the application, citing a lack of evidence that the territories that Russia claims are in fact an extension of its continental shelf.

 

On April 3, 2019, the UN subcommittee tentatively recognized (the final decision will be announced in the summer) the geological belonging of part of the Arctic territories to the Russian continental shelf – now the shelf area may increase by 1.2 million km (for comparison, approximately the same area is occupied by France, Germany, and Poland taken together ).

 

Arctic – Cold War 3.0?

But apart from resources and shipping, the Arctic is of great strategic importance. The Arctic was heavily militarized during the Cold War since the US and the Soviet Union were closest to each other there. And now, obviously, military-strategic interests will continue to play an important role.”

 

At the same time, unlike Antarctica, it will not work to demilitarize the Arctic: the presence of the military in the region is a forced necessity. In the future when navigation in the Arctic is simplified, “the military will be needed to ensure the safety of navigation in the Arctic Ocean.”

 

International interest

It is not only the Arctic states that seek to benefit from climate change in the Arctic. China is now showing particular interest in navigating the Arctic. For example, China is building icebreakers, and in 2012 the Snow Dragon icebreaker was the first Chinese ship to sail through the Arctic waters to Europe.

 

The bottom line

The possible opening of the region for shipping and resource extraction has intensified international cooperation on Arctic issues. Now the main discussion platform is the Arctic Council, created in 1996, an intergovernmental organization whose main tasks are to ensure security in the region, solve environmental problems, and protect the rights of indigenous peoples.

 

Along with the main eight players in the region, the Council also includes observer countries, including China, Japan, and the EU member states.

 

Arctic states should themselves involve other countries for cooperation in the region. An excellent example of cooperation is the agreement on fishing because according to international law, all states of the world have the right to freely catch resources on the high seas. Moreover, all countries enjoy navigation rights on the high seas, which means that the Arctic states will have to guarantee the right to innocent passage through their territorial sea, as well as transit passage through the straits.

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