North Korea has stepped up oil imports from Russia with a growing fleet of tankers plying the country’s far eastern ports and terminals, NK News can reveal after a two-month investigation into the DPRK’s vessel movements and oil trading activities.
The growing trade with Russia comes amid continuing reports that China has cut-off crude oil deliveries to North Korea.
However, NK News has also found at least one North Korean crude oil tanker still regularly visiting Chinese terminals, indicating that trade is ongoing despite the absence of crude deliveries in official Chinese trade data.
THE RUSSIAN CONNECTION
Already one of the world’s largest exporters of crude oil, Russian exports climbed as new infrastructure allowed state-owned explorers such as Rosneft to pump Siberian oil towards Asian markets from 2010.
Flush with new supplies, the far eastern oil trade has thrived, with new terminals, storage infrastructure and oil tankers increasingly visible along the country’s rugged coast.
Like its Asian neighbours, North Korea looks to have benefited from Moscow’s drive to diversify away from European markets, with Pyongyang now sourcing a substantial amount of oil from Russia’s Far East.
The DPRK’s growing tanker fleet imported approximately 55% more oil from its eastern neighbor than it did from China, according to an NK News analysis based on open source intelligence, tankers capacities and vessel tracking software.
“[The Russian shipments] are much greater than the reported statistics we’ve seen in previous years,” David Von Hippel, a Senior Associate at the Nautilus Institute for Security and Sustainability, told NK News.
“We had always assumed that some or much Russian oil reached the DPRK unreported, but it was always difficult to estimate how much,” Von Hippel continued.
The growing fuel trade also coincides with a warming of relations between Moscow and Pyongyang, as Russia looks to pivot eastwards and away from Europe in the wake of the Ukraine crisis.
Earlier this year, Russian President Vladimir Putin released North Korea from over $10 billion of Soviet Era debt, with Russian officials hoping this would pave the way for the long-stalled inter-Korean gas pipeline.
But the Russia-DPRK oil connection looks to have taken root well before the recent recovery in bilateral relations.
North Korea now has more tankers assigned to moving Russian oil and products than it does to Chinese supplies, with 11 out of 16 vessels loading fuel in Russia’s Vladivostok, Vostochny and Nahkhodka.
Fresh Siberian crude flows have enabled new refineries to spring up along the coast, with several of these now supplying refined products such as diesel and jet fuel.
According to NK News investigation, the total flow of Russian oil into the DPRK could amount to close to half a million tons (mt) per year. By contrast, Serbia imported 1.5 mt of oil in 2013, while Ireland imported 2.7 mt in the same year.
As Russia’s presence in the region has grown North Korea has expanded its tanker fleet, purchasing three vessels from Hogla Far East – a Russian company with interests in fuel sales – in 2012, according to the Equasis shipping database.
While North Korean tankers are small compared to the hulking vessels now standard in the international oil industry, the distances travelled between Russian terminals and the DPRK’s east coast mean roundtrips can be completed in as little as three days.
Recently, the majority of North Korea’s tankers have been visiting Russia’s Slavayanka terminal, which is operated by Vladivostok based GroupTranzit.
Built in 1994, the Vostokbunker terminal is now the largest in the region, with an on-site Customs office dealing with import-export paperwork. Located just 100km from the DPRK’s border, this facility further trims delivery times for North Korea’s fleet.
GroupTranzit ‘s website describes state-owned Rosneft and Gazpromneft as partners. According to a 2012 press release, the company operating the terminal signed an oil products agreement with Chinese company Huayuan Shitun.
Satellite tracking shows most deliveries making their way to the North Korean city of Chongjin, though occasionally the DPRK’s tankers take the much longer route round to Nampho, where the country’s primary storage facilities are located.
Additional delivery points along North Korea’s eastern coast are also possible, although these can be difficult to locate. Analysis of satellite imagery shows what could be storage terminals at Songbong, Rajin and Hungnam.
“There are dozens of underground POL (Petroleum, Oil and Lubricants) storage areas in the DPRK. Some are easier to spot than others,” Curtis Melvin, a researcher at the US-Korea Institute at Johns Hopkins SAIS told NK News.
Long considered to be North Korea’s primary oil supplier and diplomatic patron, China shipped roughly 500,000 tons of crude oil a year to the DRPK, according to historical trade statistics.
However, when these same statistics stopped reporting crude deliveries in January, the news sparked a flurry of speculation about a possible castigatory cut-off in supplies.
