SOCHI, May 20. /TASS/. Falling oil prices have harmed the investment attractiveness of the shipping route lying along Russia’s Arctic coast - often referred to as the Northern Sea Route, Russian Transport Minister Maksim Sokolov told the media on the sidelines of the Russia-ASEAN summit on Friday.

He said that on the one hand climate change and the melting of the ice cap is a factor that makes the route more lucrative than it has been so far. "But on the other, the fluctuations of oil prices the world market has seen for the past two years have greatly harmed the investment attractiveness and economic model of the Arctic shipping route’s operation. The price of crude has slumped and the transportation companies’ costs in the price of oil are not as significant," he said.

The Northern Sea Route running across the seas of the Arctic Ocean (Barents, Kara, Laptev, East Siberia, Chukchi and Bering seas) is Russia’s main traffic artery in the Arctic connecting the European and Far Eastern ports, as well as the mouths of navigable rivers. Its total length is nearly half of that of all other transport routes from Europe to the Far East. It is navigable two to four months a year, but the icebreaker fleet can prolong its operation significantly.

Earlier, the Far East Development Minister Alexander Galushka said that cargo traffic along the Northern Sea Route would be increased to 60 million tonnes in the foreseeable future. Far East Development Deputy Minister Artur Niyazmetov says that seventeen cargo flows totaling 60 million tonnes a year, most of them from Southeast Asia to Nordic Europe, might potentially be re-routed to use the benefits of the NRS, including a ten-percent fall in delivery costs.

Russia’s NRS export traffic, Niyazmetov said, might go up to 30 million tonnes by 2030. Also, tax benefits from raw materials production in the Arctic and their transportation via the NRS may reach an annual 40 rubles. The chief two obstacles in the way of these ambitious plans are the route is not navigable year round and the ice-breaker fleet is too small.