24 June 2019 - 16:09
  • News Code: 290267
Russia-Korea-Oil Triangle to Defeat US

TEHRAN (Shana) -- North Korean leader Kim Jong-un’s visit to Russia was significant on several fronts. Some had laid emphasis on the political aspects of this visit and its impact on future talks between North Korea and the United States. Some others mainly focused on Russia-North Korea ties and looked into their political and economic aspects.

In the meantime, a highly significant issue in such bilateral ties as well as ongoing developments in the Korean Peninsula is Russia’s oil sales to North Korea. Due to restrictions on oil supply to Pyongyang, Russia’s action is faced with many questions.

The present article briefly reviews Russia-North Korea ties, and highlights the significance of Moscow’s oil sales to Pyongyang.

Russia and North Korea have long had ties. During the Cold War, the then Soviet Union was a big supporter of North Korea. During the Korean War (1950-1953), the Union of Soviet Socialist Republics (USSR) along with China came out in support of North Korea, laying the groundwork for ideological division in the Korean Peninsula.

In the 1950s, Moscow trained North Korean nuclear scientists to develop nuclear arsenals. Russia regularly supplied weapons and military hardware to North Korea. In this way, Russia became a key partner for North Korea and a key element of security in the peninsula.

However, the relationship ran into trouble after the collapse of the USSR. Internal unrest in Russia and economic problems undermined Moscow’s support for Pyongyang. Such conditions continued until Vladimir Putin came to power. Since taking office, Putin has sought to revive historical ties between Russia and North Korea.

From 2003 to 2009, Russia was a member of the Group of Six talks with North Korea and undertook huge efforts to preserve Pyongyang’s status. Russia wrote off North Korea’s $10 billion debt and donated 50,000 tonnes of wheat to the reclusive state.

Now Kim’s visit to Russia and his meeting with Putin once again pushed to bold relief the various aspects of relations between the two countries. Kim described Pyongyang-Moscow ties as strategic and traditional.

North Korea is seeking to win Russia’s economic support in a bid to alleviate US pressure. It also needs Moscow’s political support throughout denuclearization talks with the US. Russia also hopes to have a prominent role in the future talks on denuclearization.

Circumventing Oil Sanctions

After North Korea test-fired a long-range missile in 2017, the UN Security Council adopted Resolution 2397 limiting the North Korean import of refined petroleum to 500,000 barrels for each 12-month period, starting on January 1, 2018. Furthermore, the resolution requires UN member states to report any supply of petroleum products to North Korea to the international body.

Despite restrictions, North Korea is skirting around UN sanctions by buying oil via marine routes. This oil transfer is under way while the US has made every effort to stop it. For instance, the US warships and warplanes have forced Pyongyang to take oil from farther areas. The US Pacific Command has also reported that North Korea receives its oil via high seas and other nations. North Korea is also using smaller vessels in order to go unrecognized when transferring oil.

Despite all such restrictions, oil exports to North Korea have never come to a halt.

In July 2018, the Trump administration shot back at North Korea, sending evidence to a UN committee showing that North Korea "breached" UN sanctions by surpassing the annual cap for refined petroleum products.

The report sent to the sanctions committee included a chart of North Korea tanker deliveries of refined petroleum products delivered to Kim's government between Jan. 1 – May 20, 2018 and gave estimates that could have been up to 1.4 million barrels if the vessels were 90 percent laden, illustrating the breach of the 500,000 barrel cap established by UN sanctions.

The US report to the UN also said that North Korea "tankers have called in port in the DPRK (North Korea’s official name) at least 89 times likely to deliver refined petroleum products illicitly procured."

Russia North Oil Supply

There is no precise information available on Russia’s oil exports to North Korea; however, it is clear that the bulk of North Korea’s economy heavily depends on Russia’s oil. North Korea has a single oil refinery which was designed by the Russians, producing products to power factories, cars, trains and buses, warming houses and military barracks, and keeping tanks, jets and personnel armored carriers running. The refinery has no option but to receive oil from Russia to be able to process it.

A recent internal report by an expert panel under the UN Security Council's North Korea sanctions committee said North Korea probably received far more petroleum in 2018 than allowed under United Nations sanctions, with Russia and China appearing to look the other way on illicit transfers of oil at sea.

The UN report cited 148 instances of ship-to-ship oil transfers involving North Korea from January to August. Even if the ships carried just one-third of their capacity, the report said, Pyongyang would have obtained the equivalent of 830,000 barrels of oil from those activities alone. The import cap was imposed in December 2017 in response to the North's testing of intercontinental ballistic missiles.

Russia told the UN sanctions committee that it supplied North Korea with about 7,000 tons of oil in December alone. Its reported supply volume combined with China's makes for over 48,000 tons sent during 2018 as a whole - about 80% of the annual import limit when converted into barrels.

Russia seems to be supplying oil to North Korea via three routes:

The first method is Russia’s direct oil sales to North Korea. Russia supplies oil to North Korea through ship-to-ship transfer. Tracking such oil transfer is very difficult. In 2017, the US blacklisted some Russian oil companies that had sold oil to North Korea.

The second method is the transfer of oil on Russian tankers from Nakhodka and Vladivostok ports via Singaporean intermediaries.

The third method is Russia’s oil sales via Chinese buyers. The Chinese buyers purchase Russia’s oil before delivering it to North Korea via various channels.

Conclusion

The Americans say halting oil and petroleum product exports to North Korea coupled with international pressure would subdue Pyongyang. However, Russia ignores US policies and sanctions imposed to isolate North Korea and freeze its nuclear and missile programs by continuing to sell oil to North Korea.

Russia’s support of North Korea and its continued oil supply to the Communist state shows that the US’s maximum pressure on this country in the energy sector will fail to deeply affect Pyongyang. Therefore, Russia’s oil exports to North Korea represent an equation which would herald the failure of the US policy.

In other words, Russia’s actions will not only neutralize US sanctions policy on North Korea, but also it would affect future talks between Washington and Pyongyang.

by 

Shuaib Bahman

Courtesy of Iran Petroleum

News Code 290267

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