“With China still not reporting deliveries of crude, there’s a great amount of interest in the situation over a potential cut off,” a London-based diplomatic source told NK News. “If they really stopped deliveries, how long can the DPRK survive without Chinese oil?”
However, despite the rumours, NK News has tracked one of the DPRK’s crude oil tankers moving repeatedly between China’s massive Dalian oil terminal and its home port of Nampho. Called the Nam San 8, the vessel is a purpose built crude oil tanker capable of potentially moving up to 12,000 tons of oil a month between the two ports.
Although its coverage is spotty, the Nam San 8 has made at least two trips between Nampho and Dalian from July 5 to July 23 – the tanker also disappeared off tracking systems for 11 during that period. However, the tanker can be seen docked at the Dalian’s oil terminal on July 7 and July 23.
While the tanker’s exact heading in North Korea is difficult to confirm because of patchy coverage around Nampho, its transit towards the West Sea Barrage makes the DPRK’s largest port the most likely destination.
Ship inspection records also reveal that the Nam San 8 has been making trips to Dalian since November last year, while the ship has not been inspected outside of Chinese waters since 2004 – a strong indication that the tanker has not frequently visited any Russian ports since then.
Listed as a crude tanker by both Marine Traffic and the Equasis shipping database, there is little chance the Nam San 8 is moving anything other than crude oil between the two countries. Crude oil tankers are also difficult to repurpose.
“I don’t think you can use them because of sizing, technical limitations, and regulations,” Hans Ex who works for an energy-focused maritime transport company, told NK News.
The tanker’s continued visits to Chinese ports on the other hand imply that crude flows from China to the DPRK have not stopped, contrary to the claims made by customs data. At most, they have been curtailed from the usual average of 50,000 tons per month.
The Nam San 8’s choice of home port is also peculiar. Since crude oil must be refined before more general use, shipments must be processed through a refinery.
However, refinery infrastructure is not immediately visible on satellite imagery of Nampho. Nor do any North Korean tankers appear to sail to Sinuiju – in the DPRK’s north-west – where the refinery which typically handles Chinese pipeline deliveries is located.
Despite the apparent lack of visible evidence of a Nampho facility, there have been rumours regarding the existence of a small local plant dedicated to making military fuels.
“We had heard of a third small, relatively primitive refinery that was supposed to be near Nampho, and was conjectured to possibly provide fuels for the military,” David Von Hippel told NK News.
“Using the crudest of assumptions, we estimated the capacity of that refinery at somewhat over 100,000 tons of crude oil per year. However, the DPRK could have another, hidden refinery somewhere.”
The remainder of North Korea’s oil tankers also run between Dalian and Nampho – a 600km roundtrip that brings in as much as 17,000 tons of oil products per month.
This estimated figure, based on tanker and tracking data, closely matches the average reported by Chinese customs of 17,600 tonnes.
Another vessel has recently travelled to a terminal as far as Shanghai. Given the vessel’s small size, this 1900km journey would be considered “exotic” by tanker charterers, indicating that the DPRK is prepared to travel further afield.
Excluding the Nam San 8, the remaining DPRK fleet operating between China and North Korea could only move around 200,000 tons of oil products per year, leaving a deficit of around 500,000 tons.
“The tanker traffic estimates for Chinese oil products is close to the average transport in 2011, and reasonably consistent with customs statistics in other recent years,” said Von Hippel.
During its investigation, NK News saw no foreign oil tankers delivering to North Korean ports, indicating that the remaining 500,000 tons is likely shipped via the pipeline connecting the Chinese border city of Dandong to Sinuiju.
While it is difficult to ascertain if these pipeline deliveries have stopped, a May report by Daily NK claimed that the facility was “continuously supplying oil (to North Korea)”.
If operational, the pipeline could still make China North Korea’s largest supplier, although the margin would be considerably smaller than previously thought. Contrary to recent reports, when combined with the additional supplies from the Russian far east, North Korea could be enjoying a period of relatively abundant fuel supply.
Featured Image: John Loo, Flickr Creative Commons
North Korea has stepped up oil imports from Russia with a growing fleet of tankers plying the country’s far eastern ports and terminals, NK News can reveal after a two-month investigation into the DPRK's vessel movements and oil trading activities.The growing trade with Russia comes amid continuing reports that China has cut-off crude oil deliveries to North Korea.However, NK News has
James Byrne is a Research Fellow at RUSI’s Proliferation and Nuclear Policy programme. His research interests include North Korea’s illicit shipping and procurement networks, open-source intelligence and analysis. He previously worked for the South Korean government.