North Korean reported oil imports up year on year: UN data
Though reported shipments are just a fraction of probable illicit inflows
Analysis of reported oil exports to North Korea for the first seven months of 2019 shows increased shipments when compared to last year, though total exported volumes remain well short of UN-mandated restrictions.
UN Resolution 2397 requires countries to report their refined petroleum exports to the DPRK, with China and Russia the only member states currently providing data on the volumes they export to North Korea each month.
Numbers collected throughout the first seven months of the year from both countries indicate that Russia and China have upped their reported exports to North Korea this year when compared to the same period in 2018.
But the majority of the increase comes from Russia who so far in 2019 has more than doubled their exports from last year, increasing shipments from 11,874 tonnes to 23,313 tonnes in the first seven months of this year.
Chinese shipments also ticked upward, though the increase was less significant, increasing from 8,333 tonnes to 10,326 tonnes in 2019.
Comparing the export patterns of the two sets of shipments also shows that either through accident or design Russia and China sometimes seem to alternate periods of high and low exports.
While the overall trend in supplies appears an upward one, in several instances since the beginning of the current sanctions period a dip in Chinese supplies has a corresponding increase in shipments from Russia.
The most recent numbers appear to indicate the opposite trend, with Chinese supplies ticking upward while Russian exports are falling to yearly lows.
But other data sources collecting more detailed trade figures show that China and Russia are sending different refined oil products to the DPRK, indicating that shipments from one country could not serve as a replacement of those from another.
While Russia exports gasoline and diesel to North Korea each month, commonly used fuels have long been absent from China’s own trade data.
Beijing’s shipments usually consist of industrial lubricants, oils and tars, though nonetheless, the alternating pattern of exports indicates some possible coordination helping to keep total exports below mandated quotas.
According to UN Resolution 2397, member states are prohibited from sending over 500,000 barrels of refined petroleum products to North Korea per year, and despite the increases, Chinese and Russian combined shipments remain well below the annual cap.
Even accounting for the 2019 increases, an approximate calculation for the number of barrels exported to North Korea this year at 235,000 barrels, below the halfway point for this year.
But the increased exports are also unlikely to make much of an impact in overall North Korean consumption, especially with Russia as the only official North Korean supplier of fuels like gasoline and diesel.
“This increase in supplies is not particularly significant relative to our estimates of DPRK fuels demand,” David Von Hippel, a senior researcher at the Nautilus Institute for Security and Sustainability, told NK Pro.
“(It’s) maybe just a few percent, implying that additional supplies, most likely over and above what the DPRK is producing in its refineries (mostly Ponghwa) must be coming from other sources.”
A report from the UN Panel of Experts this year noted that China was exporting crude oil to North Korea, with 2018 exports totaling 4 million barrels, a UN-mandated total eight times larger than the restrictions covering refined fuel products.
The Chinese crude oil is exporting via a facility in the border city of Dandong and refined at the Pongwha Chemical Complex, and is likely one of the key pillars keeping supporting the North Korean economy.
An additional North Korean economic support structure comes in the form of the DPRK’s smuggling operations, which by some estimates are more than five times the amount North Korea is receiving via official, UN-recorded channels.
In their most recent mid-term report released last month, the UN Panel of Experts included estimates of the North’s illicit inflows provided by the U.S. and agreed to by 25 signatory countries.
The U.S. report provides three estimates for North Korea’s possible illicit inflows in the first quarter of 2019, based on observation of DPRK tanker movements, ship-to-ship transfers, and how loaded with cargo each tanker may have been.
Washington provided estimates for each tanker deliveries assuming that the DPRK vessels were one-third laden with oil, two-thirds laden, and at maximum capacity, noting that in each case the total volume of shipments would have breached the UN quota by April 23.
While the one-third laden estimate did not technically breach the quota at the time the U.S. conducted their analysis, the limit was likely superseded when factoring in the reported oil shipments from China and Russia at that time.
Using the report, the U.S. requested that the UN Security Council prohibit further refined petroleum exports to North Korea.
“(The U.S. report included) a request for the Committee to make an immediate determination that the petroleum ‘cap has been breached, and to subsequently notify UN Member States of the breach and confirm that all subsequent transfers of refined petroleum to the DPRK must immediately halt,’” the PoE wrote in their mid-term report.
Beijing and Moscow opposed the move – the Panel noted – saying that the there wasn’t enough evidence to consider implementing a full ban for the remainder of 2019.
“At the current stage it is premature for the Committee to make a conclusive decision regarding the U.S. proposal and to cease refined petroleum export to the DPRK,” Russia told the PoE.
Nonetheless, the combination of figures reported the UN and those estimated by Washington highlight how the official numbers only constitute a small part of North Korea’s overall oil inflows.
Extrapolating each of the U.S. estimates out for the remainder of the year results in even the lowest approximation breaching the cap by a significant margin, while crude oil imports seem on a par with historical support provided by Beijing.
Between them, the three sets of inbound petroleum products likely account for North Korea’s apparently stable fuel prices and economy, further highlighting how North Korea combines sanctions evasion tactics and the wording of UN resolutions to its advantage.
Edited by James Fretwell
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