Japan and South Korea have begun commercial shipping of oil products along a seldom used route through the Arctic 's melting ice, lending credibility to a new frontier in global trade that promises to slash shipping costs while averting the geopolitical risks associated with ferrying cargo through the Suez Canal . Energy companies from both nations have chartered ships through the so-called Northern Sea Route carrying oil products and other cargo destined for sale in Europe and Asia , traders and shipbrokers in Singapore said. Some cargoes of iron ore and gas condensate--a form of hydrocarbon--have previously been transported along the route. And last year, Russian gas giant Gazprom sent the first liquefied natural gas shipment to Japanese power producers in a test run. Still, this is the first time oil-derived products have been moved in such large volume through the route, dubbed the Northeast Passage by ancient maritime explorers. The Northern Sea Route cuts through the Arctic Ocean along Russia 's northern coast, providing a short cut between Asia and Europe --and an alternative to the long-established shipping lane through the Suez Canal via the turbulent Middle East --a region fraught with geopolitical risks that can inflate commodity prices. Recent political unrest in countries surrounding the canal, most recently in Egypt , has intensified concern about overreliance on a single, volatile shipping route. Another key lane around the horn of Africa is also available, but adds tens of thousands of dollars in shipping costs and entails much longer voyages. The latest shipments are ferrying oil products eastward along the route for sale in Japan , as well as high-quality diesel westward to Europe from South Korea . Last week, Japan received one cargo of naphtha--a raw material used to produce petrochemicals and plastics--through the Northern Sea Route . Another will arrive later this month, Singapore-based traders said. "A carrier with 80,000 tons of naphtha has arrived at our Mizushima factory," a Tokyo-based spokesman for Asahi Kasei Chemicals Corp. confirmed, adding that the Arctic route had been chosen by the seller, which he didn't name. The second cargo of around 45,000 tons of naphtha is scheduled to arrive at the Japanese port of Chiba by early September aboard the SCF Yenisei, while a tanker called the Propontis carrying around 90,000 tons of high-quality low-sulfur diesel is scheduled to leave South Korea for Europe this week, shiptracking data showed. A typical 90,000-ton cargo from South Korea to Europe would take approximately 35 days and cost $2.1 million at current freight rates via the Suez Canal . The short-cut through the Northern Sea Route could shave as much as 10 days from the journey and the equivalent in fuel and shipping costs, offsetting other additional costs such as insurance and ice-breaker tariffs. The rise of commercial shipping along the Northern Sea Route is particularly significant for Asia 's oil and gas sector. Interregional trading of oil, liquid fuels and natural gas is based on arbitrage--the price difference between regions--and lower shipping costs widen arbitrage to a great extent, thereby boosting trade levels. "The most significant impact will be on the energy sector, especially between the Far East and Europe ," said Gary Li, a senior analyst at IHS Maritime, adding that Asian countries were well placed to exploit the route to access emerging oil and gas markets in Europe , especially Russia . "For China especially, the ability to access energy via the Northeast Passage would allow it to diversify risks to its energy supply away from the Strait of Malacca" in Southeast Asia, Mr. Li said. Asian countries have been steadily pushing to gain influence in the Arctic region, with China , India , Singapore , Japan and South Korea in May obtaining observer status at the Arctic Council, a body focused on boosting the region's trade potential. Earlier this month, Chinese shipper Cosco sent its first container vessel from China to Europe on a test run along the new route, which it said would not only cut shipping costs and carbon emissions, but also bring it closer to western markets and foster economic development in Chinese coastal areas. South Korea plans to sign agreements with Russia to develop an Arctic port, its Ministry of Maritime Affairs and Fisheries said in a recent strategy document. It said its shippers Hyundai Glovis Co. Ltd., Hyundai Merchant Marine Co. Ltd. and Hanjin Shipping Co. Ltd. would conduct test runs on the Arctic route this month with different types of cargoes, including crude oil. The Northern Sea Route has become viable as a commercial shipping lane only in the past few years, as climate change contributes to the thinning of ice in the region for a longer period each year. Countries like Russia stand to benefit from providing permits, port services and tariffs for ice-breakers, an accompanying ship often needed to clear the path for vessels. However, the speed at which this route can develop is limited, as the ice is seaworthy for only around four months a year--although this timeframe may expand if climate change accelerates. It also needs special "Ice Class" ships to withstand extreme cold weather conditions, which are few in number. Rising industrialization of the Arctic has also inflamed environmental groups, including Greenpeace, which are concerned that any oil spill or pollution in the Arctic region may result in irreparable damage to a currently pristine natural environment. "The Arctic route is unlikely to be game-changing in the short-to-medium term due to limitations," Hong Kong-based analyst Bonnie Chan at Macquarie Group said, but added that high fuel costs and rising oil prices would undoubtedly keep shippers interested. Orders for Ice Class ships are pouring in. South Korea 's advanced ship building industry, the world's largest, has received a spate of orders for Ice Class LNG carriers to carry natural gas from remote drilling wells in Norway and Siberia to Asian consumers. As the Arctic fleet expands, the Northern Sea Route looks positioned to become a key conduit to feed Asia 's vast energy appetite. 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